Opinion
NOT TO BE PUBLISHED
Monterey County Super. Ct. No. M85037
McAdams, J.
This appeal is the latest proceeding in a series of disputes arising out of a trust.
The plaintiff and appellant is Constance Anne Dudley. Dudley is one of the settlors of an irrevocable trust, the Lincoln Trust, as well as a former co-trustee, and a trust beneficiary. The defendants and respondents are Dudley’s ex-husband Paul Laub, and Dudley’s former attorney Sidney Morris and his law firm, Heisinger, Buck & Morris.
In this case, Dudley asserts claims for legal malpractice, breach of oral contract, breach of the covenant of good faith and fair dealing, and fraud, based on allegations that respondents misled her into resigning as co-trustee of the trust and that she was damaged as a result. The trial court sustained respondents’ demurrers to Dudley’s fifth amended complaint, without leave to amend. The court concluded that Dudley’s trustee position was rendered vacant as a matter of law when she filed a bankruptcy petition in 2003, and since appellant’s later resignation at respondents’ behest was not the legal cause of any harm, she could not maintain her claims against them.
As a matter of first impression, we agree with the trial court’s interpretation and application of the governing provision, Probate Code section 15643.
Further unspecified statutory references are to the Probate Code.
BACKGROUND
Some of the background information in this opinion is drawn from our opinions in two prior appeals.
Prior matters concerning the Lincoln Trust that have reached this court include: H031723, an appeal from an April 2007 probate order; H032660, a petition for writ of habeas corpus, which followed contempt proceedings for violation of the April 2007 order; H032472, an appeal from an October 2007 probate order; H032769, a petition for a writ of mandate.
The Trust
The seeds of this dispute grew out of an irrevocable trust, called the Lincoln Trust, which was created following dissolution of the marriage of Dudley and Laub. In November 1996, Dudley and Laub entered into a written marital settlement agreement. The marital settlement agreement was merged into the dissolution judgment. In February 1997, the Lincoln Trust was created.
The trust property consists of a commercial building in Carmel, located on the corner of Ocean and Lincoln, which generates income from tenants. The trust states that it was established for the benefit of the two children of the marriage. Dudley is the “sole income beneficiary for her lifetime, with [Laub] succeeding to such income interest for his lifetime, if he survives her.” Dudley claims a disputed life estate interest in the trust property.
The Lincoln Trust was established with three trustees, but it includes provisions for an increase to five trustees upon Dudley’s death. Section four of the Lincoln Trust, entitled “Trustee,” includes a provision for successor trustees (section 4.1), and a provision setting forth the number and combination of trustees required to act (section 4.3).
Section 4.3 provides in part: “Prior to the death of Constance [Dudley], all decisions and actions by the trustees shall be made and taken by the affirmative vote of Constance and at least one (1) other trustee.”
Dudley’s Bankruptcy
In April 2003, Dudley filed a voluntary Chapter 11 bankruptcy petition.
In January 2005, with the bankruptcy proceedings still pending, Dudley resigned as trustee of the Lincoln Trust. Laub was appointed as successor trustee. Those events are at the heart of this litigation.
In June 2005, the Chapter 11 bankruptcy trustee filed a motion for summary judgment, asserting a right to Dudley’s income stream from the trust. Dudley filed a cross-motion for summary judgment, on the ground that the income was exempt or excluded from the bankruptcy estate. Dudley submitted a supporting declaration that she “did not personally have a beneficial interest in the Trust corpus or the income generated by it.” Being non-parties to the bankruptcy, the trustees lacked “standing with respect to the summary judgment motions” but they nevertheless “asserted [their] rights” by requesting relief from the automatic bankruptcy stay.
In July 2005, at the hearing on the motions, Judge Weissbrodt directed the parties to engage in mediation. The mediation, held in September 2005, included Dudley, the Chapter 11 bankruptcy trustee, and the Lincoln Trust trustees. A settlement was reached. In December 2005, the parties executed a written agreement and mutual release, reflecting their settlement. The Chapter 11 trustee filed a motion for compromise, seeking bankruptcy court approval for the settlement.
At a hearing held in January 2006, Judge Weissbrodt orally approved the parties’ compromise, over the objection of a creditor. A written order reflecting the judge’s approval was filed the following month. The creditor appealed.
In September 2006, Judge Ware rejected the creditor’s appeal and affirmed Judge Weissbrodt’s approval of the settlement agreement. At the same time, Judge Ware also lifted the stay order that had been in place since April 2006, thereby granting the trustees’ earlier request for that relief. At that point, the trustees were able to proceed in state court. They did so promptly.
Prior State Court Proceedings
On September 12, 2006, the Lincoln Trust trustees brought two petitions for instructions in superior court, under section 17200. One (the “construction petition”) sought interpretation of the trust, together with an order for the return of trust property. The other (the “expenditure petition”) requested approval of the bankruptcy settlement, plus an order permitting the trustees to borrow funds, secured by the trust property, to pay trust expenses. A third petition (the “individual petition”) was brought by Laub, acting in his individual capacity “as settlor and contingent income beneficiary.” In that petition, Laub sought reimbursement “for $199,000 in expenses... incurred for the benefit of his sons,” who were to have been supported out of the trust’s income.
