Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC312914, John P. Shook, Judge. Affirmed.
Baute & Tidus, Mark D. Baute, David P. Chrochetiere and Patrick M. Maloney for Plaintiffs and Appellants.
Irell & Manella, Andra Barmash Greene, Marc S. Maister, Michael R. Fehner and Allison L. Libeu for Defendant and Respondent.
JACKSON, J.
INTRODUCTION
Plaintiffs AmerisourceBergen Corporation and AmerisourceBergen Services Corporation (collectively, BBC) appeal from summary judgment entered in favor of defendant Paul, Hastings, Janofsky & Walker (Paul, Hastings). We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
BBC employed Donald R. Roden (Roden) first as its president and later as its chief executive officer under the terms of an employment agreement dated October 16, 1995 (Employment Agreement). On November 3, 1999, BBC terminated Roden’s employment without cause. A disagreement ensued concerning Roden’s rights under the Employment Agreement with respect to BBC’s employee benefit plans, including Roden’s right to participate in BBC’s Supplemental Executive Retirement Plan (SERP).
Plaintiffs have chosen to use the designation “BBC” on appeal. This appears to be because the company which employed Roden in 1995 was Bergen Brunswig Corporation, but it merged with AmeriSource Health Corporation in 2001, resulting in operations being carried on by AmerisourceBergen Corporation and AmerisourceBergen Services Corporation.
Roden filed a lawsuit for breach of contract and other causes of action. BBC engaged the services of Paul, Hastings, a law firm, in seeking to negotiate a settlement with Roden. After lengthy negotiations, BBC authorized Paul, Hastings to prepare an offer of compromise under Code of Civil Procedure section 998.
The action was Donald R. Roden v. Bergen Brunswig Corporation et al. (Super. Ct. Orange County, 2000, No. CC05905).
A Paul, Hastings partner prepared and submitted to Roden on June 30, 2000, an offer which provided in pertinent part as follows: “Pursuant to California Code of Civil Procedure Section 998, [BBC] hereby offers to have judgment entered on plaintiff’s First Amended Complaint on the following terms: [¶] 1. In favor of plaintiff in the amount of $5,000,000, less legally required deductions. [¶] 2. Continuation of the benefits provided in Section 5(d), (e), and (i) of his Employment Contract. [¶] 3. Reasonable attorney fees and costs in an amount to be determined by the Court” (section 998 offer). Roden accepted the section 998 offer. At his request, the court entered judgment incorporating the offer on July 27, 2000.
Paul, Hastings drafted the section 998 offer and reviewed it with BBC’s Chairman and Chief Legal Officer. BBC intended to authorize an offer only for a lump sum payment of $5 million to liquidate fully and finally Roden’s employment claims, including SERP claims, plus continued participation in BBC’s medical insurance and automobile programs. The Paul, Hastings partner intended that the $5 million lump sum offered in paragraph 1 would include SERP claims. Roden interpreted paragraph 2, the continuation of benefits provision, as including SERP benefits. Litigation ensued over interpretation of the judgment (in effect, the terms of the section 998 offer) and the dollar amounts owed to Roden thereunder.
The trial court issued an order in implementation of judgment, in which the court ruled that the SERP benefits were not included in the lump sum provision in paragraph 1, but rather were part of the continuing benefits under paragraph 2. BBC appealed. The Fourth District Court of Appeal affirmed the trial court’s order in Roden v. Bergen Brunswig Corp. (2003) 107 Cal.App.4th 620 (Roden I).
Subsequently, there was another Roden published opinion with respect to BBC’s appeal from an order allowing postjudgment discovery and its petition for writ of mandate filed regarding the same issue. In Roden v. AmerisourceBergen Corp. (2005) 130 Cal.App.4th 211 (Roden II), the court dismissed the appeal and denied the petition.
In 2001, subsequent to the trial court’s implementation order, BBC completed a corporate merger which triggered another type of SERP benefit, a change-in-control benefit (CIC benefit). As a result, Roden had a basis for obtaining a much larger dollar amount for his SERP benefits.
