Heggnes v. Risley

Filed 12/29/08 Heggnes v. Risley CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
HARALD HEGGNES et al.,
Plaintiffs and Appellants,
v.
ROBERT L. RISLEY et al.,
Defendants and Respondents.
B204008
(Los Angeles County
Super. Ct. No. LC075116)
APPEAL from a judgment of the Superior Court of Los Angeles County, Michael
Harwin, Judge. Reversed.
Law Offices of Ray B. Bowen, Jr. and Ray B. Bowen, Jr. for Plaintiffs and
Appellants.
Garrett & Tully, Robert Garrett, Ryan C. Squire and Scott B. Mahler for
Defendants and Respondents Robert L. Risley, Law Offices of Robert L. Risley and
Mary Lolonis.
Greenberg & Bass and James R. Felton for Defendant and Respondent Frank H.
Whitehead, III.
______________________________

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Harald Heggnes and Maria Heggnes appeal from the judgment entered in their
legal malpractice action after the trial court granted summary judgment in favor of the
Law Offices of Robert L. Risley and attorneys Robert L. Risley, Frank H. Whitehead, III
and Mary Lolonis (collectively Attorney Defendants). We reverse.
FACTS AND PROCEDURAL BACKGROUND
1. The Heggneses’ Unsuccessful Attempt To Purchase the Apartment Building
On April 30, 1996 the Heggneses entered into an agreement with George Mullin
III to manage a 41-unit apartment building on Langdon Avenue in Van Nuys. The
agreement also gave the Heggneses an option to purchase the building at any time prior
to May 1, 2006, but provided for cancellation of the agreement upon the uncured default
of either party.1
The Heggneses exercised their purchase option, and on August 23, 2001 escrow
was opened. The escrow instructions provided the total consideration for the sale was
$1,256,000, including the Heggneses‟ assumption of an existing $780,000 loan on the
building in favor of Quaker City Bank and execution of a new note for $191,000, secured
by a second deed of trust, in favor of Mullin‟s company, Green Street Group Ltd. The
escrow instructions specified an October 23, 2001 closing date but did not state time was
of the essence.2
1
The provision governing default by the Heggneses stated, in part, “Should any of
the terms, provisions, conditions or responsibilities contained herein not be met, this
agreement shall be in default. If this occurs, Mullin shall make written demand upon
Heggnes that the default be cured. Heggnes shall have fifteen (15) calendar days to cure
said default. Failure to do so shall give Mullin the right to cancel this agreement.”
2
The escrow instructions stated, “Prior to the expiration of the time specified in this
paragraph, I will hand you $131,800.00; $25,000.00 of which will be deposited with the
signing of these instructions, Buyer will deposit balance into escrow and necessary costs
and charges prior to close of escrow, and will deliver to you any instruments executed by
me and additional funds which this escrow requires from me, all of which you are
instructed to use and/or deliver provided that on or before October 23, 2001 you hold a
policy of title insurance with the usual title company‟s expectations, with a liability of not
less than $1,256,000.00 . . . .”

