Plaintiff trustee appealed a judgment from the Superior Court of San Diego County (California), which dismissed his action against defendants, a law firm and its attorney, for legal malpractice and breach of fiduciary duty.
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Overview
The court affirmed dismissal of plaintiff creditor’s action against defendants, a law firm and its attorney, for legal malpractice and breach of fiduciary duty in their representation of debtor corporations because plaintiff failed to state facts sufficient to constitute a cause of action. Although they were property of the respective bankruptcy estates of debtor corporations under federal law, the choses in action against defendants based on legal malpractice and breach of fiduciary duty were not assignable under principles of California law and public policy because they were founded upon a duty owed by defendants solely to debtor corporations, and therefore were of a purely personal nature. Since debtor corporations had no right to assign the claims, a transfer of the claims by the trustee of debtor corporations’ bankruptcy estates to plaintiff as a creditor of debtor corporations was invalid, regardless of the approval of the bankruptcy court. Further, plaintiff was unable show that its pleading defect was curable by amendment where a change of its alleged status from assignee to special representative of debtor corporations would not have altered the claims’ assignability.
Outcome
The court affirmed the dismissal of plaintiff creditor’s action against defendants, a law firm and its attorney, for legal malpractice and breach of fiduciary duty. Even though the claims belonged to debtor corporations’ bankruptcy estates, debtor corporations’ trustee was unable to assign these choses of action to plaintiff because they were of a personal nature to debtor corporations.