Tentative Ruling
Re: ????? ??????????? ?????????? Michael A. Jizmejian v. Curtis R. Wong
??????????????????????????????????? Superior Court No. 15CECG03178??
Hearing Date: ????????? Tuesday January 31, 2017 (Dept. 403)
Motion: ??????????????????? Defendants? Motion for Summary Judgement or Summary
Adjudication
Tentative Ruling:
To DENY Defendants? Motion for Summary Judgment.? ? ? ?
To GRANT Defendants? Motion for Summary Adjudication on the issue of MICHAEL?S standing.
To DECLINE to rule on Defendants? objections. This Court has only considered relevant and pertinent evidence. And none of Defendants? objections are material to the outcome of this motion. (Code Civ. Proc., ? 437c, subd. (q).)
Explanation:
A defendant moving for summary judgment has the initial burden of showing a cause of action is without merit. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A defendant meets that burden by showing that one or more elements of the cause of action cannot be established, or that there is a complete defense thereto. (Code Civ. Proc. ? 437c, subd. (p)(2).) Where defendant makes such a showing, the burden shifts to plaintiff to produce evidence demonstrating the existence of a triable issue of material fact. (Aguilar, supra, 25 Cal.4th at p. 849.) The pleadings determine the scope of relevant issues. (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 74; Hutton v. Fidelity Nat’l Title Co. (2013) 213 Cal.App.4th 486, 493.)
PROFESSIONAL NEGLIGENCE
The elements of professional negligence in accounting are: (1) the duty of the accountant to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the accountant’s negligence. (Giacometti v.
Aulla, LLC (2010) 187 Cal.App.4th 1133, 1137; Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 833.)
Here, Plaintiffs only asserts one cause of action, professional negligence. (Complaint.) They assert that WONG had a duty to use such skill as other accountants and tax preparers commonly possess and exercise, but that he breached that duty when he allocated all income to MICHAEL without advising Plaintiffs of the consequences of this type of tax filing. (Id. at ?? 13, 24.)? As a result, JODI was denied SSDI. (Id. at ? 25.) Therefore, summary judgment is appropriate if Defendants can show that one or more elements of professional negligence cannot be established.
Duty
The standards to which an accountant’s work must conform can only be established by expert testimony. (Lindner v. Barlow, Davis & Wood (1962) 210 Cal.App.2d 660, 664.) Expert declarations must include facts showing: (1) the matters relied upon by the expert in forming the opinion; (2) that the declarant’s opinion rests on matters of a type reasonably relied upon by experts; and (3) the factual basis for the opinion. (Kelley v. Trunk (1998) 66 Cal.App.4th 519, 524; In re Lockheed Litig. Cases (2004) 115 Cal.App.4th 558, 563-564.) The expert?s opinion is limited in that one based on assumptions of fact, speculation or conjecture, or lacks evidentiary value, may be excluded. (Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1110?1111; McGonnell v. Kaiser Gypsum Co. (2002) 98 Cal.App.4th 1098, 1106; City of San Diego v. Sobke (1998) 65 Cal.App.4th 379, 396.) Declarations must also contain facts showing the expert’s qualifications (competency) to express the opinion in question; e.g., facts showing the declarant has the training, experience or necessary skill to render an opinion on the particular matters in controversy. (Howard Entertainment, Inc. v. Kudrow (2012) 208 Cal.App.4th 1102, 1107, 1115.)
Defendants use expert Michelle R. Ellis to attack duty. Ms. Ellis is a Certified Public
Accountant (CPA) who currently works as a Principal at the accounting firm KCoe Isom, LLC. (SOE, filed: 11/8/16, Tab C: Ellis Dec ?2.) Ms. Ellis?s CV is attached, it is sufficient to show that she is qualified to render an opinion here. She has fifteen years of experiences in finance and displays a general knowledge of accounting. She also holds a current CPA license. (Id. at Tab C: Ellis CV.)
Fist, Ms. Ellis defines the applicable standard of care: A CPA?s duty is defined by the engagement letter. (SOE, filed: 11/8/16, Tab C: Ellis Dec ? 17.) Where it limits services to tax preparation, an accountant is required ?(1) to prepare and report accurate tax returns, and (2) report in a way that is compliant with the facts and tax laws in order to minimized the tax burden of the their clients.? (Id. at ? 13.) Then Ms. Ellis gives her opinion based on her review of the materials. (Id. at ? 6.) She notes that each engagement letter between WONG and the Plaintiffs was limited to tax preparation. (Id. at ? 17; SOE, filed: 11/8/16 Ex. J.) So she checks if WONG accurately prepared the tax returns according to the facts that he was aware of. (SOE, filed: 11/8/16, Tab C: Ellis Dec ?? 11-14.) She finds that WONG made the unilateral decision to allocate the business income to MICHAEL because JODI had very limited involvement in their business. (Id. at ?? 12, 13.) Ms. Ellis concludes that WONG met the applicable standard of care because there were no facts to indicate that alternative allocations were appropriate. (Id. at ? 18.) Ultimately, her opinion is sufficient to negate duty and therefore professional negligence: her declaration sets forth the basis for her opinion, reflects a sufficient analysis WONG?s actions, and concludes that WONG did not breach his duty. Defendants meet their burden.