When Roden attempted to collect the amounts due, the parties disagreed as to the dollar amounts for the continued benefits, including the CIC and other SERP benefits. The trial court issued its second order in implementation of judgment, in which the court ruled that Roden was entitled to SERP benefits, including CIC benefits, in the amount of $14,432,141.74, plus interest. BBC appealed. The Fourth District Court of Appeal affirmed in Roden v. AmerisourceBergen Corp. (2007) 155 Cal.App.4th 1548 (Roden III).
Paul, Hastings continued providing legal services to BBC throughout the litigation until February 2004. In March 2004, BBC filed a lawsuit against Paul, Hastings for professional negligence and negligent breach of fiduciary duty. After discovery had proceeded, in 2007, Paul, Hastings moved for summary judgment on the basis that BBC could not raise a triable issue of material fact as to whether Paul, Hastings’s alleged acts or omissions caused any harm to BBC or whether BBC had sustained any recoverable damages as a result of the alleged acts or omissions.
After a hearing, the trial court granted Paul, Hastings’s motion for summary judgment on the basis that BBC had failed to raise a triable issue of fact as to causation and damages. The court dismissed BBC’s operative complaint and entered judgment in favor of Paul, Hastings.
DISCUSSION
BBC contends that the trial court erred in granting Paul, Hastings’s motion for summary judgment, in that there was a triable issue as to causation, that is, whether, but for Paul, Hastings’s legal malpractice in drafting the section 998 offer, BBC would have obtained a better result in its litigation with Roden. We disagree.
A trial court must grant a motion for summary judgment if all the admissible evidence submitted by the parties in their papers demonstrates “that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) The court must consider all of the evidence and the reasonable inferences therefrom, viewing the evidence and inferences “in the light most favorable to the opposing party.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Where the defendant is the moving party, “all that the defendant need do is to show that the plaintiff cannot establish at least one element of the cause of action” (id. at p. 853), but the defendant is not required to prove conclusively such fact to the satisfaction of the court (id. at p. 850, fn. 11). Then the burden shifts to the plaintiff to “set forth the specific facts showing that a triable issue of material fact exists” (Code Civ. Proc., § 437c, subd. (p)(2)) as to the element. “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, at p. 850.)
We review a trial court’s grant of a summary judgment motion de novo. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) We independently examine the record to determine whether the statutory conditions have been met and thus, summary judgment has been properly granted. (Mammoth Mountain Ski Area v. Graham (2006) 135 Cal.App.4th 1367, 1371.) We construe the prevailing party’s papers strictly and the losing party’s papers liberally, resolving evidentiary ambiguities or doubts in favor of the losing party. (Saelzler, supra, at p. 768.) We accept as true the facts supported by the losing party’s evidence and the reasonable inferences from them. (Sada v. Robert F. Kennedy Medical Center (1997) 56 Cal.App.4th 138, 148.)
BBC contends the trial court erred in ruling that BBC failed to show causation required to sustain a cause of action for legal malpractice. As we explained in Charnay v. Cobert (2006) 145 Cal.App.4th 170, “[t]o 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.’ [Citation.] To show damages proximately caused by the breach, the plaintiff must allege facts establishing that, ‘but for the alleged malpractice, it is more likely than not the plaintiff would have obtained a more favorable result.’ [Citations.]” (Id. at p. 179.) The plaintiff meets this burden by showing that it would have either settled on more favorable terms or obtained a better result at trial. (See, e.g., Marchak v. Ballesteros (1999) 72 Cal.App.4th 1514, 1519.)
BBC contends that, contrary to Paul, Hastings’s assertions, the Roden trial court and the Fourth District Court of Appeal did not rule on the interpretation of the Employment Agreement, but rather, their rulings were limited to specific matters in the judgment. Therefore, according to BBC, their statements indicating that Roden’s rights under the Employment Agreement are no more favorable to BBC than his rights under the section 998 offer are not controlling. We disagree.
