## Facts

- Elena Starr, an elderly, semiliterate property owner, had relied on attorney Carl J. Mooslin for legal matters for about ten years.
- Starr decided to sell her Los Angeles property for $60,000: $10,000 cash at close of escrow and a $50,000 promissory note secured by a purchase-money deed of trust.
- The transaction contemplated subordination of Starr’s deed of trust to later construction financing up to $275,000, with anticipated staged advances beginning at $30,000, and with additional security to be provided by the buyer on other property.
- Mooslin attended the escrow opening, verified terms with those present, and dictated escrow instructions using a printed form.
- Starr later claimed Mooslin failed to protect her security interest by not requiring provisions limiting any senior financing to sums actually used to improve the property and by relying on assumed escrow customs instead of drafting explicit protections.
- The buyer used the subordination arrangement to obtain a $30,000 loan from unrelated creditors secured by a deed of trust that took priority over Starr’s lien, then defaulted.
- The senior creditors foreclosed, impairing Starr’s ability to collect the sale price; she recovered only a fraction of what she expected.
- A jury awarded Starr $42,000 for legal malpractice; the trial court entered judgment and denied Mooslin’s motion for judgment notwithstanding the verdict (JNOV).

## Issues

1. Whether substantial evidence supported a finding that the attorney breached the standard of care in drafting and structuring a subordinated real-estate sale transaction.
2. Whether the attorney’s negligence was a proximate cause of the client’s loss, including whether causation could be treated as a question of law when reasonable persons would not dispute it.
3. Whether JNOV was improper because substantial evidence supported the verdict.

## Decision

- The Court of Appeal affirmed the judgment and the order denying JNOV.
- The evidence, including expert testimony, was sufficient to support the jury’s finding that Mooslin was negligent in handling the subordination transaction.
- The causal link between the defective subordination protections and Starr’s loss was sufficiently clear that causation could be treated as established on the record.

## Legal Principles

- An attorney handling a complex real-estate transaction involving subordination must exercise the reasonable skill and care ordinarily possessed and used by attorneys in similar circumstances, including researching subordination effects and drafting protective terms to safeguard the client’s security.
- Failure to include commonly recognized protective provisions in a subordination arrangement can constitute actionable negligence when it exposes the client’s lien position to avoidable priming and foreclosure risk.
- Where reasonable persons will not dispute causation, a court may take the causation question from the jury and treat it as a matter of law.
- JNOV is improper where substantial evidence supports the verdict on negligence and causation.

## Conclusion

The court sustained a malpractice verdict against a seller’s attorney who structured a subordinated sale without drafting protections that would have prevented senior financing unrelated to improving the property from wiping out the client’s security, and it reaffirmed that causation may be decided as a matter of law when the causal connection is not reasonably disputable.


Starr v. Mooslin, 14 Cal. App. 3d 988 (Cal. Ct. App. 1971)