Opposition
Where the moving party produces competent expert opinion declarations showing that there is no triable issue of fact on an essential element of the opposing party’s claim, the opposing party’s burden is to produce competent expert opinion declarations to the contrary. (Ochoa v. Pacific Gas & Elec. Co. (1998) 61 Cal.App.4th 1480, 1487; Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761-762.) So doing raises a triable issue of fact. (Towns v. Davidson (2007) 147 Cal.App.4th 461, 472; Hanson v. Grode (1999) 76 Cal.App.4th 601, 606-607.)
Plaintiffs submit the declaration of expert James P. Braun to support a finding of duty. Mr. Braun is CPA who currently works as a Principal at the accounting firm Tamiyasu, Smith, Horn, and Braun, Inc. (Opposition SOE, filed: 1/11/17 Ex. 5: Braun Dec ? 1.) Mr. Braun?s CV is attached, it is sufficient to show that he is qualified to render an opinion here. He has thirty-four years of experiences in finance; one of his many specializations is tax consulting and preparation. He also holds a current CPA license. (Id. at Ex. 5: Braun CV.)
Fist, Mr. Braun defines the applicable standard of care: When acting in the capacity of a tax preparer financial advisor, an accountant should accurately prepare tax returns and advise about the consequences of decisions made on the returns based on relevant facts. (Opposition SOE, filed: 1/11/17 Ex. 5: Braun Dec ? 16.) Then Mr. Braun gives his opinion based on his review of the materials. (Id. at ? 4; Opposition SOE, filed: 1/11/17 Ex. 8.) He notes that WONG was hired as a tax preparer financial advisor. (Opposition SOE, filed: 1/11/17 Ex. 5: Braun Dec ?? 10, 16.) So he looks at the facts available to WONG and checks if WONG filed and advised accordingly. (Id. at ?? 6, 8, 14.) He finds that WONG made the unilateral decision to allocate the business income to MICHAEL despite JODI?S substantial involvement in their business. (Id. at ?? 6, 8, 10.) Mr. Braun concludes that WONG did not meet the applicable standard of care because he ignored facts which supported alternative allocations that would have provided a basis for JODI?S SSDI. (Id. at ? 16.) Ultimately, triable issues were raised by Mr. Braun on the element of breach of duty: his declaration sets forth the basis for his opinion, reflects a sufficient analysis WONG?s actions, and concludes that WONG breached his duty. Plaintiffs meet their burden. Motion for summary judgment is denied.
?
Standing
Social Security disability insurance payments received during marriage, as well as all assets acquired by their use, are the separate property of the disabled spouse. These are not alienable, assignable, nor subject to creditors. (In re Marriage o.f Peterson (2016) 243 Cal.App.4th 923, 930-31; In re Marriage of Hopkins (2009) 173 Cal.App.4th 281.) As such, standing to assert a claim for damages based thereupon belongs only to the aggrieved spouse. (Redwing v. Moncravie (1933) 131 Cal.App. 569, 572; In
Wetzstein v. Thomasson (1939) 34 Cal.App.2d 554, 561; Rodriguez v.? Bethlehem Steel Corp. (1974) 12 Cal.3d 382, 409.)
Defendants argue that MICHAEL lacks standing because Plaintiffs? only claim- professional negligence, is based on JODI being denied SSDI. (Memo, filed: 11/8/16 p3 ? A.) Defendants? position is that SSDI is separate property, and so standing to pursue damages based thereupon is vested only in the affected spouse. (Ibid.) Plaintiffs argue that MICAHEL has standing because SSDI is community property. (Opposition Memo, filed: 1/11/17 p6 lns 7-9.) Ultimately, Plaintiffs are mistaken but Defendants? position is supported by precedent (see above). As such, JODI alone has standing to pursue damages; MICHAEL lacks standing and does not therefore state a cause of action. (see Sacramento County Fire Protection District v. Sacramento County Assessment Appeals Board (1999) 75 Cal.App.4th 327, 331.) Accordingly, summary adjudication of this issue is appropriate because MICHAEL cannot assert professional negligence as a matter of law. Further, Plaintiffs? assertions regarding contract damages (e.g. ?fees paid? [Opposition memo, filed: 1/11/17 p6 lns 9-10 & 25-28; p7 lns 1-5]) are not relevant to the determination of whether MICHAEL has standing because the only cause of action plead is professional negligence. Motion for summary adjudication as to the issue of MICHAEL?S standing is granted.
Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary.? The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.
Tentative Ruling
Issued By: ??????????KCK??????????????? on 01/30/17
(Judge?s initials) ??????? (Date)