In April 2007, following substantial briefing and a hearing, the court filed a formal order granting the two petitions brought by the Lincoln Trust trustees. The court denied the individual petition brought by Laub. In deciding the construction petition, the court concluded that “by resigning as co-trustee of the Lincoln Trust,” Dudley “relinquished” her power under section 4.3 to participate in decision making and to control the trust.
In an opinion filed in November 2008, this court affirmed the April 2007 order.
The Current Action
In June 2007, Dudley initiated this litigation in Monterey County Superior Court for breach of contract, breach of fiduciary duty, and legal malpractice. The initial complaint named only Morris as an individual defendant. In July 2007, Dudley filed a first amended complaint, still against Morris alone, adding causes of action for breach of the covenant of fair dealing and for fraud and deceit. In mid-August 2007, Dudley filed a pleading entitled third amended complaint. It named both Morris and his law firm, and it added a claim for “dual representation of adverse interests.” Later in August 2007, Dudley filed a fourth amended complaint, which named Laub as an additional defendant.
The record contains no second amended complaint. Two pleadings by Dudley followed her “third” amended complaint, identified below as the “fourth” amended complaint and the “fifth” amended complaint. To avoid confusion, we retain those denominations here.
Morris and Laub each demurred separately to Dudley’s fourth amended complaint. A hearing on the demurrers was scheduled for December 14, 2007.
On December 13, 2007, Dudley filed a fifth amended complaint, without first obtaining leave of court. The following day, at the scheduled hearing on the demurrers, neither Dudley nor her counsel appeared; the court continued the matter for a week. At the continued hearing, the court agreed to allow Dudley to file one last amended complaint, to which respondents could demur. Dudley was to file her amended complaint by January 4, 2008.
Dudley did not file a new pleading, instead electing to stand on her fifth amended complaint.
Factual Allegations
As alleged in the fifth amended complaint, Dudley and Laub met in January 2005 “to discuss concerns that he had concerning the Trust while the Bankruptcy proceedings were pending.” Laub advised Dudley that she “should temporarily resign as Trustee to insulate and protect the Trust” and that she “should appoint him (Laub) as her replacement Trustee” instead of other potential candidates. Laub suggested that Dudley consult with Morris for independent legal advice. After doing so, Dudley entered into an oral agreement with Laub, which provided that she “would temporarily resign as Trustee and Laub would be appointed in her place. They further agreed that Laub would act as Trustee only up to and until [Dudley] asked Laub to resign, at which point Laub would immediately resign and assent to the re-appointment of [Dudley] as Trustee....”
As against Morris and his law firm, Dudley asserted that she retained them in January 2005 and that they “agreed to represent and advise [her] regarding the Lincoln Trust” and the trust property and also “regarding what course of action she should take in relation to Laub’s proposed agreement... and her potential liabilities under the Bankruptcy action.” “Morris advised her to temporarily resign as Trustee and allow Laub to be appointed in her place.” He also prepared her resignation, which she signed. But Morris never informed Dudley “that her status as an individual in an unresolved Bankruptcy proceeding might possibly cause her position as a Trustee to be considered, legally, to be vacant, under Probate Code Section 15643.” Morris and his firm also failed to “disclose that they had previously represented Laub and/or that they were continuing to represent Laub.”
In September 2005, Laub took “action hostile to [Dudley’s] interests in the Trust,” in breach of his oral agreement with her. Laub also refused her request that he resign as trustee. Dudley then sought legal assistance from Morris to protect her from Laub’s actions. At that point, Morris disclosed his representation of Laub and terminated his attorney-client relationship with Dudley.
A year later, in September 2006, “Laub and his co-Trustees submitted two concurrent petitions, and Laub as an individual submitted one petition, also concurrently, to the Monterey County Superior Court, Probate Division. Laub’s petition was the hostile action referred to” earlier in the complaint.
Legal Claims
(1) The first cause of action of Dudley’s fifth amended complaint is for breach of oral contract, asserted against all three named defendants: Laub, Morris, and Morris’s law firm.
As against Morris and his law firm, Dudley claims that they agreed to act as her legal counsel but that they breached that oral retention agreement by failing to advise Dudley about the effect of her bankruptcy on her status as trustee, by failing to counsel her “how to effectively man[a]ge the adverse situation” to avoid any “possible legal objection to her serving as Trustee,” by advising her to resign, and by preparing a resignation letter for her. “As a proximate result” of this breach, Dudley alleges, she “suffered actual and potential damages. Said damages include, but are not limited to not being competently represented in matters regarding the Trust; and also now being placed in a position where she is endangered by the assertion of a Section 15643 defense by Laub against her attempts to recover damages from Laub for his breach of Laub’s Agreement with her.”
As against Laub, Dudley asserts that he breached his oral contract with her by failing to resign as trustee when requested to do so and by filing the individual petition seeking reimbursement from the trust in September 2006. As damages arising from Laub’s breach of contract, Dudley claims loss of “her life estate interest” in the trust property, loss of “her income beneficiary interest” in the trust property, and the expenditure of legal fees.
