Edmunds v. Superior Court

24 Cal. App. 4th 221, 29 Cal. Rptr. 2d 281, 94 Cal. Daily Op. Serv. 2712, 94 Daily Journal DAR 5137, 1994 Cal. App. LEXIS 334
CourtCalifornia Court of Appeal
DecidedApril 18, 1994
DocketD020481
StatusPublished
Cited by26 cases

This text of 24 Cal. App. 4th 221 (Edmunds v. Superior Court) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Edmunds v. Superior Court, 24 Cal. App. 4th 221, 29 Cal. Rptr. 2d 281, 94 Cal. Daily Op. Serv. 2712, 94 Daily Journal DAR 5137, 1994 Cal. App. LEXIS 334 (Cal. Ct. App. 1994).

Opinion

Opinion

HUFFMAN, Acting P. J.

Petitioners John S. Edmunds, attorney at law, a Hawaii law corporation; his Hawaii law partnership, Edmunds, Verga, Van Etten & O’Brien; and Edmunds as an individual (collectively, Edmunds) bring this petition for writ of mandate to require the superior court to vacate its order denying Edmunds’s motion to quash service of summons and complaint, and enter a new order granting the motion. Edmunds has been sued by Len Ronson, an individual, and his fellow limited partners (collectively, Ronson) in a now-dissolved California limited partnership known as Manchester Hawaii Properties, Ltd. (MHP), on theories of professional negligence, breach of fiduciary duty, fraud, interference with prospective economic advantage and/or contractual relations, and conspiracy, arising out of legal representation Edmunds provided to MHP in Hawaii litigation. Edmunds’s motion to quash was based on the argument that he, as a Hawaii attorney not admitted to practice in California, had represented the partnership before the state courts of Hawaii concerning rights to real estate located in the State of Hawaii, such that sufficient minimum contacts do not exist between Edmunds and the State of California and his conduct, even if causing an effect within California, does not represent the kind of purposeful availment of the benefits and protections of California law such that the assertion of California jurisdiction would be reasonable. The trial court disagreed, finding that Edmunds had caused an effect in California through acts or omissions which occurred elsewhere because the evidence suggested that Edmunds knew of possible breaches of fiduciary duty toward Ronson on the part of the general partner of MHP, Douglas Manchester and his company, Torrey Enterprises, Inc. (TEI) (collectively, Manchester). The trial *225 court also found that it was not unduly inconvenient for Edmunds to defend this action in California, when all the relevant factors were considered.

Finding substantial evidence does not support the trial court’s order, we grant the petition for writ of mandate.

Factual and Procedural Background

Edmunds is the second set of attorney defendants Ronson has sued for legal malpractice and other theories based upon the MHP transactions. In companion writ proceedings concerning the first set of attorney defendants, Sheppard, Mullin, Richter & Hampton and its individual partner, Christopher B. Neils (collectively Sheppard Mullin), we recently outlined the factual background of the Hawaii litigation in which Edmunds was defense counsel for MHP. (Ronson v. Superior Court * (Cal.App.).) 1 For purposes of this opinion, we summarize only the background facts of Edmunds’s involvement in the transactions, which gave rise to this action for legal malpractice and related theories.

MHP was sued in Hawaii state court on June 20, 1989, by AMFAC Corporation (AMFAC), its subtenant on MHP’s leased real property, on an alleged oral agreement to purchase MHP’s leasehold interest in the property. Previously, MHP’s general partner, Manchester, had been negotiating with the lessor of the property, the Estate of James Campbell, for the partnership to buy the real property underlying MHP’s long-term lease. Ronson alleges that Manchester wrote a letter of June 8, 1989, offering to buy out the limited partners’ interests in the partnership, in which he failed to disclose certain material facts about the transaction, including that a purchase agreement had already been made, which was quite attractive in terms of price and rent obligations. Around the time AMFAC filed suit, the California attorneys representing Manchester (Sheppard Mullin) briefly represented MHP as well, first in attempting to hold off the AMFAC litigation and then in assisting Manchester in finding Hawaii counsel to handle the Hawaii litigation. Edmunds reviewed the file June 16, 1989, and a retainer agreement June 21, 1989, and began representing MHP in the AMFAC action.

On July 21,1989, Edmunds traveled to California to represent Manchester in his deposition in the AMFAC matter. In connection with taking the deposition, AMFAC’s attorney accused Manchester of breaching fiduciary duties owed to Ronson. In his deposition, Edmunds states that issues were discussed at the Manchester deposition about whether the AMFAC offer was *226 adequately disclosed to Ronson and whether Ronson was told it was the partnership which had the sole opportunity to buy the property. Edmunds also discussed generally with Manchester at that time the duties owed by the general partner and the partnership, as well as the partnership’s attorneys, to make full disclosure of material facts to the limited partners concerning the transaction and the proposed buyout or the buyout that had taken place as to some of the limited partners’ interests. Edmunds and Manchester also generally discussed the various alternative courses of action available under the partnership agreement, such as dissolving the partnership or buying out the limited partners if their consent could not be obtained to one of the versions of the transaction as then proposed (i.e., selling the leasehold). Although Edmunds testified that he, as litigation counsel, believed the general partner was represented by California counsel, Sheppard Mullin, as to the transactional or business matters, including the disclosure issue, Edmunds reviewed one or more of the letters to the limited partners that had either gone out or was being proposed to be sent out, and made a couple of comments. However, Edmunds testified that he explained to the general partner that he could not give him legal advice about the disclosure matters, in light of the fiduciary duty owed by the general partner and Edmunds as the partnership’s attorney to the limited partners. Edmunds’s view was that he was brought into the matter only for the Hawaii litigation, not for the purposes of evaluating the business.

By July 24, 1989, Edmunds had returned to Hawaii and participated on that date in a six-way trans-Pacific telephone conference with Manchester and associates and the California attorneys, in which further disclosure of material facts to the limited partners was discussed. Pursuant to that discussion, Sheppard Mullin partner Neils prepared a draft second disclosure letter and release, which was sent to Manchester and a copy transmitted to Edmunds July 26, 1989, for his review. As requested, Edmunds reviewed the documents, made a correction, and communicated with Manchester about the letter. Manchester personnel also sent him another draft of the letter July 27, 1989, with a request for review and comment. Edmunds’s correction to the first letter consisted of adding the word “not” to one sentence and, as to the second letter, suggesting two additions (that it was always intended that the AMFAC offer be matched, and that the consent of the limited partners be obtained to any additional capital call).

In September 1989 AMFAC’s counsel was again alleging that Manchester had breached fiduciary duties by depriving the limited partners of participation in the property transaction.

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Bluebook (online)
24 Cal. App. 4th 221, 29 Cal. Rptr. 2d 281, 94 Cal. Daily Op. Serv. 2712, 94 Daily Journal DAR 5137, 1994 Cal. App. LEXIS 334, Counsel Stack Legal Research, https://law.counselstack.com/opinion/edmunds-v-superior-court-calctapp-1994.