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The transaction was not completed by October 23, 2001. Quaker City Bank did
not approve Harald Heggnes‟s application for assumption of the existing loan until
December 3, 2001, and Mullin had refused on January 29, 2002 to accept a $191,000
note, secured by a second deed of trust, from the Heggneses notwithstanding the escrow
instructions provided he would do so.3
The Heggneses were unable to secure an
alternative source of funds until February 2002 at which time Keith and Norma LaFond
deposited $191,000 into escrow.
On January 30, 2002 Mullin sent the Heggneses a notice of default demanding
four defaults be cured within 15 days or the management agreement would be canceled.
The defaults identified were “Building and Safety issues and violations,” “Late payments
on loan obligations,” “Failure to name Mullin as an additional insured” and “All other
defaults as determined by Professional Property Inspection.” In a letter dated February
11, 2002 Whitehead, who had been retained by the Heggneses, disputed the Heggneses
were in default of the management agreement and stated, “In short, it appears that you are
attempting to thwart the Option to Purchase being exercised by my clients. Be sure that
any further attempt to do so will be met with decisive action under the law. It is my
suggestion that the parties work out the remaining issues in order to close Escrow no later
than February 28, 2002.”
In an undated letter from Mullin to the escrow officer, Richard Shewfelt, Mullin
stated, in part, “Your escrow for the sale of 8154 Langdon Ave., Van Nuys, Ca. has far
exceeded its closing time, therefore, please consider this letter a cancellation of the
escrow. This cancelation shall take effect immediately after the cancelation of the
following described contract takes effect. [¶] In accordance with the „Management
Agreement and Option to Purchase’ contract which was entered into when your buyers
(Maria and Har[a]ld Heggnes) purchased the property; please consider this letter an
3
The escrow instructions stated, “Second Deed of Trust to record, as part of the
total sales price on your usual forms, securing a note in the amount of $191,000.00,
executed by buyer herein in favor of Green Street Group, Ltd, dated during escrow,
bearing interest at the rate of 10.000% per annum . . . .”

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immediate cancellation of that contract as allowed for on the fourth line, item #13, page 9
of said contract. The fifteen day notifice [sic] of default time period has expired. [¶]
Should the buyers be able to close quickly, however, I will consider re-opening the
escrow at the price and terms specified in said contract.”
On March 23, 2002 Mullin, on the one hand, and Luis and Blanca Munoz, on the
other hand, signed a purchase contract with an option to buy-back the apartment building.
Both the purchase price and buy-back price were $1,420,000.
3. The Heggneses’ Failed Action Against Mullin and the Munozes
On May 8, 2002 Risley and Whitehead filed an action on behalf of the Heggneses
against Mullin, the Munozes and several business entities for, among other causes of
action, fraudulent conveyance and breach of contract (the underlying action). After
several successful demurrers the Heggneses filed a fourth amended complaint on March
14, 2003 essentially alleging they had fully complied with the escrow instructions but, as
escrow was ready to close, Mullin refused to proceed with the transaction and
fraudulently conveyed the apartment building to the Munozes.
The trial court sustained a demurrer to the fourth amended complaint without
leave to amend in the underlying action, finding the Heggneses had not complied with the
escrow instructions prior to the October 23, 2001 closing date and the allegations in their
complaint stating they had complied with escrow were both internally contradictory and
contradicted the escrow instructions. On appeal this court affirmed the trial court‟s order,
stating, “[T]he fact that the Heggneses did not fully comply with the escrow instructions,
as disclosed by the allegations and attachments to the Fourth Amended Complaint,
vitiates the foundation of their entire action.” (Heggnes v. Mullin (April 19, 2005,
B169865) [nonpub. opn.], at [p. 5] (Heggnes I)).
We also held the trial court did not abuse its discretion in denying leave to amend
the complaint yet again. “[T]he Heggneses now appear to be attempting to erase facts
stated in their earlier complaints. In the proposed Fifth Amended Complaint, for
instance, the inconvenient factual allegation that money was deposited into the escrow
account in November and December 2001 is replaced by a new allegation that funds were