(2) Dudley’s second cause of action is for legal malpractice against Morris and his law firm. Dudley complains that they “failed to exercise reasonable care and skill” in the representation, based on the same factual allegations asserted in the first cause of action. As for damages, Dudley reasserts her claims from the first cause of action.
(3) As a third cause of action, Dudley claims breach of the implied covenant of good faith and fair dealing against Laub. Dudley asserts that Laub “had a duty to act fairly and in good faith” with her concerning their oral agreement, but he breached that duty by failing to resign as trustee on request, by filing the individual petition, by failing to inform Dudley about his attorney-client relationship with Morris, and by making representations that Morris was an independent attorney who would protect her interests. As damages, Dudley claims attorney’s fees and costs and emotional and mental distress.
(4) Dudley’s fourth and final cause of action, for fraud and deceit, is asserted against all three named defendants.
According to Dudley, Laub made these misrepresentations: Morris would be independent; Laub would be a strong advocate for Dudley’s interests in the trust; upon request, Laub would resign as trustee and assent to Dudley’s reappointment. Morris made these misrepresentations: he would use his best efforts on Dudley’s behalf and his advice would serve her interests; he would keep her reasonably informed about developments concerning the trust; it would be in her best interests to resign as trustee. On information and belief, Dudley asserts that respondents knew the falsity of these representations and made them “with the intent to deceive and defraud” her. Dudley was ignorant of the falsity of respondents’ representations. In justifiable reliance, Dudley “was induced to, and did, resign as Trustee of the Trust, assented to the appointment of Laub as temporary Trustee, and retained and paid attorneys fees” to Morris and his firm. “As a proximate result of the fraudulent conduct” of respondents, Dudley “incurred significant costs and legal fees” and “is also faced with the possibility of losing her life estate interest” in the trust property.
Respondents’ Demurrers
In February 2008, Laub and Morris both demurred to Dudley’s fifth amended complaint, each citing several grounds.
Among other things, Laub argued that Dudley could not maintain an action against him, because her “filing for bankruptcy in 2003 precludes her serving as trustee” since “§15643 specifically provides that by operation of law, there is a vacancy in the office of trustee” in such circumstances.
Morris made the same causation argument, contending that Dudley had “already forfeited her trusteeship by filing for bankruptcy” by the time that she had consulted him. As a result, any failure on his part to advise her about section 15643 “did not cause Dudley to be stripped of her trustee position. Nor did the attorney’s advice or lack of advice cause Dudley to lose her veto power. These events were set in motion when Dudley filed the bankruptcy proceeding in 2003. Thus Morris did nothing to cause [Dudley’s] damages.” Morris also characterized Dudley’s allegations as speculative. As he put it, Dudley “speculates that Morris should have thought of a way around the operation of the Probate Code, but this claim is both conjectural and illegal on its face.”
Dudley’s Opposition to the Demurrers
Dudley opposed the demurrers.
Addressing Laub’s statutory argument, Dudley argued: “It is incredible hypocrisy for Laub to assert that [her] bankruptcy filing in 2003 was a bar to her once again acting as trustee in 2005 when she requested him to resign. And Laub is equitably estopped from asserting this.” In support of estoppel, Dudley cited Laub’s “prior acquiescence and approval of [her] continued role as trustee.”
In response to both Laub and Morris, Dudley also argued that section 15643 did not permanently bar her from serving nor did it prevent the other trustees from reappointing her, which they “implicitly” did by “assenting to [her] continued service.” As additional support for her argument that the trustees could permit her continued service, Dudley cited section 15642, which provides for discretionary removal of a trustee on various grounds, including if “insolvent or otherwise unfit to administer the trust.” (§ 15642, subd. (b)(2).) “Therefore,” Dudley argued, “under California law an insolvent trustee – someone in a situation similar to one who files for bankruptcy – may be removed, or may keep on serving.”
In response to Morris’s characterization of her contentions as speculative, Dudley argued that “the simple implication” of her allegations is that if Morris and his firm “had merely indicated to her that she should emerge from bankruptcy in order to alleviate or avoid any Probate Code concerns, she could have done so, rather than appealing the probate decision and perhaps putting herself at risk.”
Respondents’ Replies
Laub and Morris each replied to Dudley’s opposition, reaffirming their prior arguments that Dudley had failed to establish causation and thus had failed to state a cause of action against them in her fifth amended complaint.
Laub asserted: “It is apparent that there is not and cannot be any connection between the two alleged breaches of this supposed oral agreement by Laub as an individual and the damages that are claimed. Laub’s refusal to resign could have no impact on Dudley’s alleged life estate, one way or the other. Laub’s filing of an individual petition for reimbursement of expenses does not relate in any way to the court’s ruling concerning construction of the Lincoln Trust.”
