Tuesday, June 30, 2015

The J-Word

Katzenstein v. Chabad of Poway, No. D066340 (D4d1 Jun. 12, 2015)

The trial court in this case struck Defendant’s counterclaim in an unsigned minute order because Defendant failed to comply with some procedures particular to probate court. Defendant appealed. But there’s no appellate jurisdiction because the order striking the claims wasn’t appealable. Under Although
§ 581d of the Code of Civil Procedure, a signed order that dismisses an action because a motion to strike or demurrer has is granted can be appealed as a final judgment, even if it doesnt use the j-word. But an unsigned minute order doesn’t cut it. Indeed, in this case, it appears that the trial court didn’t even intend to strike with prejudice, but just to require Defendant to resubmit the claims in accord with Probate court procedure. So an appeal was premature.

Appeal dismissed.

Friday, June 19, 2015

Too Clever a Joinder

David v. Medtronic, No. B254914 (D2d8, as modified Jun. 26, 2015)

It’s my practice not to comment on cases where Kirkland & Ellis represents a party. So I’ll just note that this is an interesting opinion regarding what happens when a nominal defendant is joined for the purpose of keeping forum stuck in California state court. And say congrats to my colleagues . . . .

Thursday, June 18, 2015

Why Not Wait?

Khalatian v. Prime Time Shuttle Inc., No. B255945 (D2d8 Jun. 9, 2015)

In an appeal of the denial of a motion to compel arbitration in a wage-and-hour misclassification case, the court of appeal uncontroversially finds that plaintiff’s job as an airport shuttle driver involved interstate commerce and thus that the FAA preempted the anti-arbitration provisions in Labor Code § 299.

PAGA Takes Down Another Arbitration Clause

Williams v. Superior Court, No. B261007 (D2d4 Jun. 9, 2015)

Plaintiff in this case filed a single count action over the Labor Code Private Attorney General Act, seeking damages for Labor Code violations in both an individual and representative capacity. Defendant moved to compel arbitration, arguing that plaintiff had contractually waived the right to bring PAGA claims, and that, in any event the Labor Code violations that were the factual predicates to his PAGA claims we subject to an arbitration clause in his employment agreement. The trial court held the claims were unwaivable, but agreed that the underlying violations, when applied to the plaintiff individually, could be severed out and sent to arbitration, with the rest of the case stayed until that gets resolved.

Wednesday, June 17, 2015

Fraudulent Transfer Judgment Relates Back to Lis Pendens

Mira Overseas Consulting Ltd. v. Muse Family Enters., No. B254298 (D2d2, as modified Jun. 30, 2015)

A property claim relates back to the filing of a lis pendens such that the judgment creditor has superior title to anyone who subsequently obtains an interest. And a fraudulent transfer claim that seeks, among other remedies, reconveyance of real property is a property claim for which a lis pendens can be filed. So in this case, plaintiffs’ fraudulent transfer judgment related back to their filing of a lis pendens on the affected property.


Too Much, Too Long

Oregel v. PacPizza, LLC, No. A141947 (D1d2 Jun. 1, 2015)

In a class action brought by Pizza Hut delivery drivers, the defendant answered, posted jury fees, conducted extensive class certification discovery and briefed class cert. Then, seventeen months after the case was first filed, Defendant filed a petition to compel the case to arbitration based on the lead plaintiff’s employment application. Unsurprisingly, the trial court denied the application based on waiver because the seventeen months of litigation was inconsistent with an intent to arbitrate, and the court of appeal affirms.

Tuesday, June 16, 2015

Employer: Texas Venue Same as Calfironia (Yeah, that's the Ticket ...)

Verdugo v. Alliantgroup, L.P. No. G049139 (D4d3 as modified June 25, 2015)

Plaintiff, a Californian, is suing her Texas-headquartered employer. Plaintiff’s employment contract has a Texas choice of law and lays venue in Austin. But Plaintiff’s wage-and-hour claims arise from California statutes that can’t be waived. Under the circumstances, the usual presumption—that a court will enforce a contractual choice of venue—gets reversed. The venue provision will only be enforced if the moving party can show that the contractual venue will not diminish Plaintiff
s unwaivable statutory rights in any way.