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delivered in September 2001. . . . [T]he allegations in the proposed Fifth Amended
Complaint continue to demonstrate that the conditions precedent to the sale had not been
completed within the escrow period and that amended escrow instructions would have
been necessary in order to renew the transaction. It was not an abuse of discretion for the
trial court to deny leave to amend under these circumstances.” (Heggnes I, at [pp. 5-6].)
4. The Malpractice Complaint; the Trial Court’s Order Granting Summary
Judgment in Favor of the Attorney Defendants
On June 30, 2006 the Heggneses filed a complaint for professional negligence
against the Attorney Defendants, alleging “they neglected to plead all available ultimate
facts that were competent and relevant to the issues therein” and, as a result of their
negligence, the underlying action was dismissed.
The Attorney Defendants moved for summary judgment, arguing the Heggneses
could not establish the causation element of their legal malpractice action because, as this
court held in Heggnes I, the Heggneses failed to comply with the escrow instructions by
October 23, 2001. Accordingly, whether or not the Attorney Defendants were negligent,
the Heggneses could not have achieved a better result in the underlying action. In
response the Heggneses asserted the evidence submitted with their opposition papers
supported an argument escrow had been extended until at least March 1, 2002, which, in
turn, created a triable issue of material fact at to causation (that is, whether more skillful
pleading by the Attorney Defendants could have avoided dismissal of the underlying
action after successive successful demurrers).
The trial court granted the Attorney Defendants‟ motion for summary judgment,
finding, “[P]ursuant to the Court of Appeal opinion, escrow instructions were not
complied with and the Court had discretion to deny the 5th amendment. These issues
show that the plaintiff herein could not have ha[d] a better result.”4
4
After the trial court granted the Attorney Defendants‟ motion, a “judgment” was
signed and entered by the court on November 7, 2007. The judgment, however, was
entered only “in connection with [the Heggneses‟] complaint” and failed to address the
cross-complaint filed by the Attorney Defendants. The Heggneses purported to appeal

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DISCUSSION
1. Standard of Review
We review the trial court‟s grant of summary judgment de novo and decide
independently whether the parties have met their respective burdens and whether facts
not subject to triable dispute warrant judgment for the moving party as a matter of law.
(Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348; Guz v. Bechtel National, Inc.
(2000) 24 Cal.4th 317, 334; Code Civ. Proc., § 437c, subd. (c).) 5
When a defendant
moves for summary judgment in a situation in which the plaintiff would have the burden
of proof at trial by a preponderance of the evidence, the defendant may, but need not,
present evidence that conclusively negates an element of the plaintiff‟s cause of action.
Alternatively, the defendant may present evidence to “show[ ] that one or more elements
of the cause of action . . . cannot be established” by the plaintiff. (§ 437c, subd. (p)(2);
Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853.)
“[T]he defendant must present evidence that would preclude a reasonable trier of
fact from finding that it was more likely than not that the material fact was true [citation],
or the defendant must establish that an element of the claim cannot be established, by
presenting evidence that the plaintiff „does not possess and cannot reasonably obtain,
needed evidence.‟” (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990,
1003.) Once the defendant‟s initial burden has been met, the burden shifts to the plaintiff
to demonstrate, by reference to specific facts not just allegations in the pleadings, there is
from the November 7, 2007 judgment, which was not an appealable order. (See Holt v.
Booth (1991) 1 Cal.App.4th 1074, 1081 [“„[j]udgment rendered on a complaint alone,
unaccompanied by judgment on a pending cross-complaint, is not a final judgment and
appeal from it may be dismissed‟”].) Subsequently, the cross-complaint was dismissed;
and we exercise our discretion to treat the notice of appeal, filed before the dismissal of
the cross-complaint and the termination of the entire action, as a premature but valid
appeal from a proper judgment. (See Cal. Rules of Court, rule 8.104(e)(2) [“reviewing
court may treat a notice of appeal filed after the superior court has announced its intended
ruling, but before it has rendered judgment, as filed immediately after entry of
judgment”].)
5
Statutory references are to the Code of Civil Procedure unless otherwise indicated.