Morris argued: “[S]ection 15643 unambiguously states that the office of trustee is vacant if the trustee files a petition for bankruptcy.” Applying the statute to this case, “the office of trustee was vacant starting in 2003 until 2005.” Morris continued: “Dudley claims she could simply ‘emerge’ from bankruptcy and resume her duties without court order or action by the other trustees. This astonishing argument ignores the provisions of... section 15660 which dictates how a vacancy at the position of trustee is filled.” Furthermore, Dudley “cites no legal authority for the proposition that [she] could ‘emerge from bankruptcy’ at will. In fact, Dudley’s bankruptcy was complex and contentious and she was not in control of the process when she first saw Morris in January 2005.” Moreover, Morris reiterated, his claimed failure to advise Dudley about section 15643 “did not cause any of the alleged adverse actions by the trustees, and did not cause Dudley to incur fees or costs to fight the trustees, including Laub.” Morris also addressed Dudley’s claim that the trustees could and likely would have reinstated her, saying: “In addition to being pure speculation, this argument ignores the fiduciary obligations of the trustees.... The trustees are required by law to discharge their obligations notwithstanding the preferences or ‘recommendations’ of Dudley, Laub and/or the children [who were beneficiaries].”
Both Laub and Morris asked the court to sustain their demurrers without leave to amend.
Hearing and Decision
In March 2008, the trial court conducted a hearing on the demurrers. Respondents appeared through counsel. Dudley appeared, personally and represented by counsel.
The court indicated that it had reviewed the extensive written submissions. The court then entertained lengthy oral argument from all counsel. Among other things, Dudley’s counsel argued: “There is absolutely no case law stating that the vacancy automatically happens and that she cannot serve as trustee, if agreed to by the other beneficiaries of the trust.”
After oral argument, the court rendered its ruling. After remarking that “some fascinating issues” were raised by the fifth amended complaint, the court then summarized Dudley’s legal claims. The court continued: “It does appear, however, that the trustee’s filing of a bankruptcy, plaintiff’s filing of a bankruptcy petition, triggered an automatic vacancy in the trusteeship pursuant to... Section 15643(f) and that occurred long before the plaintiff sought Mr. Morris and his law firm. [¶] The vacancy then occurred automatically upon her filing of the bankruptcy petition. The apparent discretionary ability of the court to remove her as trustee then never applied. Once there was a vacancy,... Section 15660 provided the manner [in which] it was to be filled.” In this case, the court concluded, the vacancy had to be filled by “unanimous approval of the remaining trustees.” By implication, the court rejected Dudley’s arguments that the trustees could implicitly assent to her continued service as trustee after her 2003 bankruptcy petition. The court concluded: “Therefore, any alleged harm to the plaintiff was done when she filed the bankruptcy petition in 2003.” Speaking over attempts by Dudley’s counsel to interrupt her, the judge continued: “As a matter of law – she vacated the office of trustee and the defendant’s alleged conduct or omissions could not have harmed her.” The court also stated that Dudley “is judicially estopped from seeking the damages alleged. Because in her bankruptcy proceedings she stated under penalty of perjury that she had no personal interest in the Lincoln Trust.” The judge then ruled: “For these reasons the court finds that plaintiff has failed to state a cause of action in the fifth amended complaint against any of the named defendants.” The judge sustained the demurrers without leave to amend.
Dudley’s counsel pressed to put some additional comments on the record. Among other things, he stated “that the court here, specifically the family court here, has decided to retain jurisdiction over this matter because this is, in essence, taking away from my client a marital settlement agreement that was given to her by this court.” Counsel also asked the court to reconsider its decision to deny leave to amend, equating refusal to allow amendment with the denial of due process.
The court rejected counsel’s argument, saying “I believe we have given her full due process.” The court observed: “There were four previous complaints.” And it further observed: “There are legal reasons pursuant to the Probate Code that affect the ability of your client to state a cause of action against these defendants.” The court concluded by stating: “I have made my ruling and I do believe there was ample opportunity given to the plaintiff to amend the complaint to state the best possible complaint that she could against these defendants. [¶] And given that we are at the fifth amended complaint and there have been further attempts, the court at this time sustains the demurrer without leave to amend.”
Several days after the hearing, the court signed a formal order to that effect in favor of Morris and his law firm.
Motion for Reconsideration
Acting as her own attorney, Dudley moved for reconsideration. Laub and Morris both opposed the motion. Following a hearing in April 2008, the court denied Dudley’s reconsideration motion.
Appeal
This appeal by Dudley ensued. Dudley is representing herself on appeal.
DISCUSSION
At the outset, we address several threshold procedural issues that affect the scope of our review. Turning next to the substantive issues before us, we first describe and then apply the general principles of law that govern here.
I. Threshold Procedural Issues
This appeal presents two threshold procedural questions: first, whether Dudley has forfeited her appellate claims as a result of rule violations; and next, whether the challenged orders are appealable.
A. Forfeiture of Appellate Claims
“To demonstrate error, [the] appellant must present meaningful legal analysis supported by citations to authority and citations to facts in the record that support the claim of error.” (In re S.C. (2006) 138 Cal.App.4th 396, 408; Cal. Rules of Court, rule 8.204 (a)(1)(B).) That requirement applies with equal force to parties representing themselves. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984; City of Los Angeles v. Glair (2007) 153 Cal.App.4th 813, 819.)