In assessing whether Defendant met its burden, the court of appeal here pauses to part company with Hall, v. Superior Court, 150 Cal. App. 3d 411, 416 (1983) and America Online, Inc. v. Superior Court, 90 Cal. App. 4th 1, 11 (2001), which hold that the analysis does not entail a comparison between California law and the substantive law of the contractual state. Even given, however, that a moving party can meet its burden by showing that the contractual forum would definitely apply California law or identical standards under its own state law, Defendant didn’t satisfy that burden here. The most it would say was that a Texas court would probably apply California law. But Defendant also “carefully preserved its ability to argue to a Texas court that it should apply Texas law,” and even “hinted at its intention to do so by seeking to downplay the significance of the statutory rights [plaintiff] seeks to enforce through this action.” Moreover, Defendant did not establish that substantive Texas law affords statutory rights identical to the California Labor Code provisions on which plaintiff’s suit is based.


Escape from Muni Court

Leonard v. Superior Court, No. C077597 (D3 May 22, 2015)

Defendant in this erstwhile limited jurisdiction collections case amended her pending cross-compliant, raising the demanded damages from $5,500 to $250,000. That qualified the case for unlimited treatment—a reclassification that should have been automatic under Code of Civil Procedure § 403.020. All she had to do was pay a $140 fee. But when she tried to pay the fee to the clerk she was told (twice) that it wasn’t necessary at that time and that her case had been reclassified.

Subsequently, the court granted a SLAPP motion directed at the counterclaims. About forty-eight days after the dismissal, Defendant filed a notice of appeal. But to her surprise, the case had not really been reclassified. The trial court struck her notice of appeal as untimely because unlike the sixty-day window in an ordinary case,
Cal. R. Ct. 8.104(a)(1), the rule governing limited cases affords thirty days to appeal. Cal. R. Ct. 8.822. To save her appeal, Defendant filed a motion to reclassify the case, which the trial court denied on account of her not being able to prove that more than $25,000 was at issue. Defendant took a writ, which the Third District grants.

As I mentioned, § 403.020(a) says that whenever a party files an amended pleading that increases the amount at issue past the $25,000 jurisdictional minimum and pays the fee, the clerk should reclassify the case as unlimited. It’s a non-discretionary, ministerial duty. The court faults Defendant for filing a reclassification motion under § 403.040, which is ordinarily used when a case is incorrectly classified, as opposed to a change in classification caused by an increased demand for damages in an amended pleading. But it’s not really clear what Defendant was supposed to do to get the trial court to act.  In any event, the clerk should have reclassified the case, so the court of appeal grants the writ and orders it to do so.

The court goes on to note a second mistake. The trial court should not have struck the notice of appeal as untimely, even if was right on the merits. That’s not its job. The filing of the notice divested the trial court of jurisdiction, so any challenge to the timeliness of the notice should have been directed to the court of appeal.

Writ granted.

Monday, June 15, 2015

Mexican Losses Are Plaintiff’s Wins

Diaz-Barba v. Superior Court, No. D066462 (D4d1 May 21, 2015)

A California state court has two options in granting a forum non-conveniens motion: it can dismiss the case entirely or it can issue a stay pending the resolution of the action in another jurisdiction. The latter approach is particularly popular in international cases where it appears that the parties could get justice in a foreign jurisdiction, but it’s not 100 percent certain. If the foreign litigation doesn’t work out, the stay can be lifted and the case proceeds here. 

Under § 664.6, It's Take It or Leave It

Leeman v. Adams Extract & Spice, LLC, No. A142321 (D1d4 May 21, 2015)

The parties in this Prop 65 class action agreed to a consent judgment under Code of Civil Procedure § 664.6, which included injunctive relief as well as a specific attorney fee award to plaintiff. The trial court cut the fee award in half and then entered the judgment as modified. Section § 664.6, however, does not permit it to do that. The trial court can’t just alter the terms of the deal and enter judgment as it sees fit. It could refuse to enter the judgment and send the parties back the table, but it could not add or modify any express term.


It seems like this result could have been avoided with some minor drafting tweaks to the settlement papers. The parties in this  case agreed that the defendant “shall pay” a fixed sum of money for plaintiff's fee. That put the court in the position of being required to effectively modify the agreement in order to reduce the fees. But the agreement could have stated that defendant would not oppose a motion for fees so long as they did not exceed a certain amount—the kind of “clear sailing” provision that has been approved by California Courts in class action settlements, see In re Consumer Privacy Cases, 175 Cal. App. 4th 545, 552 (2009). Were that the language, the court’s reduction of the award shouldn’t constitute an amendment of the agreement, so there would be no issue under § 664.6. Of course, that would subject plaintiff to some additional risk, and maybe she wouldn’t have agreed.