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a triable issue of material fact as to the cause of action. (§ 437c, subd. (p)(2); Aguilar v.
Atlantic Richfield Co., supra, 25 Cal.4th at p. 849.)
On review of an order granting summary judgment, we view the evidence in the
light most favorable to the opposing party, liberally construing the opposing party‟s
evidence and strictly scrutinizing the moving party‟s. (O’Riordan v. Federal Kemper
Life Assurance Co. (2005) 36 Cal.4th 281, 284.)
2. The Trial Court Improperly Granted Summary Judgment in Favor of the
Attorney Defendants
a. Law governing legal malpractice
To state a cause of action for legal malpractice, a plaintiff must plead “(1) the duty
of the attorney to use such skill, prudence, and diligence 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.)
To recover damages in a legal malpractice action, a plaintiff must prove “that but
for the alleged malpractice, it is more likely than not that the plaintiff would have
obtained a more favorable result.” (Viner v. Sweet (2003) 30 Cal.4th 1232, 1244; Judicial
Council of Cal. Civ. Jury Instns. (2006) CACI No. 601 [plaintiff must prove he or she
“would have obtained a better result if [defendant] had acted as a reasonably careful
attorney”].) This “but for” inquiry is properly reflected in the substantial factor causation
test applicable in negligence actions. (Viner, at p. 1239 [“„the “substantial factor” test
subsumes the “but for” test‟”]; CACI No. 430 [“[a] substantial factor in causing harm is a
factor that a reasonable person would consider to have contributed to the harm”].) The
substantial factor test, however, permits more than one cause of harm even if none was
sufficient in and of itself to cause the harm. A substantial factor causing harm “does not
have to be the only cause of the harm.” (CACI No. 430; see Viner, at p. 1240 [plaintiffs
alleged defendant attorneys‟ negligence combined with another‟s exploitation of that

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negligence, the underlying economic situation and other factors caused their losses]; see
also CACI No. 431.)
b. There is a triable issue of material fact as to causation
This court‟s decision in Heggnes I established, based on the allegations in the
pleadings filed by the Heggneses in the underlying action, that the Heggneses had not
performed all of the duties specified in the escrow instructions by the October 23, 2001
deadline.6
Even assuming that is true, and not simply an artifact of the Attorney
Defendants‟ allegedly defective pleading practice, the inability of the Heggneses to
satisfy all of the escrow requirements by the original deadline was not, standing alone,
fatal to their underlying claims against Mullin and the Munozes. “„The general rule in
equity is that time is not of the essence unless it has been made so by its express terms or
is necessarily so from the nature of the contract. [Citation.] . . . “[I]t is not enough that a
time is mentioned during which or before which something shall be done [citations].”
[Citation.] This language . . . is in consonance with the modern view that valuable
contractual rights should not be surrendered or forfeitures suffered by a slight delay in
performance unless such intention clearly appears from the contract or where specific
enforcement will work injustice after a delayed tender.‟” (Fowler v. Ross (1983) 142
Cal.App.3d 472, 479, italics omitted.) However, even when a contract specifies time is
of the essence, California courts might not enforce a time deadline in a real estate sales
contract if “there has been a waiver or potential forfeiture.” (Galdjie v. Darwish (2003)
113 Cal.App.4th 1331, 1342.) If, as the Heggneses contend, escrow was extended by
6
In affirming the trial court‟s ruling that, as pleaded, the fourth amended complaint
failed to state a cause of action, we did not address whether escrow had been extended by
oral agreement or the parties‟ conduct because that was not at issue. (See Miklosy v.
Regents of University of California (2008) 44 Cal.4th 876, 900, fn. 7 [“„[i]t is axiomatic
that cases are not authority for propositions not considered‟”]; People v. Ault (2004) 33
Cal.4th 1250, 1268, fn. 10 [same].) Indeed, when discussing the trial court‟s denial of
relief as to the Heggneses under section 473, subdivision (b) -- which we also affirmed --
we observed “their complaint may have been defective due to attorney error.”
(Heggnes I, at [p. 8].)

