Tuesday, September 23, 2014

Debtor Fails to Buy More Time

Jade Fashion & Co. v. Harkham Indus., Inc., No. B248432 (D2d7 Sept. 8, 2014)

The trial court in this debt-collection case granted a plaintiff’s summary judgment motion. The defendant opposed both on the merits and under Code of Civil Procedure § 437c(h), which permits a denial or delay of a summary judgment motion when the non-moving party establishes that it needs more discovery. Defendant claimed that it needed to depose plaintiff’s transactional counsel on the underlying debt
to properly oppose the motion. The trial court disagreed and the court of appeal affirms.

There’s a threshold issue regarding the preparation of appellant’s appendix. It apparently “included all of the papers that it filed in opposition to the summary judgment motion, and excluded almost all of the papers filed by” the plaintiff. Obviously, that’s not the proper way to prepare an appendix. But, since the appellant loses anyway, the court decides to reach the merits.

On the
§ 437c(h) issue, a party seeking a continuance is required to provide a declaration setting forth a basis for the trial court to find that facts essential to the opposition may exist. The declaration must demonstrate that the facts to be obtained are essential to the opposition and explain why there is reason to believe they exist and will be obtained in additional discovery. Here, the defendant provided the declaration, but it was insufficient. It did not explain what evidence was to be obtained from the attorney’s deposition. Further, the factual issues raised in the declaration would not have provided a basis to deny the motion. 


Friday, September 19, 2014

Let's Stop Rewarding Demurrer Sandbagging

Connerly v. California, No. C073753 (D3 Sept. 3, 2014)

So Ward Connerly and his crew at the Pacific Legal Foundation are peeved about some vague pro-diversity language in the statutory procedures governing the selection of the California Citizens Redistricting Commission. The relevant statute—Government Code § 8252—provides that six of the commissioners should be “chosen to ensure the commission reflect this state’s diversity, including, but not limited to, racial, ethnic, geographic, and gender diversity.” Connerly sued, claiming that the statute violates Prop. 209.

Monday, September 15, 2014

Chin-ups on the Heck Bar

Brown v. County of L.A., No. B249825 (Aug. 29, 2014)

Chalk this one up as one of the more creative prisoner arguments I’ve seen in a while. Plaintiff is doing seventeen years to life for a murder he committed as a teenager. He claims that, because he was underage when he plead guilty, his plea agreement is voidable under Civil Code § 35, which allows minors to disaffirm contracts. Unfortunately for the plaintiff, you can’t use a civil suit to collaterally attack a criminal judgment. That’s what habeas is for. Further, although the plea bargain/contract analogy is oft drawn, criminal law does not wholesale import every aspect of civil contract law. While age is a recognized factor in measuring the voluntariness of a plea, there’s no bright line rule about minors like the one that applies to civil contracts.


Thursday, September 11, 2014

Aaaaaaaaaaaggggghhhhh Pizza Man!

Patterson v. Domino’s Pizza, No. S204543 (Cal. Aug. 28, 2103)

This 4-3 Cal. Supreme Court case ostensibly isn’t about procedure. It’s about whether an employee of a Domino’s Pizza franchise can be considered an employee of Domino’s itself for the purposes of FEHA. The majority (Justice Baxter) and dissent (Justice Werdegar) don’t much disagree about the law: a franchisor is an employer when it exercises control over “hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee‘s employees.” 

What they disagree about, however, is whether the evidence of control was sufficient that Domino’s was entitled to summary judgment. Effectively, the real debate is over the strength of the inferences that can be drawn in deciding whether there are disputes of material fact. That’s a very significant procedural question, and one on which we could benefit from more guidance. But the discussion in the opinion is not framed that way, so I expect that it will have minimal procedural significance outside of the employment/agency realm.

To be honest, mostly I only wrote this post because the case reminded me fondly of Old Skull, an early ‘90s gutter punk band made up of ten-year-olds, whose second most memorable lyric was a trenchant comment on quality of the defendant’s product. (For those who didn’t spend much of 1989 up late to watch 120 Minutes and PostModern MTV, “I hate you Ronald Reagan” comes first.)

Another Court Weighs in on the Lawyer Statute of Limitations

Parish v. Latham & Watkins, B244841 (D2d3 on rhearing,** June 26, 2015)

Prevailing defendants in a trade secrets case sued the plaintiff’s law firm for malicious prosecution. As one would expect, the firm responded by filing an anti-SLAPP motion. There’s no dispute that the mal-pros case arises from petitioning activity, since the gist of the complaint attacks the filing of the trade secrets suit. So the motion turns on the probability of prevailing, which in this case depends on which is the applicable statute of limitations: The one-year period in Code of Civil Procedure § 340.6 or the two-year period in § 335.1.

Section 340.6 provides a one-year limitations period for “[a]n action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services . . .” As we have discussed several times over the past few months, there is an ongoing debate about how broadly to read this language. One camp reads it literally to apply to garden variety torts so long as they are committed by attorneys while providing professional services. The other reads it more narrowly, limiting its application to malpractice actions. 

