LEGAL MEMOS

Lazar v. Bishop (2024) 107 Cal.App.5th 668. This was an action in which an assignee brought suit against real estate brokers for breach of fiduciary duty they owed the assignor in connection with the sale of a house. Although the trial court granted summary judgment, the Court of Appeal reversed holding that the assignee was a real party in interest pursuant to Code of Civil Procedure § 367 and had standing to sue the brokers because the causes of action were generally assignable. Civil Code § 954. There is an exception for highly personalized tort causes of action and legal malpractice claims, but those exceptions differ significantly from a cause of action against real estate brokers for breach of fiduciary duty which is in the nature of a constructive fraud claim and does not involve highly personalized rights of recovery.

Newell v. Superior Court (2024) 107 Cal.App.5th 728. A daughter filed a petition challenging the validity of trust amendments that changed the trustee and sole beneficiary of her father’s Trust from her to her father’s caregiver. When the caregiver used Trust assets to purchase real property, the daughter then recorded a lis pendens against the property and requested that a constructive trust be imposed.

The Court of Appeal directed that a motion to expunge the lis pendens should be denied because the daughter’s motion, if successful, would affect title to the property and pled a real property claim. The Trust provision naming the caregiver as beneficiary was presumed to be the product of fraud and undue influence given the caretaker’s position when the father executed the trust pursuant to Probate Code § 21380(a). If the caretaker failed to establish that the father’s donative transfer was not the product of fraud or undue influence, the court would remove the caregiver as Trustee and a new Trustee would need to be designated, who would then hold title to the property in his or her name as Successor Trustee. In that event, the daughter’s petition would change the name of the title holder. Thus the Probate Court erred in ruling that the daughter’s petition did not contain a real property claim within the meaning of CCP § 405.4.

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