A party challenging a judgment or order who fails to comply with the rules on appeal risks forfeiture of the claimed error. (See, e.g., Berger v. California Ins. Guarantee Assn. (2005) 128 Cal.App.4th 989, 1007 [issue forfeited for appellants’ failure “to make a coherent argument or cite any authority to support their contention” and for their failure to “specify any facts they maintain would state a cause of action”].) “The reviewing court is not required to make an independent, unassisted study of the record in search of error or grounds to support the judgment. It is entitled to the assistance of counsel. Accordingly, every brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.” (9 Witkin, Cal. Procedure (5th ed., 2008) Appeal, § 701, p. 769; accord, People v. Stanley (1995) 10 Cal.4th 764, 793.)
Nevertheless, even where the appellant has “violated fundamental principles of appellate practice” causing “considerable inconvenience,” the court may elect to consider the appeal on its merits. (Goehring v. Chapman University (2004) 121 Cal.App.4th 353, 363, fn. 7; see also, e.g., Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 237.) It is particularly appropriate to do so where the appeal raises an important issue. (Nguyen v. Proton Technology Corp. (1999) 69 Cal.App.4th 140, 145, fn. 7.)
In this case, as Laub observes, Dudley’s opening brief reflects fundamental and pervasive violations of the rules on appeal. Characterizing her brief as “nonsensical,” Laub points out that “Dudley offers no real argument as to why the court erred in sustaining... defendants’ demurrers without leave to amend.” Laub further observes that Dudley fails to provide both legal and record citations. He asks us to treat Dudley’s claims of error as forfeited.
We acknowledge Dudley’s disregard of the rules of appellate procedure. Nevertheless, we elect to consider the substance of her current appeal both to address asserted due process violations and because a statutory question is presented. (See Nguyen v. Proton Technology Corp., supra, 69 Cal.App.4th at p. 145, fn. 7.)
B. Appealability
The next threshold question concerns appealability of the challenged rulings.
1. Ruling on Demurrers
In her notice of appeal, Dudley states that she is appealing from a judgment of dismissal after an order sustaining a demurrer. Though it contains no document entitled “judgment,” the record provided in this court does include these written dismissal orders: (1) the formal order filed March 18, 2008, sustaining the demurrers brought by Morris and his law firm and dismissing the complaint as to them; and, as indicated in an augmentation to the record, (2) a formal order filed July 8, 2008 (after the notice of appeal), sustaining the demurrers brought by Laub and dismissing the complaint as to him.
“An order sustaining a demurrer without leave to amend is not appealable [citation]; the appeal must be taken from the ensuing order of dismissal, which constitutes a judgment.” (Weiss v. Marcus (1975) 51 Cal.App.3d 590, 594, fn. 1; see Code Civ. Proc., § 581d.) The written dismissal orders entered here constitute appealable judgments. Moreover, although the formal order dismissing Laub was entered after this appeal was taken, “we will liberally construe” Dudley’s notice of appeal as including that later dismissal order. (Los Altos Golf and Country Club v. County of Santa Clara (2008) 165 Cal.App.4th 198, 202.)
2. Ruling on Motion for Reconsideration
In addition to challenging the March 2008 ruling on respondents’ demurrers, Dudley’s notice of appeal also states that she is appealing from the April 2008 denial of her reconsideration motion.
There is a split of authority concerning the appealability of orders denying reconsideration. (Annette F. v. Sharon S. (2005) 130 Cal.App.4th 1448, 1458; In re Marriage of Burgard (1999) 72 Cal.App.4th 74, 81.) “Most of the recent cases consider a motion for reconsideration never appealable.” (In re Marriage of Burgard, at p. 81; accord, Annette F. v. Sharon S., at p. 1458.) Refusing to treat such orders as appealable serves “to eliminate the possibilities that (1) a nonappealable order or judgment would be made appealable, (2) a party would have two appeals from the same decision, and (3) a party would obtain an unwarranted extension of time to appeal.” (Rojes v. Riverside General Hospital (1988) 203 Cal.App.3d 1151, 1161.)
This case does not require us to express a position on the question of appealability of orders denying reconsideration. Here, because Dudley offers no argument whatsoever that the trial court erred in denying her motion for reconsideration, we simply treat that claim as abandoned. (Rossiter v. Benoit (1979) 88 Cal.App.3d 706, 710-711 [issue completely unsupported by discussion, citations, or argument deemed abandoned].)
II. Substantive Issues
Before turning to the specific contentions presented here, we briefly summarize the legal principles concerning demurrers that frame our analysis.
A. General Legal Principles
“A general demurrer searches the complaint for all defects going to the existence of a cause of action and places at issue the legal merits of the action on assumed facts.” (Carman v. Alvord (1982) 31 Cal.3d 318, 324.) On appeal from the sustaining of a demurrer without leave to amend, the reviewing court is faced with two questions.
The first question for the reviewing court concerns the complaint’s sufficiency. In addressing this first question, “we independently review the complaint to determine whether the facts alleged state a cause of action under any possible legal theory.” (Berger v. California Ins. Guarantee Assn., supra, 128 Cal.App.4th at p. 998.) “In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we 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; accord, Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) We will affirm “if proper on any grounds stated in the demurrer, whether or not the court acted on that ground.” (Carman v. Alvord, supra, 31 Cal.3d at p. 324.)