The record shows that the trial court interpreted the Employment Agreement rolling term provision applicable to termination of Roden without cause as consistent with the “continuation of benefits” provision in the section 998 offer. Under the heading “General Findings” in the judgment, the trial court stated the following: [¶] “A. The Employment Contract... was effective on October 15, 1995. With each month of service, the original three-year term was extended for one additional month. This provision has the effect of keeping a three-year remaining balance on the term at any given date until notice is given by either party that the extensions are to cease. The termination of Roden had the effect of such notice. At the date of his termination on November 3, 1999, the contract term extended to November 30, 2002. [¶] B. The ‘continuation of the benefits’ under the various benefits and programs provided in Sections 5(d), (e) and (i) of the Employment Contract, set forth in ¶2 of the Judgment, had and has the effect of treating Roden as if he continued as an executive employee of [BBC] for the balance of his contract term with respect to those benefits. [¶] C. The $5,000,000 payment under ¶1 of the Judgment did not include any of the benefits called for in ¶2 of the Judgment.”
Although the trial court did not reference a specific section of the Employment Agreement corresponding to this finding, review of the agreement reveals that it was section 2 of the Agreement. Section 2 of the Employment Agreement states: “Effective Date and Term. The effective date of this Agreement (‘Effective Date’) shall be October 16, 1995. Unless sooner terminated as provided herein, the Company shall employ the Executive for a three (3) year term commencing on the Effective Date and expiring October 15, 1998, extended in the manner set forth in the next sentence (the ‘term of this Agreement’). The term of this Agreement shall automatically be extended for an additional one month period upon the completion of each one-month period of service provided by the Executive under this Agreement unless notice is given by either the Executive or the Company to the other, at least 30 days prior to the expiration of such one-month period, that such party does not wish to extend the term of this Agreement, in which case the term of this Agreement shall expire at the end of the last month through which this Agreement had previously been extended. The date upon which this Agreement terminates in accordance with this Section 2 shall be referred to herein as the ‘Expiration Date’.”
The trial court ruled that specific benefits would continue through November 30, 2002, the date through which the term of the agreement would extend pursuant to the court’s interpretation of section 2 of the Employment Agreement. The content of the court’s findings as to specific benefits indicates that the trial court interpreted section 5(d), (e) and (i) of the Employment Agreement. The trial court expressly found that the SERP was one of the specific benefits.
The judgment incorporates other specific benefits findings pertaining to the stock option plan, automobile benefits, health insurance coverage, the “Retired Officer Medical Plan,” long-term disability benefit, additional retirement benefits, travel benefits, personal excess liability insurance on Roden’s property, tax preparation and financial planning services, home alarm system, and other benefits under section 5(d), (e) and (i) of the Employment Agreement that become available during the remaining term of the contract.
The result of BBC’s appeal from the trial court’s order implementing the judgment was Roden I. BBC argues that Roden I has no bearing on the interpretation of the Employment Agreement, but rather pertains only to one issue of interpretation of the judgment. As BBC points out, the Roden I court wrote that “[BBC] requests this court to resolve... just one issue...: Does the lump sum payment required by the judgment include an amount for retirement benefits, or are continuing retirement benefits to be provided to [Roden] under the judgment provision requiring [BBC] to continue employment benefits?” (Roden I, supra, 107 Cal.App.4th at p. 623.) The court held that the lump sum payment required in paragraph 1 of the judgment did not include an amount for the benefits and, thus, paragraph 1 did not resolve BBC’s liability with respect to Roden’s retirement benefits. (Ibid.)
As the Roden I court expressed more specifically subsequently in its opinion, “[t]he only issue on appeal is whether benefits payable under [BBC’s] supplemental executive retirement plan (SERP) were reduced to present value and incorporated into the $5 million lump sum payment under paragraph 1 of the judgment, as [BBC] contends, or whether Roden was to have continued SERP participation pursuant to paragraph 2 of the judgment, as Roden contends.” (Roden I, supra, 107 Cal.App.4th at p. 625.)