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either oral agreement or the parties‟ conduct,7
their willingness and ability to perform
after the October 23, 2001 deadline may have been sufficient to support some or all of
their claims in Heggnes I. And, that is the gravamen of the Heggneses‟ malpractice
action against the Attorney Defendants: Their failure to plead escrow had been extended
-- or to plead it clearly and without first including a number of inconsistent factual
allegations in a series of earlier iterations of the complaint -- was what vitiated their
claims in Heggnes I, not that they failed to meet the October 23, 2001 deadline.
In opposition to the Attorney Defendants‟ motion for summary judgment, the
Heggneses submitted Harald Heggnes‟s declaration stating, “Mr. Mullin verbally agreed
with my wife and me to extend the escrow period,” and several documents demonstrating
activity in connection with the transaction occurred without objection after October 23,
2001. For example, a letter from Mullin to Shewfelt, apparently prepared in early
January 2002,8
provides the “breakdown on 8154 Langdon closing” should include
$15,000 cash payable to Mullin and 30 percent of the seller‟s total cash payable to Mary
B. Mullin. Handwritten on the bottom of the letter is a request to Shewfelt for “an
approximate closing statement (verbal or written). As I circled on page 2 item #1, + #5
There are NO prorations, Buyer pays all costs of sale (escrow, title insurance, recording
. . . etc.) and amount to me is NET (fixed). No changes on page 4.” In response to
7
As discussed, the escrow instructions themselves did not state time was of the
essence. In addition, the purchase option specified it could be exercised at any time until
May 1, 2006. That is, if the management agreement had not been canceled due to their
ostensible default, the Heggneses would have been permitted to exercise the option until
that date. (See Erich v. Granoff (1980) 109 Cal.App.3d 920, 927 [“option may be viewed
as a continuing, irrevocable offer to sell property to the optionee within the time
constraints of the option contract and at the price set forth therein”]; C. Robert Nattress &
Assocs. v. Cidco (1986) 184 Cal.App.3d 55, 67 [“unlike a conditional or qualified
acceptance in the formation stage of a contract, a purported exercise of an option which is
qualified or made conditional, does not in and of itself terminate the option if there yet
remains time during the term of the option in which the unauthorized qualification or
condition may be removed and the option exercised absolutely”].)
8
Although the letter is dated “January 10, 2001,” use of “2001,” rather than “2002,”
is clearly a mistake since escrow was not opened until August 2001.

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Mullin‟s letter, two amendments to the escrow instructions were prepared dated
January 15, 2002.
The Heggneses also submitted a declaration from Douglas Shewfelt, Richard
Shewfelt‟s son and an escrow officer with the escrow company since before 2001, who
reviewed the escrow file for the transaction because his father had retired. Douglas
Shewfelt stated, “Although the initial escrow instructions provided a projected closing
date of October 23, 2001, the escrow instructions were amended on a number of
occasions and the projected escrow closing date was extended in order to allow adequate
time for the parties to the escrow to perform in accordance with the terms and conditions
of the escrow.” Douglas Shewfelt identified a number of documents in the file dated
after October 23, 2001 including the buyer‟s and seller‟s estimated closing statements
dated March 1, 2002 and a facsimile cover letter to Mullin dated February 25, 2002
transmitting the seller‟s tentative closing statement.
This evidence is sufficient to demonstrate a triable issue of fact whether escrow
had been extended by oral agreement, the parties‟ conduct or both and, as a consequence,
whether the Attorney Defendants‟ negligence (either in investigating the factual basis for
the Heggneses‟ claim or in pleading them) caused the underlying action to be dismissed.
The Attorney Defendants challenge this conclusion by insisting the evidence
submitted by the Heggneses in opposition to the summary judgment motion is not
admissible (because, for example, it is hearsay or lacks adequate foundation). Although
the Attorney Defendants filed written objections to the evidence submitted by the
Heggneses, the trial court did not rule on them; and the objections are deemed forfeited
on appeal. (See, e.g., Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, 623,
disapproved on other grounds in Zamos v. Stroud (2004) 32 Cal.4th 958, 973; Demps v.
San Francisco Housing Authority (2007) 149 Cal.App.4th 564, 577.)9
“„[W]e must view
9
Although this court and many other Courts of Appeal have held evidentiary
objections not expressly ruled on at the time of decision on a summary judgment motion
are not preserved on appeal, the Sixth District recently disagreed; and the issue is now

