Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005)

Citation: 131 Cal.App.4th 802, 32 Cal.Rptr.3d 325. Court: California Court of Appeal, Sixth District. Decided: July 29, 2005; modified August 25, 2005. Opinion: McAdams, J.

Source note (2026-10-18):

• Links on this page to https://static.case.law/cal-app-4th/131/cases/0802-01.json are an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.

Facts

Pluris assigned its assets, including cash, tangible property and intellectual property, to Sherwood for creditors’ benefit. A major creditor disputed the assignee’s administration and sought to sue both the assignee and its counsel for a conspiracy to deplete the assets through excessive legal fees. The appeal concerned permission to assert those attorney-conspiracy claims. The allegations were not adjudicated facts. Full opinion, pp. 808–813.

Holding

The court reversed the order allowing the proposed pleading. Assignee’s counsel did not owe the adverse creditor an independent duty merely through representing the assignee. Alleged excessive compensation for actual professional services was not, without more, the separate financial gain required by the statutory exception to Civil Code § 1714.10’s pleading gate. Full opinion, pp. 825–834.

Reasoning

The creditor’s claims depended on attorney-client conspiracy allegations and did not plead the independent duty, fraud or separate economic advantage necessary to escape the statutory restriction. The opinion discusses the common-law ABC and distinguishes it from bankruptcy’s controls on professional appointments and compensation. Its discussion does not transform an ABC into a court-confirmed bankruptcy sale. Full opinion, pp. 825–834 and footnote 13.

Practical impact

This is an ABC administration and counsel-liability decision, not authority that an assignee can convey free of every security interest. The security/asset disputes in its facts were not universally resolved by the attorney-pleading holding. A buyer still needs transaction-specific conveyance authority and lien treatment. Full opinion.

Good-law status

The retrieved reporter text incorporates the August 25 modification and records denial of review November 2, 2005. No reversal was located in this review; the label is not an exhaustive citator certification. This opinion does not resolve the separate § 1800 preemption disagreement between sherwood-partners-v-lycos-2005 and haberbush-v-cummins-family-partnership-2006.

Source provenance

The complete reporter opinion and footnotes were retrieved October 17, 2026 from the Caselaw Access Project URL above, an unofficial reproduction of a judicial primary text. The opinion’s header, disposition and modified footnotes govern; a summary of the original unmodified slip opinion is not substituted. Review details: schema/verification/california-independent-review-2026-10-17.md.

Applies in →

california · assignment-for-the-benefit-of-creditors · businesses-and-going-concerns

Legal information, not legal advice. This page summarizes a retrieved decision and does not certify current treatment of every issue.