Monday, December 30, 2013

Not So Clear Sailing ...

Ruiz v. California State Automobile Association Inter-Insurance Bureau, No. A136275 (D1d4 Dec. 20, 2013)

This case a must-read for anyone who drafts class action settlement documents. The court of appeal holds that a so-called “clear sailing” attorneys’ fees clause in a class action settlement agreement does not implicitly waive the class counsel’s right to appeal the trial court’s fee award.

Friday, December 27, 2013

Apparently Fax Cover Sheets Have an Actual Purpose

Fry v. Superior Court, No. B248923 (Dec. 19, 2013) 

Division One of the Second District holds that faxing a form affidavit to the trial court's general fax filing number is insufficient to make a peremptory strike under Code of Civil Procedure § 170.6.

Friday, December 20, 2013

Dicta Didn't Dictate that Court Couldn't Say It Was Too Late to Arbitrate

Hong v. CJ CGV America Holdings, Inc., No B246945 (D2d5 Dec. 18, 2013)

In an appeal of the denial of a motion to compel arbitration, the court holds that under the Federal Arbitration Act, the issue of whether a party waived arbitration by substantially participating in litigation is an issue for the court, not the arbitrator.  

Too Late to the Collections Party to Strike the Judge

National Financial Lending, LLC v. Superior Court, No. D064226 (D4d1 as modified, Dec. 18, 2013)

Q: Can a third-party debtor from whom a judgment creditor tries to collect during post-judgment collections proceedings strike the judge under Code of Civil Procedure § 170.6. 

A: No.

The Appeal Clock Runs from a Voluntary Dismissal

Dattani v. Lee, No. A13852 (D1d3, as modified Jan 14, 2013)

After the trial court granted summary adjudication in favor of defendant, plaintiffs filed a notice of voluntary dismissal of the remainder of their claims without prejudice. Almost six months later, the court signed a proposed defense judgment prepared by plaintiffs’ counsel. Plaintiffs filed a notice of appeal three weeks later. The court of appeal dismisses the appeal as untimely. An appeal of the summary adjudication was not barred by the subsequent voluntary dismissal, because, unlike in the recent Kurwa v. Kislinger, 57 Cal. 4th 1097 (2013), the appeal was not rendered unripe by an agreement to toll the statute of limitations. But when combined with the summary adjudication order, plaintiffs’ voluntary dismissal of the remainder of their claims ended the case and was effective as a final appealable judgment as soon as the dismissal was submitted to the court.  Since the notice of appeal was filed more than 180 days after the dismissal, the appeal was untimely under Rule of Court 8.104(a)(1)(C).

Appeal dismissed.

Civil Code § 1714.10 Is Not a Shield in Attorney-Client Disputes

Stueve v. Berger Kahn, No. G046253 (D4d3 Dec. 18, 2013)

This case concerns an alleged Ponzi scheme set up by some lawyers to skim off the assets of the heirs to the Alta Dena Dairy fortune. The trial court granted defendants’ motion under Civil Code § 1714.10 to strike the conspiracy allegations from the complaint. The court of appeal reversed. According to the court, § 1714.10 “was enacted to combat the use of frivolous conspiracy claims that were brought as a tactical ploy against attorneys and their clients and that were designed to disrupt the attorney-client relationship.” (internal quotes omitted). It “performs a ‘gatekeeping’ function and requires a plaintiff to establish a reasonable probability of prevailing before he or she may pursue a ‘cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute.”
It works much like the anti-SLAPP statute. But the statute, by its own terms, is limited to when the attorney’s services are related to settling or litigating a “claim or dispute.” Because the alleged conspiracy here was based on the defendants ripping off their clients (the plaintiffs) through fraudulent estate planning, there was no claim or dispute, so the statute did not apply. That the defendants' conspiracy also included some of their other clients does not change the result.


The Superior Court Can't Play Lucy to the Regents' Charlie Brown

Regents of the University of California v. Superior Court, No. A138136 (D1d2, as modified Jan 14, 2013)

On the merits, the court of appeal holds that records of private venture capital funds in which the Regents invested some pension funds do not fall within the Public Records Act. But it also resolves a procedural issue. In the course of the  litigation, the Regents provisionally lodged some records under seal pursuant to Rule of Court 2.551(b)(4), pending a ruling on an application to seal them. The Regents' counsel made clear during argument that if the court declined to seal the records, the Regents wanted them returned under Rule of Court 2.551(b)(6). The superior court did not rule on the sealing application right away. When it ultimately ruled on the merits, however, it also ruled that the Regents were judicially estopped from requesting the return of their documents because they submitted them for the court to consider on the merits of the PRA request. 

In this the trial court erred. Judicial estoppel did not apply because the Regents never took an inconsistent position—they consistently claimed that the records were not public and that they wanted them returned without filing if the court would not seal them. The trial court had two options under the Rule: Order the records sealed or deny the application return the records under Rule 2.551(b)(6). If it took the latter tack it could not consider the returned records in addressing the merits. Of course, a trial court is free to delay its ruling on sealing, and there are often good reasons to do so. But there's a catch. The trial court might consider the provisionally lodged materials in ruling on the merits and also decide that the did not meet the standard for sealing. If that happens, and if the submitting party won't consent to the materials' public filing, the court will need to go back and reevaluate the merits without the provisionally sealed material. That, however, is the risk a trial court bears when it delays ruling on sealing.

Writ granted.

Why Write Fifty Pages but Decline to Publish?