The second question on appeal concerns exercise of the trial court’s discretion to permit an amendment of the complaint. “If the court sustained the demurrer without leave to amend, as here, we must decide whether there is a reasonable possibility the plaintiff could cure the defect with an amendment.” (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) “As a general rule, if there is a reasonable possibility the defect in the complaint could be cured by amendment, it is an abuse of discretion to sustain a demurrer without leave to amend.” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “Nevertheless, where the nature of the plaintiff’s claim is clear, and under substantive law no liability exists, a court should deny leave to amend because no amendment could change the result.” (Ibid.) Where the issue of substantive law presents a question of statutory interpretation, our review is de novo. (Kramer v. Intuit Inc. (2004) 121 Cal.App.4th 574, 578.)
B. Analysis
As just explained, our analysis of the demurrer ruling proceeds in two steps. First, we independently review the sufficiency of Dudley’s fifth amended complaint, ultimately concluding that it fails to state any cause of action against respondents. Next, we consider whether leave to amend should have been granted; we find that the defects in the pleading cannot be rectified under the governing substantive law. Thus, after undertaking both steps in the analysis, we conclude that the trial court acted properly in sustaining respondents’ demurrers without leave to amend. In the final section of our analysis, we briefly consider and reject Dudley’s claims that the trial court exhibited bias toward her.
1. The Complaint Fails to State a Cause of Action.
The trial court concluded that each cause of action of Dudley’s complaint falters on the element of causation. In the trial court’s words, Dudley’s 2003 bankruptcy petition “triggered an automatic vacancy in the trusteeship pursuant to... Section 15643(f) and that occurred long before” the events alleged in Dudley’s amended complaint. Thus, the court reasoned, the “alleged conduct or omissions could not have harmed her.”
We agree with both aspects of the trial court’s assessment. As a matter of statutory construction, the relevant provision recognizes an automatic vacancy upon the trustee’s bankruptcy. (§ 15643, subd. (f).) Applying that provision to the facts of this case compels this conclusion: When Dudley submitted her resignation in 2005, she was no longer a trustee, her status in that position having terminated with her 2003 bankruptcy petition. Dudley’s post-bankruptcy resignation therefore had no effect on her trustee position, which was then vacant by operation of law. Under these circumstances, no causal connection exists between respondents’ role in Dudley’s resignation and the harm that she claims from loss of her position as trustee. We explain each of these conclusions below.
a. The Meaning of the Governing Statute
The circumstances that trigger a trustee vacancy are described in section 15643. As pertinent here, the statute provides: “There is a vacancy in the office of trustee in... the following circumstances: [¶]... [¶] The trustee files a petition for adjudication of bankruptcy or for approval of an arrangement, composition, or other extension under the federal Bankruptcy Code, or a petition filed against the trustee for any of these purposes is approved.” (§ 15643, subd. (f).)
The full text of the statute reads as follows:
Our task here is to discern the meaning of this provision. “In statutory construction cases, our fundamental task is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute.” (Estate of Griswold (2001) 25 Cal.4th 904, 910.) “ ‘We begin by examining the statutory language, giving the words their usual and ordinary meaning.’ ” (Id. at p. 911.) “If the terms of the statute are unambiguous, we presume the lawmakers meant what they said, and the plain meaning of the language governs.” (Ibid.)
In this case, we examine the first phrase of the statute, which states: “There is a vacancy in the office of trustee” in the described circumstances. (§ 15643, italics added.) We focus particularly on the phrase’s use of the word “is,” ascribing that word its common meaning. (Cf. Estate of Griswold, supra, 25 Cal.4th at p. 914 [discussing the meaning of the word “acknowledge”].) In common parlance, “is” means “that which is factual, empirical, actually the case....” (Webster’s 3d New Internat. Dict. (1993) p. 1197, italics added.) With that definition of “is” in mind, we discern a legislative understanding that the vacancy will occur automatically: when the triggering event happens, it is “actually the case” that a vacancy exists. (Ibid.) Furthermore, the statute contains no qualifying language suggesting the need to confirm or otherwise establish the vacancy. The vacancy thus occurs automatically, by operation of law.
The parties have not cited any case law interpreting this provision, nor has our independent research disclosed any. But our construction of section 15643 is reflected in secondary authority, which states that “the trustee’s filing of a bankruptcy petition triggers an automatic vacancy in the trusteeship.” (Campisi, Cal. Trust and Probate Litigation (Cont.Ed.Bar, March 2009 Update) Fiduciary Resignation or Removal, § 14.26, p. 468, citing § 15643, subd. (f).) Furthermore, our view of the statute’s operation is consistent with long-standing case law discussing other circumstances that result in a trustee vacancy, such as a trustee’s death. (See § 15643, subd. (d); Meyer v. Superior Court (1927) 200 Cal. 776, 789 [decedent’s powers as trustee had “fully ceased and come to an end by her demise”].)
Applying the statute as interpreted to the facts as pleaded, we reach the same conclusion as the trial court: Dudley’s 2003 bankruptcy petition triggered an automatic vacancy in the position of co-trustee of the Lincoln Trust that she had occupied up to that point. And as we now explain, that conclusion is fatal to each cause of action of Dudley’s fifth amended complaint, since it will be impossible to establish causation.
b. Application to Dudley’s Claim for Legal Malpractice
Dudley cannot state a cause of action for legal malpractice against Morris.
