SAN FRANCISCO — The California First District Court of Appeal recently decided to uphold two Alameda County Superior Court summary judgments in favor of defendants in Loanvest I LLC vs. Paul F. Utrecht, et al.

In its April 17 decision, the appeals court said the superior court ruled summary judgments in favor of Utrecht and Wendel, Rosen, Black & Dean LLP.

According to the appeals court decision, Loanvest sued Utrecht and accused him of malpractice "for allegedly disregarding the interests of Loanvest in order to protect the interests of the person who formerly controlled Loanvest in an action that [James] Madow himself brought against Loanvest and its former manager." 

The appeals court said "Utrecht defended Loanvest in resisting Madow’s attempt to prevent Loanvest from paying legal fees to Wendel Rosen, which represented the former manager in the prior litigation, and to Utrecht." Loanvest was after fees that Loanvest said Wendel, Rosen, Black & Dean LLP "knew it had no right to receive from Loanvest."

The appeals court cited the superior court's decision, saying that the superior court ruled that summary judgment would benefit Utrecht.

"The undisputed facts show that Loanvest’s claim against Utrecht is barred by the underlying settlement and South Bay had authority to release Utrecht," the appeals court said. "Further, the undisputed facts establish that defendant Utrecht did not breach any duty (loyalty or otherwise) to Loanvest and met the standard of care in the representation. Lastly, the undisputed facts show that causation cannot be established in that defendant did not cause plaintiff to suffer non-speculative damages."

The appeals court cited the superior court's decision, saying that the superior court ruled the summary judgment benefiting Wendel, Rosen, Black & Dean LLP, based on many factors. 

"The unjust enrichment and conversion claims fail in that payment for services rendered was lawful and just," the appeals court said in its opinion. "Moreover, none of the complained conduct can be construed as wrongful or unjust so as to support the asserted claims—and even if construed as such they were covered by the litigation privilege."

The appeals court upheld the superior court's decision that benefited Utrecht because it reasoned that the superior court correctly identified South Bay as Loanvest's manager when the company settled with Utrecht on on May 3, 2016." 

"While Madow may not have anticipated that South Bay would enter such an agreement during the five-day period following entry of the May 1 settlement, the terms of the settlement did not preclude South Bay from doing so," the appeals court said in its ruling. "The entry of such an agreement is within the authority of the manager of a limited liability company, and no attempt has been made to set aside the May 3 settlement agreement and release."

The appeals court upheld the superior court's decision that benefited Wendel, Rosen, Black & Dean LLP, holding that "since South Bay was conclusively determined to have been the manager of Loanvest during the period in question, it follows that there was the necessary consent to the payment of Wendel Rosen’s legal fees, undermining the cause of action for conversion."

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