Asahi Kasei Pharma Corp. v. Actelion Ltd., No. A133927 (D1d5, as modifed Jan. 16, 2013)

This is a very long and detailed opinion that is well worth reading if you litigate business torts. It addresses, among other things: instructional sanctions for failure to timely produce discovery; what to do when an expert relies on materials that are not produced because he is no longer able to obtain them; the requirement that hearsay evidence submitted for non-hearsay must be relevant as to those specific issues; hearsay exceptions for the effect on the listener, lay opinion in issues of law; and the sufficiency of the evidence on several damages issues. Unfortunately, the discussion on all of these issues (more than 50 pages of it) is contained in sections of the opinion that the court declines to publish. The only published section affirms
the trial court—in a cogent discussion that comprehensively reviews the case law—on some instructional issues regarding the elements of intentional interference with contract, the Applied Equipment rule that a defendant can’t interfere with its own contract, and the justification defense.


Postscript: On a publication request by a nonparty under Rule of Court 8.1120, the court published two subsections on the sufficiency of the evidence of lost profits. The rest of the opinion, however, remains unpublished.

Thursday, December 19, 2013

A Few Choice Words on the Standard of Review

Gaines v. Fidelity National Title Insurance Company, No. B244961 (D2d8 Dec. 12, 2013)

A divided panel upholds a trial court’s dismissal of most of the defendants in an action for failing to bring the case to trial within five years, but reverses as to one defendant who was added later in the case.

Wednesday, December 18, 2013

Text vs. Purpose in the Anti-SLAPP Regime
(We'll Need More than a Weatherman....)

Hunter v. CBS Broadcasting, No. B244832 (D2d7 Dec. 11, 2013)

The court of appeal holds that a TV station’s selection of its weather anchor is conduct in furtherance of its right to free speech in connection with an issue of public interest and thus that a discrimination complaint challenging its selection arises from protected activity under the anti-SLAPP statute.

Tuesday, December 10, 2013

Four for Four on Class Cert.

Williams v. Superior Court, No. B382577 (D2d8, as modified, Dec. 24, 2013)

For the fourth time in two months, the court of appeal reverses an order denying class certification in a wage and hour case where the plaintiff’s theory of liability was that the defendant maintained an unlawful overtime policy.

Thursday, December 5, 2013

Same Song. Different Band.

Martinez v. Joe’s Crab Shack Holdings, No. B242807 (D2d7 Dec. 4, 2013)

This is yet another reversal of a denial of class certification in a wage-and-hour class action. As in the October decision in the Benton case, which was decided by the same division and is cited in the opinion, as well as last week’s Jones case, the court here holds that the class cert decision is governed by the California Supreme Court’s decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), which the court reads as encouraging the use of the class action vehicle in wage and hour disputes. Under Brinker, when deciding whether common issues predominate so as to merit class treatment, the court must direct its inquiry to the plaintiff’s theory of liability and not to idiosyncratic concerns often raised by defendants, which generally go only to individualized damages. Plaintiff’s theory here is that Joe’s Crab Shack had a policy of classifying assistant managers as exempt executive employees, even though the bulk of their duties had all the indicia of non-exempt work. Because that is the kind of question that can be decided on a class-wide basis, the trial court erred in declining to certify a class. That said, the court also suggests that the class maybe shouldn’t be as broad as the one plaintiff defined because the definition included some more senior managers who have more concrete management responsibilities. But the trial court could deal with that on remand.

Reversed and remanded.

Tuesday, December 3, 2013

Plaintiffs' Wage & Hour Play: Stick with the Policy

Jones v. Farmers Insurance Exchange, No. B237765 (D2d3 Nov. 26, 2013)

Finding that the plaintiff’s wage and hour case implicated a class-wide policy, the court of appeal reverses a trial court’s denial of class certification.

Sanctions Never Seem to Stick, the Sequel

Optimal Markets v. Salant, No. H038571 (D6 Nov. 26, 2013)

The Sixth District holds that Code of Civil Procedure § 128.7 does not authorize sanctions against an attorney who substituted into a case and frivolously prosecuted it after it was sent to arbitration.

Monday, December 2, 2013

Judicial Restraint

Kurz v. Syrus Systems, Inc., No. H038694 (D6 Nov. 22, 2013)

District Six interprets a provision in the Unemployment Insurance Code to bar the use of an unemployment insurance appeal judgment as evidence in a later case for malicious prosecution. Without that evidence the party bringing the claim could not establish that the appeal had been terminated in its favor. Because that party could not show a likelihood of success, the court holds that a SLAPP motion attacking the claim should have been granted.

A Good Statement of the Standard for Pleading Fraud

Moncada v. West Coast Quartz Corp., No. H03728 (D6 Nov. 22, 2013)

This is a fact-intense 2-1 opinion that reverses a trial court’s order granting of a demurrer on a number of causes of action. There’s not much of procedural interest, although the opinion does provide a particularly clear sound bite on the heightened pleading requirement for fraud: “Every element of a fraud cause of action must be specifically pleaded. This pleading requirement of specificity applies not only to the alleged misrepresentation, but also to the elements of causation and damage.” (citations omitted). That’s a good quotable that will likely work its way into many a demurrer brief.

Sanctions Just Never Seem to Stick

In re Marriage of Bianco, No. D062061 (D4d1 Nov. 22, 2013)

An attorney drew a $43,000 sanction from the trial court for hiring a suspended attorney as her co-counsel in a divorce case. That violated California Rule of Professional Conduct 1-300(A). The trial court purported to issue the sanction under California Rule of Court 2.30(b). But that rule permits sanctions only for violation of the Rules of Court (and not the rules of Professional Conduct) and only to certain kinds of cases, which do not include family law proceedings. Since Rule 2.30 did not authorize the sanction, it was improperly levied.