Wednesday, July 23, 2014

See, the System Works ...

Every once in a while, it’s nice to see confirmation that you’re right. As I noted in my write up of the Ottovich case, the opinion seemed to be inconsistent with the very recently decided Paramount Petroleum case. Paramount Petroleum holds that under Code of Civil Procedure § 437c(f), a plaintiff can’t get summary adjudication on liability when the amount of damages is still in dispute. In Ottovich, the trial court did just that. Mr. Ottovich moved for rehearing on exactly that ground, citing Paramount Petroleum, which the court addresses here. Unfortunately, he didn’t raise the point in his trial court or appellate briefing, so the point was forfeited on appeal.

Sanctions Stuck, this Time

Peake v. Underwood, No. D061267 (D4d1 July 17, 2014)

In the published part of this opinion, the court affirms an order granting terminating sanctions and awarding attorney’s fees because plaintiff and her attorney for maintained a frivolous case. Not too much new here, although the case provides a useful overview of the various legal standards that go into a Code of Civil Procedure § 128.7 motion. The court is very deferential to the trial court’s findings that the case lacked legal or factual merit. (I must say, on more than one occasion, I’ve seen summary judgment motions denied based on much weaker factual showings than plaintiff’s here.) 

One interesting point: As required by § 128.7(c)(1), the defendant served plaintiff with the motion twenty-one days before it was filed. Instead of withdrawing the challenged claims to avoid a sanction, the plaintiff added a few more. When the court ruled, it dismissed as frivolous the claims addressed in the original motion as well as the new claims. It did not require the defendant to serve a new motion addressing the new claims too and afford the plaintiff another safe harbor period. Although the court recognizes that “the statutory language does appear to support the need for an additional safe harbor period after an amended pleading is filed,” it nonetheless affirms. Because the new claims were “flawed for the same essential reason” as the original ones, an additional safe harbor would have been futile.


Stealing from Clients Is Not Professional Services

Lee v. Hanley, No. G048501 (D4d3 as modified,* August 8, 2014)

When you sue your attorney for refusing to return unused fees, what statute of limitations applies?  Is it the one-year limit in § 340.6, which applies to actions against attorneys alleging “a wrongful act or omission, other than for actual fraud, arising in the performance of professional services?” Or is it the longer periods that would ordinarily apply to claims for torts or breach of contract? The court notes a deep split in authority surrounding § 340.6, including several  recent cases

There are two broad approaches. One—bolstered by the legislative history, and general fairness—holds that § 340.6 applies to malpractice cases, not to garden variety torts committed in the course of practicing law. The other—taking a more literal reading—applies the statute broadly, to any claim, in tort or contract, arising from acts an attorney performs in his professional capacity, except for fraud.

The court here hedges a little, although it appears to adopt the second take. But it then nonetheless holds that § 340.6 does not necessarily apply. The court says “[i]f the wrongful act or omission at issue does not arise ‘in the performance of professional services,’ the statute is inapplicable.” Reading the complaint liberally, the facts suggest some theories that don’t implicate the attorney’s professional services. In particular, the court seems to think a conversion claim could steer clear of § 340.6. Of course, plaintiff didn’t plead conversion. Even so, she pleaded facts sufficient to allege it. And since demurrers attack facts and not labels, that is enough to for plaintiff to win a reversal in this appeal.


*On the parties petitions for rehearing, the court made some modifications that made the opinion a little less ambiguous. 

**Note: Given the split of authority, it is perhaps unsurprising that the Supreme Court granted review on October 1, 2014.

So ...

The ABA Journal puts out a Blawg 100. Their compliance program is too effective to permit me to self-nominate. (Or to have my firm’s marketing folks do it on my behalf.) But were you so inclined, I can tell you to go here.

Appreciate the support.