In reaching its conclusion, however, the Roden I court looked to the Employment Agreement to ascertain the parties’ intent with respect to the judgment incorporating the section 998 offer. (Roden I, supra, 107 Cal.App.4th at p. 625.) The court then summarized the provisions referenced in the judgment as follows: “Subsections 5(d), (e) and (i) of the employment agreement provide as follows: ‘(d) Employee Benefit Programs. The Executive shall be entitled to participate in all employee health and benefit programs of the Company from time to time in effect for senior executives of the Company..., including, but not limited to, health, life, disability and dental insurance and retirement plan benefit programs, subject to a determination of Executive’s eligibility under the terms of said plans and otherwise in accordance with their respective terms. [¶] (e) Automobile Allowance. The Company shall elect to provide to the Executive (1) a minimum automobile allowance of $800.00 per month,... or (2), in lieu of an automobile allowance, an automobile which will be owned by the Company.... [¶]... [¶] (i) Other. The Executive shall be entitled to receive and/or participate in all other benefits and programs made available, from time to time, to other senior executives of the Company....’” (Id. at pp. 625-626.) Based upon the clear language of the Employment Agreement, the Roden I court concluded: “Subsection 5(d) thereof specifically provides that Roden may participate in the company retirement plan benefit programs, and [BBC] does not dispute that the benefit at issue is a retirement plan benefit. Inasmuch as paragraph 2 of the judgment requires the continuation of subsection 5(d) benefits, and subsection 5(d) addresses retirement benefits, the resolution of retirement benefits is covered by paragraph 2 of the judgment, not paragraph 1.” (Id. at p. 626.)
The Roden I court also reviewed prior related trial court proceedings and orders regarding the judgment. Concerning the trial court’s order in implementation of judgment, the Roden I court stated: “In its formal order, the court found that, the way the employment agreement was written, once notice was given that Roden was terminated, his contract nonetheless continued for three years from that point. In other words, irrespective of whether [BBC] chose to continue receiving Roden’s services, he was treated as if he continued as an executive employee. Thus, he remained eligible for benefits under subsections 5(d), (e) and (i). The court also found that the $5 million lump sum payment required under paragraph 1 of the judgment did not include any of the continued SERP benefits.... [¶] We cannot say the court erred in its interpretation. The plain language of the judgment and the employment agreement support the postjudgment order.” (Roden I, supra, 107 Cal.App.4th at p. 633.) In sum, whether BBC expressly asked the Roden court to rule on whether paragraph 2 of the judgment gave Roden more than he would have been entitled to under his Employment Agreement, the Roden I court, just as the trial court, construed portions of the Employment Agreement relevant to the instant case.
In Roden III, the appellate court again considered the interpretation of the judgment and, in doing so, the interpretation of the Employment Agreement, for purposes of determining the availability of CIC benefits. The court quoted the statement in Roden I that “‘[i]n this case, it is not possible to ascertain the intent without looking outside of the settlement contract, to the employment agreement referenced therein.’” (Roden III, supra, 155 Cal.App.4th at p. 1562.) The Roden III court reached essentially the same interpretation as the Roden I court. First, it quoted from Roden I, that the court’s conclusion that “‘[t]he language of the employment agreement is clear. Subsection 5(d) thereof specifically provides that Roden may participate in the company retirement plan benefit programs, and [BBC] does not dispute that the benefit at issue is a retirement plan benefit.’” (Ibid.) Just as the Roden I court, the Roden III court concluded that “[t]he language of the employment agreement is also clear that Roden was employed for a rolling three-year term, such that his employment would continue for three years following receipt of a notice of termination. Therefore, Roden was entitled to participate in the SERP, as though he were still employed by [BBC], for an additional three years after he received that notice [of termination without cause].” (Ibid.)