Monday, June 8, 2015

Every Requirement Isn't Jurisdictional

Kabran v. Sharp Memorial Hosp., No. D064133 (D4d1 May 20, 2015)

This is a med-mal case where the timeliness of a new trial motion is at issue. Plaintiff complied with the fifteen day window to file a notice of intention to move for new trial under Code of Civil Procedure § 659(a). But she didn’t pay the filing fee when she filed her brief and affidavits, which resulted in her blowing the ten-day deadline to get those docs on file under § 659a. Defendant didn’t object to the trial judge, who ultimately granted the motion on the grounds of newly discovered evidence. On appeal, defendant argues, for the first time, that plaintiff’s tardiness deprived the court of jurisdiction to grant the motion.

Not so. Although § 659(a)’s fifteen-day deadline to file a notice of intention has been deemed “mandatory and jurisdictional,” the better of the cases agree that § 659a’s ten-day deadline thereafter to file a brief and affidavits is not. The court here declines to follow Erikson v. Weiner, 48 Cal. App. 4th 1663 (1996), which read § 659a’s use of the word “shall” to impose a jurisdictional limit. As the court usefully explains, the use of statutory language indicating that a requirement is strict or mandatory does not automatically deprive the court of jurisdiction if there’s non-compliance. Failure to comply with these mandatory requirements does not render any proceeding in spite of them void.

It follows that, since there isn’t a jurisdictional defect at issue, nothing stops the court from holding that defendant waived the error by failing to object. Which it does.


Update: Review granted, July 29, 2015.

Too Much by Half

In re Butler, No. A139411 (D1d2 May 15, 2015)

The court of appeal appointed some lawyers at Keker & Van Nest to represent a prisoner who was challenging parole eligibility regulations for prisoners on life sentences. The Keker lawyers were able to negotiate a settlement where the Board of Prison Terms agreed to amend the regs to resolve the problem. Keker now seeks to recover $440k in fees under Code of Civil Procedure § 1021.5, which permits a fee award to a party that obtains a significant public benefit and the interests of private enforcement make an award appropriate. The Board claims that no benefit was achieved and that the requested fees are unreasonable.

For complicated reasons involving state sentencing law, the court finds that the Keker lawyers did, in fact, secure a public benefit. As to the reasonableness of the fees, because this is an original proceeding in habeas, the court of appeal tries both fact and law here. The court just says, without explanation, that it believes the fees are “excessive and unreasonable” and orders the parties to try to work it out over twenty days. If that doesn’t work, the court will decide. The court then tips its hand a little, noting that “while the members of this panel are not currently in agreement as to the specific amount of a reasonable fee, all agree it is somewhat less than half the amount requested.”

Friday, June 5, 2015

Arbitration & the Art of Truck Driving

Garcia v. Superior Court, No. B257054 (D2d1 as modified June 2, 2015)

Section 1 of the FAA carves out “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from FAA § 2’s mandate that contracts in commerce are generally arbitrable. Given the longstanding understanding of “foreign or instate commerce” as “any commerce,” see Wickard v. Filburn, 317 U.S. 111 (1942), it might seem natural to read the provision as saying that the FAA doesn’t apply to employment contracts. But—notwithstanding the fact that five years earlier it had broadly interpreted a reference to interstate commerce in FAA § 2 to mean the full extent of commerce and understood under the U.S. Constitution—in 2000, the Supreme Court read § 1 as limited to the employment contracts of workers who actually work in the instrumentalities of commerce like ship captains and railroad engineers. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001).  This case addresses whether § 1 applies to truck drivers who are defined under their contracts as independent contractors, as opposed to employees.

A Rare Firm Hand on Discovery

Williams v. Superior Court, No. B259967 (D2d1 May 15, 2015)

Plaintiff brought a statewide PAGA representative action on behalf of Marshalls employees, alleging various predicate wage & hour violations. He served a set of interrogatories that asked for the contact information of all nonexempt Marshalls employees in California during the relevant time. The company objected, even after plaintiff offered to pay for a pre-disclosure notice that would permit employees to opt out of having their information disclosed. Plaintiff moved to compel, which the trial court largely denied. The court ordered Marshalls to produce information for only the store in which plaintiff worked. It further ordered that plaintiff could renew his motion, but only after he had been deposed for six hours, and subject to the defendants right to show the lack of merit to his claims. Plaintiff took a writ, which the court of appeal agreed to hear.