Unfortunately for the law firm, while this appeal was pending, two of the judges on this panel joined an opinion that took the narrow path in holding that § 340.6 does not apply to malicious prosecution claims against lawyers, which essentially forecloses the issue. The court goes on to find that the plaintiff came forward with sufficient evidence that the trade secrets case lacked probable cause, and thus that it had established a sufficient likelihood of success to avoid dismissal as a SLAPP.


**On rehearing, the court revised the opinion, reducing the statute of limitations discussion to a single paragraph without change in the result.

Wednesday, September 10, 2014

More Arbitration

Cruise v. Kroger, No. B248430 (D2d3, on rehearing Jan. 20, 2015)

An employee is bound to arbitrate her employment claims against her employer because her employment agreement contains a valid arbitration clause. But because an arbitration policy that was referenced in the agreement was never given to her, she could not be bound to the procedures contained in the policy. Instead, the default procedures in the California Arbitration Act would govern.


Tuesday, September 9, 2014

Over in Limited Civil ...

CACH LLC v. Rogers, No. 56-2012-00420026-CL-CL-VTA (Ventura App. Div. Aug. 26, 2104)

The Code of Civil Procedure affords simplified trial procedures for limited civil cases—those where less than $25,000 is at issue. One of those procedures, in § 98, permits a party to submit direct testimony by declaration, provided the declarant agrees to be subject to service in some place within 150 miles of the courthouse, so he, she, or it can be subpoenaed for cross-examination at trial. The point is to avoid burdening certain witnesses—like custodians of records—who are unlikely to face serious cross at trial.

Here the declarant—a company offering documentary evidence—was from Colorado, but agreed to take service at its attorney’s office in Woodland Hills. Problem is, when service was attempted, the attorney’s office wouldn’t take it, claiming that the client didn’t work there. The court
following a similar appellate division caseholds that the trial court should not have accepted the declaration. If the declarant isn’t actually available for effective service at the location provided, § 98 isn’t satisfied and the declaration testimony (including attached documents) can’t come in. Any other result would interfere with the right to cross examine witnesses at trial.


Monday, September 8, 2014

Vacating the Vacatur to Consider Missing Conflict Disclosures

United Health Centers of the San Joaquin Valley v. Superior Court, No. F067763 (D5 Aug. 25, 2014)

Due to apparent shoddy recordkeeping, the arbitrator in this case failed to disclose all of the conflicts information required by Code of Civil Procedure § 1281.9. The question is, whether the omissions from the disclosure were sufficient reason to vacate the arbitrator’s award. As the court here explains, that turns on an issue of waiver, which itself depends on whether the plaintiff had reason to know that the disclosures were incomplete when the arbitration commenced.

Friday, September 5, 2014

Public Prosecutor Exception to SLAPP Statute Applies to Appeals

People v. McGraw-Hill Companies, Inc., No. A140922 (D1d2 Aug. 18, 2014)

Section 425.16(d) of the Code of Civil Procedure exempts actions brought by public prosecutors from the ambit of the anti-SLAPP statute. The court here reads that to mean the whole anti-SLAPP statute, including § 425.16(i), which provides for an immediate interlocutory appeal. So the denial of the motion in this case, on § 425.16(d) grounds, was not appealable and the appeal needed to be dismissed for want of appellate jurisdiction.

Class Cert Comes Home to Roost

Hendershot v. Ready to Roll Transp., Inc., No. B247730 (D2d3 Aug. 14, 2014)

The defendants in this employment class action appear to have been jerks—stiffing plaintiffs on discovery, failing to show at depos, and otherwise engaging in obstructive gamesmanship. And all the while, they were busy extracting releases and arbitration agreements from the bulk of an already small—fifty-three member—plaintiff class. Defendants did not produce these agreements in discovery even though they were responsive. But when plaintiff moved to certify the class, defendants opposed on numerosity grounds, arguing that the nine class members from whom releases or arb agreements were not obtained were insufficiently numerous to warrant class treatment. The trial court agreed and denied cert.

What goes around comes around. In an opinion that goes out of its way to include pretty much every favorable quote about small classes being certifiable so long as joinder would be impracticable, see Cal. Code Civ. Proc. § 382, the court holds that there was sufficient numerosity to certify. In particular, the court notes that excluding the released class members from the count prejudged the defendant’s affirmative defenses, which the court is not supposed to do on a certification motion. So  the relevant number was fifty-three, not nine. (The court notes—practically flipping the bird to the defendant—that although the distinction between the majority who signed releases and the named plaintiffs, who didn’t, would defeat typicality under well-established law, defendant didn’t argue the point, so that isn’t an impediment to reversal.)

The court also holds that the procedure employed by the trial court denied the plaintiffs due process. The arbitrability defenses that applied to some of the release-signing plaintiffs weren’t pleaded as affirmative defenses. And as noted, defendants hid the ball and didn’t produced the documents until their opposition to class cert. Plaintiffs thus had no notice that the defense was at issue. Once it was revealed that the arbitration agreements and settlements formed the basis of defendant’s opposition, plaintiffs should have been given an opportunity to take discovery on the issue and to brief it in connection with the certification motion.