Wednesday, July 16, 2014

Reigning in Some Anti-SLAPP Madness

Ulkarim v. Westfield LLC, No. B247174 (July 14, 2014)

A commercial landlord brought and won an unlawful detainer proceeding to evict a tenant. Thereafter, tenant sued landlord for breach of contract and various and sundry torts arising from alleged breaches of the lease and wrongful eviction. Landlord filed an anti-SLAPP motion. Its theory was that the case arose from the service of the notice of termination for the UD case, which is protected activity under Code of Civil Procedure § 425.16(e). The trial court agreed but the court here reverses. 

As the court explains, “a tenant’s complaint against a landlord filed after the service of a notice of termination and the filing of a complaint for unlawful detainer does not arise from those particular activities if the gravamen of the tenant’s complaint challenges the decision to terminate the tenancy or other conduct in connection with the termination apart from the service of a notice of termination or filing of an unlawful detainer complaint.” The fact that the eviction process entails some court-related activity does not mean that a landlords decision to evict is protected petitioning under the First Amendment. The weight of the authority—exhaustively canvassed in the opinion—supports this proposition. To the extent that two cases can be read to suggest otherwise, they are wrong.


Monday, July 14, 2014

Supreme Court Aggressively Asserts Ambiguity in Pursuit of Proper Policy

City of L.A. v. County of Kern, No. S210150 (Cal. July 7, 2014)

Apropos of the recent hubbub in LA over what is and isnt a federal question, the California Supreme Court deals with a federal law issue that, practically speaking, only comes up in state court: How long does a plaintiff have to re-file its claims in state court when a federal court declines supplemental jurisdiction under 28 U.S.C. § 1367(c)? Noting a “deep and long-standing national divide” on the issue, the courtcontinuing its streak of short opinions by Justice Werdegarunanimously holds that 28 U.S.C. § 1367(d) does mean when it seems to say.

Friday, July 11, 2014


Singh v. Lipworth, No. C073177 (July 3, 2014)

Ouch! Plaintiff in this case got himself sanctioned and declared a vexatious litigant. (Note to those readers seeking to avoid the imposition of such status: Probably best to limit use of bold, underlined, all caps, especially when calling a prior order of the court “ROBBERY AND TERRORISM.”) Anyway, the court here finds that plaintiff forfeited his appeal because his brief “is a rambling and disjointed series of accusations, much of which was lifted word for word from pleadings filed by [plaintiff] in the trial court, and none of which can be considered ‘meaningful legal analysis supported by citations to authority and citations to facts in the record that support the claim of error.’” For good measure, it further sanctions plaintiff and his attorney (called out by name in the opinion) for bringing a frivolous appeal. In addition to $7,478.75 in defendant’s attorneys’ fees, plaintiff and lawyer are jointly and severally ordered to pay $7,500 to the clerk of court to compensate for the public resources wasted in processing the appeal.


Getting There the Long Way

DFEH v. Ottovich, No. A136607 (D1d4 June 30, 2014)

This case is an appeal of a damages award entered after the trial court struck the defendants answer as a discovery sanction. Interestingly, the propriatey of the sanction is not a contention on appeal.

In Control ...

Ayala v. Antelope Valley Newspapers, No. S206874 (Cal. June 30, 2014)

Yet again, a trial court gets reversed for denying cert in a wage and hour case. This time, the case involves newspaper delivery persons who claim to have been misclassified as independent contractors, which deprived them of overtime and other employee protections. The trial court focused on the degree of control the paper actually exerted over the workers performance of their duties. Based on the disparate results of its analysis—some were micromanaged while others left to their own devices—it found that common issues didn’t predominate so it declined to certify the class.

Thursday, July 3, 2014

Another Dumb Anti-SLAPP Appeal

Old Republic Const. Program Grp. v. The Boccardo Law Firm, Inc., No. H037989 (D6 June 27, 2014).

Defendants stipulated to keep some money in an escrow account pending the litigation of a dispute. When the litigation ended, without resolving the dispute, defendants took the money out of the escrow. Plaintiffs sued for, among other things, breach of the stipulation. Defendants responded with an anti-SLAPP motion. So the issue is: does a lawsuit for violating the stipulation by withdrawing the money from the escrow account arise from protected activity?