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the objectionable evidence as having been admitted in evidence and therefore as part of
the record.‟” (City of Long Beach v. Farmers & Merchants Bank (2000) 81 Cal.App.4th
780, 783.)
To be sure, as the Attorney Defendants argue, courts have recognized an exception
to the forfeiture rule “when counsel specifically requests a ruling on evidentiary
objections and the trial court nonetheless declines to rule.” (Swat-Fame, Inc. v.
Goldstein, supra, 101 Cal.App.4th at p. 624, fn. 7; see City of Long Beach v. Farmers &
Merchants Bank, supra, 81 Cal.App.4th at p. 784 [evidentiary objections not waived;
“there was nothing further defense counsel could be expected to do in terms of seeking
rulings on the previously filed evidentiary objections beyond personally raising the issue
on two separate occasions in the presence of the trial court”].) But the Attorney
Defendants fail to cite to the record in support of their contention they made any such
specific request, and we are unable to find one in our review of the transcripts from the
two hearings the court held to consider the motion for summary judgment or the third
hearing at which the parties requested the setting of a trial date on the Attorney
Defendants‟ cross-complaint -- a review this court is not, in any event, required to
perform. (Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 768 [“it is counsel‟s
duty to point out portions of the record that support the position taken on appeal”; “[t]he
appellate court is not required to search the record on its own seeking error.”]; Mansell v.
Board of Administration (1994) 30 Cal.App.4th 539, 545-546 [it is not the proper
function of Court of Appeal to search the record on behalf of appellants or to serve as
“backup appellate counsel”].)
Finally, the Attorney Defendants contend summary judgment in their favor was
nevertheless appropriate because the fourth amended complaint in the underlying action
did, in fact, allege that escrow was extended through April 2002. For example, the
pending before the Supreme Court. (Reid v. Google, Inc. (2007) 155 Cal.App.4th 1342,
review granted January 30, 2008, S158965.)

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Attorney Defendants point to the allegations, “In April 2002, while the Escrow was still
pending, the Defendants fraudulently transferred the subject property to [Defendants]
. . . .,” and “Plaintiffs have duly complied with and performed any and all conditions
precedent to the within Causes of Action, or alternatively, performance or occurrence
thereof has been duly excused or waived.”10
Even broadly construing the language
identified in the complaint, these allegations fail to convey the theory that escrow was
extended either by oral agreement or the parties‟ conduct. Moreover, any attempt to
construe the proposed fifth amended complaint or to submit yet another proposed version
of the pleading to allege an extension of escrow was doomed by the Attorney
Defendants‟ “attempts in their prior complaints to artfully plead around the facts”
previously alleged. (Heggnes I, at [p. 5].) That is, not only was the extension of escrow
not plainly set forth but also that theory was fatally inconsistent with earlier pleadings.
Whether more skillful lawyering could have framed a complaint that avoided these flaws
is a triable issue of fact that required denial of the motion for summary judgment.
10
The Attorney Defendants also point out that in their opening brief in Heggnes I
they asserted “escrow remained open until Respondent Mullin signed written instructions
canceling it in December, a date far beyond that called for in the original instruction.”
They also argued, “Although not a pleading issue, a number of steps were taken by both
parties until Mullin asked to cancel. . . . [¶] . . . One cannot call out one date in original
instructions and then compare it to another date of actual cancellation of escrow and say
there is a contraction.” Although we take judicial notice of that brief as requested (see
Evid. Code, §§ 452, 459), these arguments were directed to the Heggneses‟ contention
there was no contradiction between the allegations in the fourth amended complaint and
the escrow instructions attached as an exhibit to the complaint and, like the allegations in
the fourth amended complaint itself, were not intended to set forth a theory of liability
against Mullins premised on a mutually agreed extension of the escrow closing date. As
noted, we did not evaluate an extension theory in Heggnes I. (See fn. 6, above.)

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DISPOSITION
The judgment is reversed, and the cause remanded for further proceedings not
inconsistent with this opinion. The Heggneses are to recover their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
PERLUSS, P. J.
We concur:
ZELON, J.
JACKSON, J.

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