Trustees of Capital Wholesale Electric Co. Profit Sharing & Trust Fund v. Shearson Lehman Bros.

Plaintiffs, trustees of the Capital Wholesale Electric Company Profit Sharing and Trust Fund (the Trustees), appeal from a judgment dismissing their complaint against Shearson Lehman Brothers, Inc. (Shear-son) after the trial court sustained Shearson’s demurrer without leave to amend. The Trustees contend the trial court erred in sustaining the demurrer without leave to amend. We affirm.

Factual and Procedural Background

This case arises out of a securities account the Trustees opened with Shearson’s predecessor in interest, Lehman Brothers Kuhn Loeb, Inc., in 1979. After funds in that account were invested in option securities and lost, the Trustees brought an action in 1982 against Shearson for breach of fiduciary duty; the suit was entitled Elmore Duffy, Frank Ghilarducci, Walter Chokan, Trustees of the Capital Wholesale Electric Company Profit Sharing and Trust Fund v. King Cavalier, Lehman Brothers, Kuhn, Loeb, Inc., and Does 1 through 50 (the Duffy litigation). The Duffy litigation was tried before a jury, which returned a verdict in favor of the plaintiffs. The judgment was affirmed on appeal in Duffy v. Cavalier (1989) 210 Cal.App.3d 1514 [ 259 Cal.Rptr. 162 ].…