One thing is clear: entering the stipulation was clearly protected activity because it is a communicative act performed in a connection with a litigation. See Cal. Code Civ. Proc. § 425.16(e)(2). But that begs the question: Does the breach of contract case arise from the entry of the stipulation? The court here says no. 

After reviewing the overlapping and often abstract tests that have been applied to answer that question, the court comes up with a new one: “a cause of action can only be said to arise from protected conduct if it alleges at least one wrongful act—conduct allegedly breaching a duty and thereby injuring the plaintiff—that falls within the act’s definition of protected conduct.Plaintiff’s contract claim did not assert that it was wrongful to enter the stipulation; it asserted that it was wrong to breach it by taking the money out of escrow. The mere fact that an agreement is reached in connection with litigation doesn’t mean that a claim for its breach arises from protected activity. Otherwise, every claim for breach of a settlement agreement would draw an anti-SLAPP motion, which does not make sense.

Taking money out of the escrow is not itself protected activity. Withdrawing funds is not communicative at all, so the first three kinds of protected conduct in § 425.16(e)(1)–(3) don’t apply. Although § 425.16(e)(4) does protect “conduct in furtherance” of certain First Amendment-protected rights, it is limited to such acts “in connection with a public issue.” So even if defendants could somehow say that taking money out of an escrow related to their First Amendment rights, because the underlying dispute was about an insurance setoff in a workers’ comp. dispute, it was, by no means, a public issue.


A Deposition Is a Business Records Subpoena Is a Deposition

Naser v. Lakeridge Athletic Club, No. A138353 (D1d5 June 27, 2014)

Losing plaintiff appeals denial of motion to tax costs. The court decides two issues: First, jury fees are recoverable costs even if the case doesn’t make it to jury trial. Code of Civil Procedure § 631, as recently amended, requires a non-refundable deposit of $150 in jury fees on before the first CMC. Since there
s no chance for a refund even if, for instance, the defendant wins on summary judgment, the fee that can be recovered as cost under § 1033.5(a)(1). Second, the defendant can recover the cost of subpoenaing documents under the provision that allows recovery of deposition costs. Somewhat anomalously, the Discovery Act calls a third party document subpoena where no testimony is sought a “deposition” subpoena. See § 2020.010. So, although it seems semantically wacky, costs incurred in issuing and enforcing such a subpoena are thus costs of “[t]aking, video recording, and transcribing necessary depositions including . . . travel expenses to attend depositions” under § 1033(a)(3).


Wednesday, July 2, 2014

Standing up for State Standing

Hector F. v. El Centro Elementary School Dist., No. D064035 (June 24, 2014)

A student who brought a writ of mandate against his school graduated while the litigation was pending. The trial court granted the school’s motion to dismiss for mootness and lack of standing. But state standing isn’t like federal Article III standing. In the mandamus context, longstanding California precedent recognizes the standing of citizens to litigate public rights in the public interest, so long it does not short-circuit important processes of governing meant to occur outside of litigation. Furthermore, Code of Civil Procedure § 526a gives taxpayers standing to sue to enjoin unlawful expenditures of public funds. That right has been construed broadly to include unlawful governmental actions with only incidental costs.


Gentry Falls, But PAGA Waivers Are Still Void

Iskanian v. CLS Transp., No. S204032 (Cal., as modified, June 26, 2014)

This is yet another arbitration preemption decision in the wake of AT&T v. Concepcion, 563 U.S. 321 (2011). The California Supreme Court holds that its prior opinion in Gentry v. Superior Court, 42 Cal. 4th 443 (2007)—which says class action waivers in employment agreements are generally unenforceable—is preempted under the FAA. But the court goes on to decide that the FAA does not preempt state law that prohibits waiver of representative actions under the Labor Code Private Attorney General Act.