More Non-Judgment Judgments

Lee v. Silveira, No. F067723 (D5 as modified June 8, 2015)

A PI plaintiff makes a § 998 offer of judgment for a million dollars. Defendant does not accept. The verdict was more than $1 million, but the court reduced the award under Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541, 548 (2011), which says the plaintiff is entitled to a damages award in the amount of her paid medical bills, not the amounts first billed, because the bills have no relationship with economic reality. After the reduction, the award dropped below $1 million. It is pretty clear that had the jury been asked calculate damages under Howell, the plaintiff wouldn’t have beaten the offer and thus couldn’t shift her substantial expert costs to defendant. The fact that the trial court did so post-hoc shouldn’t lead to a different result. The court so holds.

The court goes on to address a second issue regarding post-judgment procedure. Like a lot of post-judgment issues, it turns on the timing of the judgment. The jury’s original verdict was reflected in a document called “Judgment on Jury Verdict,” which, notwithstanding its title, specifically noted that it was subject to post-trial adjustments for the medical expenses and prejudgment interest. Defendants moved to reduce the “judgment” for the delta between the paid and billed expenses. Plaintiff did not contest the adjustment, but argued that prejudgment interest and her expert fees should be tacked on before the court made the adjustment. The court agreed with plaintiff and ultimately entered a new, final judgment that included the interest and fees.  Defendant then moved under Code of Civil Procedure § 663 to vacate the judgment and enter a new one.

Plaintiff argued that the first “Judgment on Jury Verdict” was a bona fide judgment and thus should have been attacked by a motion for new trial. So when Defendant’s first motion was effectively denied, that was like denying a new trial motion, which is an appealable order that divests the court of jurisdiction to act further.

Problem is, an order that foresees further action by the trial court is not a judgment even if it has the word “judgment” in its title. (I really wish trial courts wouldn’t do that because of the chaos it tends to create, but it happens all the time.) So a post-verdict, pre-judgment motion directed to a remedy within the province of the trial court was entirely proper. And then when a legit final judgment did enter, a § 663 motion was an appropriate vehicle for defendant to use to have it corrected.


Thursday, June 4, 2015

Now that's Customer Service...

Greene v. Bank of Am., No. B268021 (D2d5, as modified May 28, 2015)
Plaintiff, rebuffed by a bank teller who wouldn’t cash a check drawn from the bank without opening an account, supposedly threatened to blow up the bank. Supposedly. But when he was arrested and tried for that, he was acquitted. He then sued the bank and two employees for malicious prosecution for giving a phony bomb threat report to the police. 

"A Fight to the Death Litigation Struggle" (and also a SLAPP)

Bergstein v. Stroock & Stroock & Lavan LLP, No B244896 (D2d8 May 8, 2015)

This is the apparent end of one of the many rounds of ugly litigation in various courts arising from a dispute between movie producer and Hollywood businessman David Bergstein and Aramid Entertainment, a film finance hedge fund. The blow-by-blow of what plaintiff calls
a fight to the death litigation struggle is way too much to recount here. But the pertinent part of the story is that Susan Tregub, Bergstein’s long-time personal lawyer, with whom he had a falling out over fees, supposedly leaked Bergstein’s privileged and confidential information to Aramid and its lawyers. Bergstein won a $50 million breach of fiduciary duty verdict against Tregub. Then, in this case, he sued the lawyers representing Aramid on the litigation side—lawyers who were supposedly on the receiving end of the leaked info and used it in the various litigations. The trial court granted the lawyers’ anti-SLAPP motions.

Wednesday, June 3, 2015

Service by Birdcage-Liner

In re Establishment of The Press-Enterprise as a Newspaper of General Circulation, (D4d2 May 7, 2015)

When the law refers to something as “constructive,” it basically means it’s a lie. That’s how service by publication works. You try really hard to serve someone, and then, instead of just giving up, you publish a notice in some publication that nobody actually reads and get your default judgment. There is no real service. It’s the effort that counts.