The elements of a legal malpractice action are: “(1) the duty of an attorney to use such skill, prudence, as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney’s negligence.” (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199.) More specifically, concerning the third element as it arises in a transactional legal malpractice claim, the plaintiff must “establish causation by showing either (1) but for the negligence, the harm would not have occurred, or (2) the negligence was a concurrent independent cause of the harm.” (Viner v. Sweet (2003) 30 Cal.4th 1232, 1241.) “It must be shown that the loss suffered was in fact caused by the alleged attorney malpractice.” (Bauman, Damages for Legal Malpractice: An Appraisal of the Crumbling Dike and Threatening Flood (1988) 61 Temp. L.Rev. 1127, 1154, quoted in Viner v. Sweet, at p. 1241.) The purpose of this causation requirement “is to safeguard against speculative and conjectural claims.” (Viner v. Sweet, at p. 1241.) “It serves the essential purpose of ensuring that damages awarded for the attorney’s malpractice actually have been caused by the malpractice.” (Ibid.)
In this case, Dudley cannot establish that the claimed malpractice was the cause of her damages. As the trial court observed, the bankruptcy-triggered vacancy in Dudley’s trustee position “occurred long before the plaintiff sought Mr. Morris and his law firm.” And nothing in the pleading or motion papers supports an argument that there was any way to avoid the effect of the automatic vacancy. Thus, no causal connection exists between Morris’s legal advice concerning Dudley’s resignation and the claimed harm from loss of her position as trustee. Nor has Dudley established any causal connection between Morris’s asserted conflict of interest and her claimed damages.
c. Application to Dudley’s Claim for Breach of Contract
Dudley cannot state a cause of action for breach of contract against Laub.
“To state a cause of action for breach of contract, [the plaintiff] must plead the contract, his performance of the contract or excuse for nonperformance, [the defendant’s] breach and the resulting damage.” (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458.)
Here, as with her legal malpractice claim against Morris, Dudley cannot allege a causal connection between the claimed breach of contract by Laub and any resulting damage. The asserted agreement by Laub to resign as trustee so that Dudley could be reinstated post-dates the loss of her trustee position, which occurred in 2003 by operation of law. That being so, no conduct by Laub in making or breaching the asserted contract could have caused Dudley’s claimed damages. (Cf. St. Paul Fire & Marine Ins. Co. v. American Dynasty Surplus Lines Ins. Co. (2002) 101 Cal.App.4th 1038, 1061 [no causal connection between failure to provide insurance policy and claimed damages, where no coverage was available in any event].)
Moreover, the trust itself presents an insurmountable obstacle to Dudley’s contract claim against Laub. Under the terms of the Lincoln Trust, the concurrence of all trustees is needed to secure appointment as trustee. “ ‘A power to appoint trustees conferred by the terms of the trust can be exercised only under the circumstances and in the manner provided by the terms of the trust.’ (Rest.2d Trusts, § 108, com. (f), p. 239.)” (Crocker-Citizens National Bank v. Younger (1971) 4 Cal.3d 202, 211; see also § 15660.) Since unanimous consent of the trustees is required for appointment as trustee, Laub alone could not ensure Dudley’s reinstatement. Any agreement to do so would be “void as an unlawful deviation from the terms of the trust.” (Crocker-Citizens National Bank v. Younger,at p. 213.) Nor is there any legal basis for the speculative claim that Laub nevertheless could have cooperated in getting Dudley reappointed, despite her statutory unfitness for the office of trustee. (Cf. Bowles v. Superior Court (1955) 44 Cal.2d 574, 584 [“beneficiary has no right to compel the retention of a trustee who is unfit”].) Any such claim ignores the fiduciary duties owed by the trustees. (See, e.g., Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1133 [describing trust as “a fiduciary relationship”]; Saks v. Damon Raike & Co. (1992) 7 Cal.App.4th 419, 428 [summarizing trustees’ obligations].)
Section 4.1 of the trust thus provides in pertinent part: “If any one or more of the cotrustees fails to qualify or ceases to act as trustee during the lifetime of Constance [Dudley], the successor trustees shall be appointed by the unanimous vote of the remaining trustees.”
Nor can Dudley state a cause against for breach of contract against the other named defendants, Morris and his law firm. The allegations supporting the contract claim against these defendants are the same allegations leveled against them in the malpractice claim, and those allegations fail for the same reasons discussed above.
d. Application to Dudley’s Claim for Breach of the Covenant of Good Faith and Fair Dealing
Dudley’s covenant claim against Laub fares no better, since it depends for its vitality on her contract claim against him.
“The prerequisite for any action for breach of the implied covenant of good faith and fair dealing is the existence of a contractual relationship between the parties, since the covenant is an implied term in the contract.” (Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 49.) “ ‘The implied covenant of good faith and fair dealing is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated by the contract.’ ” (Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th 1089, 1094.)