Despite BBC’s contention that the trial court rulings and the related appellate opinions in Roden I and Roden III pertain only to interpretation of the judgment, it does not matter whether the court interpreted the Employment Agreement to enforce the Employment Agreement or to enforce the Judgment. The point is the courts interpreted it sufficiently to support the conclusion that BBC could not show that it would have received a more favorable settlement with Roden or result at trial, but for the section 998 offer.
Whether the Roden I court did or did not rule on the trial court’s interpretation of the Employment Agreement set forth in its findings, the interpretation has become binding on BBC by operation of law. As BBC reminds us, the only issue before the Roden I court was whether the SERP benefits were included in the $5 million lump sum in paragraph 1 of the judgment. In the Roden I appeal, BBC did not challenge the trial court’s interpretation of the Employment Agreement which was a part of the trial court’s order. As the Roden I court acknowledged, “[A] formal court order interpreting that judgment was entered. That order contained findings and a detailed interpretation of the judgment that the parties had not received previously. Moreover, the order itself stated it was ‘a final Order as to the matters resolved above, and thus an appealable Order on the date entered.’ In ascertaining whether a decree is final and appealable, the substance and effect of the adjudication is determinative. [Citation.] The formal order constituted the final adjudication as to the terms of the judgment addressed therein....” (Roden I, supra, 107 Cal.App.4th at p. 631, fn. 4.) The Roden III court recognized and confirmed the Roden I court’s interpretation of the Employment Agreement and the judgment. (Roden III, supra, 155 Cal.App.4th at p. 1562.) The time has long passed for BBC to appeal the trial court’s interpretation. (Cal. Rules of Court, rule 8.104(b).) The issues determined by the order are res judicata. (In re Matthew C. (1993) 6 Cal.4th 386, 393.)
BBC advances various scenarios regarding what might have happened, but for the section 998 offer. BBC asserts that it would have fared much better absent the section 998 offer because Roden did not request “a SERP CIC benefit” during settlement negotiations prior to the section 998 offer and BBC would not have been required to pay him a CIC benefit if the case had been tried. “Unless a party suffers damage, i.e., appreciable and actual harm, as a consequence of his attorney’s negligence, he cannot establish a cause of action for malpractice. Breach of duty causing only speculative harm is insufficient to create such a cause of action. [Citation.]” (Thompson v. Halvonik (1995) 36 Cal.App.4th 657, 661.) So also is the showing of a “‘mere possibility or even probability that damage will result from wrongful conduct....’ [Citation.]” (Id. at p. 662.) The scenarios may invite one to draw a conclusion that there was a possibility or probability that BBC could have obtained a more favorable settlement or result at trial, but for the section 998 offer, but that is insufficient to meet the causation requirement. (Id. at pp. 661-662; cf. Charnay v. Cobert, supra, 145 Cal.App.4th at pp. 179-180 [determining whether an allegation is “speculative” has been recognized as proper at the summary judgment stage, although on demurrer, such a determination would be premature].)
We also note that, in the separate statement of undisputed facts for the summary judgment motion, BBC admitted that it was not and is “not certain whether the dispute [with Roden] could have been resolved or for how much” and that “it was impossible to predict what Mr. Roden would have garnered in a trial of all his claims.”
Furthermore, the record includes sworn statements from Roden that he would not have accepted a section 998 offer in the absence of the continuation of retirement benefits. Based upon the foregoing analysis, we conclude that BBC cannot show with sufficient certainty that, but for the section 998 offer, it would have obtained a more favorable result (Marshak v. Ballesteros, supra, 72 Cal.App.4th at p. 1519; Thompson v. Halvonik, supra, 36 Cal.App.4th at p. 663) and, thus, cannot show causation necessary to maintain a cause of action for legal malpractice (Charnay v. Cobert, supra, 145 Cal.App.4th at p. 179). Therefore, there is no triable issue of material fact and Paul, Hastings is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853.)
DISPOSITION
The judgment is affirmed. Defendant shall be entitled to its costs on appeal.
We concur: WOODS, Acting P. J., ZELON, J.