Kutak Rock congratulates Steven Dailey and Jeff Gerardo on receiving the 2023 California Lawyer of the Year (CLAY) Award in the category of Finance/Tort Law for their successful representation of client Wells Fargo Bank in Sheen v. Wells Fargo Bank N.A.. The California Supreme Court agreed with Dailey and Gerardo in this opinion that is expected to significantly impact the real estate loan servicing industry. 

The case involved mortgage servicing litigation. The borrower tried to assert a negligence cause of action. Because there was a split of authority between Courts of Appeal in the State on whether such was permissible under California law, the matter was taken through the Court of Appeals and advanced to the California Supreme Court, which found in Wells Fargo’s favor.

The Daily Journal recognized the Kutak Rock legal team along with Benjamin J. Horwich, Rachel G. Miller-Ziegler, and David Fry of Munger, Tolles & Olson LLP for their successful efforts in arguing that, under the economic loss doctrine for contracts, there is no recovery under a negligence cause of action for financial harm unaccompanied by physical or property damage. If the lender does not step beyond its customary role, it does not owe a duty of care to the borrower so as to support a negligence cause of action.

The Supreme Court’s then-Chief Justice Tani G. Cantil-Sakauye stated in the opinion, “This case will be cited frequently because it goes beyond the context presented to resolve questions about California negligence law.”

The CLAY Awards acknowledge California lawyers “for achievements with a significant impact on public policy, the law, the profession, or a particular practice area.” CLAY Awards are regarded as among the most prestigious granted annually for practicing attorneys in California.

Steven M. Dailey is a member of the Financial Services Litigation Practice Group. His principal practice involves prosecuting and defending cases brought by and against residential mortgage lenders, including indemnification/repurchase, wrongful foreclosure, title defects, loan origination fraud and various other real property-related litigation. 

Jeff S. Gerardo is the Managing Partner of the firm’s California Regional offices in Los Angeles and Irvine and is a member of the firm's Executive Committee. As a member of the firm’s Commercial Litigation Department, Jeff handles complex litigation matters for diverse clientele, including major financial institutions, mortgage companies, product manufacturers, small businesses, municipalities, insurance companies, global technology corporations and a national health club. He has extensive trial, arbitration and mediation experience.