Here, since Dudley cannot state a cause of action for breach of contract, she likewise cannot state a cause of action for breach of the covenant of good faith and fair dealing. Moreover, as with her other claims, Dudley is unable to establish the required causal connection between the claimed breach of the covenant and damages. (Thompson Pacific Const., Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 541.)
e. Application to Dudley’s Claim for Fraud
Finally, Dudley cannot establish a fraud claim against either Laub or Morris.
The required elements of a cause of action for fraud are: (1) misrepresentation (a false representation, concealment, or nondisclosure); (2) knowledge of its falsity; (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) resulting damage. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.)
As with her other causes of action, Dudley’s fraud claim stumbles on the element of resulting damage. (See, e.g., Goehring v. Chapman University, supra, 121 Cal.App.4th at p. 365 [“damages were not caused by the alleged misrepresentations that induced [the plaintiff] to attend [the university], but by his academic dismissal”].)
2. The Defects Cannot Be Cured.
“Whether to grant leave to amend a complaint is a matter within the discretion of the trial court.” (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091.) Where leave to amend has been denied, it is the plaintiff’s burden to demonstrate a reasonable possibility that the complaint’s defects can be cured by amendment. (Ibid.) In this case, Dudley has failed to carry that burden.
Given the impact of section 15643, which establishes that a vacancy in her trustee position occurred automatically in 2003, Dudley cannot establish causation for any of her pleaded claims. Nor does she suggest how the complaint could be amended to state a cause of action in light of this statute. As explained above, “where the nature of the plaintiff’s claim is clear, and under substantive law no liability exists, a court should deny leave to amend because no amendment could change the result.” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., supra, 68 Cal.App.4th at p. 459.) Denial of leave to amend here was proper on this basis.
Furthermore, Dudley chose to stand on her fifth amended complaint. “The failure to amend and state a cause of action against defendant is an admission that plaintiff has stated the case as strongly as he can and there are no facts that could be alleged to cure the defect.” (Cano v. Glover (2006) 143 Cal.App.4th 326, 330, citing Reynolds v. Bement, supra, 36 Cal.4th at p. 1091.)
For these reasons, we find no abuse of discretion in the trial court’s decision to sustain the demurrers without leave to amend.
3. The Trial Court Did Not Exhibit Bias Against Dudley.
Throughout her opening brief, Dudley maintains that the trial court exhibited bias and hostility toward her and her counsel at the hearing in this matter.
All litigants have “a due process right to an impartial trial judge under the state and federal Constitutions.” (People v. Guerra (2006) 37 Cal.4th 1067, 1111.) However, as the California Supreme Court has explained: “Mere expressions of opinion by a trial judge based on actual observation of the witnesses and evidence in the courtroom do not demonstrate a bias.” (Ibid.; see also, id. at p. 1112 [ “a trial court’s numerous rulings against a party—even when erroneous—do not establish a charge of judicial bias”]; Lester v. Lennane (2000) 84 Cal.App.4th 536, 568 [“skepticism toward [party’s] claims... does not tend to prove that the judge ruled based on... bias”].)
Our review of the hearing transcript convinces us that the trial court did not exhibit hostility or bias against Dudley or her attorney. Dudley’s contrary assertion “depends on a selective, out-of-context reading of the record.” (Lester v. Lennane, supra, 84 Cal.App.4th at p. 575.) We find no suggestion of bias in the court’s refusal to entertain further argument on extraneous points, such as Dudley’s bid for jurisdiction in family court. To the contrary, that judicial conduct shows that the court was exercising its “duty to control the trial proceedings.” (People v. Guerra, supra, 37 Cal.4th at p. 1111.) Here, as the hearing transcript reveals, the court treated Dudley and her counsel with respect, patience, and fairness, ultimately basing its decision solely on the legal issues presented. (Cf. People v. Scott (1997) 15 Cal.4th 1188, 1206 [no bias where court based its rulings on “the evidence properly presented at trial”].)
To sum up, the trial court acted properly in sustaining respondents’ demurrers without leave to amend. The decision-making process was fair and the court’s ruling was correct under the law.
DISPOSITION
We affirm the formal orders of March 2008 and July 2008, which sustained respondents’ demurrers without leave to amend and dismissed appellant’s complaint. Respondents shall have costs on appeal.
WE CONCUR: Bamattre-Manoukian, Acting P.J., Mihara, J.
According to Dudley, this provision gave her “full veto power to override any and all decisions that could affect the trust or her life estate interest therein.”
“There is a vacancy in the office of trustee in any of the following circumstances:
“(a) The person named as trustee rejects the trust.
“(b) The person named as trustee cannot be identified or does not exist.
“(c) The trustee resigns or is removed.
“(d) The trustee dies.
“(e) A conservator or guardian of the person or estate of an individual trustee is appointed.
“(f) The trustee files a petition for adjudication of bankruptcy or for approval of an arrangement, composition, or other extension under the federal Bankruptcy Code, or a petition filed against the trustee for any of these purposes is approved.
“(g) A trust company’s charter is revoked or powers are suspended, if the revocation or suspension is to be in effect for a period of 30 days or more.
“(h) A receiver is appointed for a trust company if the appointment is not vacated within a period of 30 days.” (§ 15643.)