Friday, July 31, 2015

No Mulligans in § 473(b) Seppuku

Even Zohar Const. & Remodeling Co. v. Bellaire Townhouses, LLC, No. S210804 (Cal. Jul. 20, 2015)

After Defendants failed to respond, the trial court entered a $1.7 million default judgment in a construction dispute. Defendants sought mandatory relief from default under Code of Civil Procedure § 473(b), which requires their attorney to cop to excusable neglect and, as they say, fall on his sword. But in his declaration
which the trial court described as “fuzzing up the issue”—their attorney mostly threw his office staff on his sword while inflicting only a flesh wound upon himself. The trial court denied the motion.

Then, a month later, Defendants filed a second § 473(b) motion. In it, their counsel told an entirely different story—a lengthy yarn about how he had been unduly occupied with obtaining the return of client files that he been seized by the DA in a criminal investigation. The trial court said that even if the seemingly disparate theories were factually consistent, it did not believe the attorney’s explanation for his failure to include them in the first motion—that he was embarrassed. It thus would have found that the motion was an improper motion for reconsideration under § 1008(b), because the facts it disclosed were available to Defendants at the time of the original motion. The trial judge felt bound, however, by Standard Microsystems Corp. v. Winbond Electronics Corp., 179 Cal. App. 4th 868 (2009), which it read to hold that the § 1008 reconsideration standard didn’t apply to § 473(b) motions. So it granted the motion. The court of appeal, in reversing, criticized Standard Microsystems, thus creating a split of authority. The California Supreme Court granted review.


Justice Werdegar’s opinion, for a unanimous court, holds that there is no conflict between § 473(b) and § 1008 that would require an exception to the reconsideration standard to a motion for relief from default. Section 1008 only has one exception—it does not preclude a trial court from sua sponte reconsidering a prior ruling while it still has jurisdiction to do so. Since that exception wasn’t at issue here—this was a renewed motion—the § 1008 standards applied. So the trial court would have been within its right to deny the motion on the basis that the was no new evidence. 


The court expressly disapproves of Standard Microsystems and a couple other cases, to the extent inconsistent with the opinion.

Court of appeal affirmed.

Thursday, July 30, 2015

Clearing the Decks for Appeal

Flowers v. Prasad, No. B260140 (D2d4 Jul. 17, 2015)

Plaintiff, who relies on a service dog, sued a restaurateur under the California Disabled Persons Act and the Unruh Act, because the restaurant wouldn’t let him bring his dog in. The trial court granted a demurrer on the Unruh Act claim. Plaintiff had the court dismiss the remaining DPA claim without prejudice to get to a final judgment to expedite his appeal. That procedure is ok. Although a voluntary dismissal isn’t generally appealable, it is when it follows an order dismissing significant claims in a case. There are some exceptions that address manipulation of appellate jurisdiction when the dismissal isn’t really final, but those aren’t at issue here.

The court goes on to reverse the grant of the demurrer on the Unruh Act claim.


Reversed.

Wednesday, July 29, 2015

Hercules and the Not Very Hard Case

DKN Holdings v. Faerber, No. S218597 (Cal. Jul 13, 2015)

In a unanimous opinion written by Justice Corrigan, the California Supreme Court unanimously reverse the court of appeal’s strange ruling on res judicata on more or less exactly the same grounds as I pointed out in a post last year. (That post is one of my best-read ever.) So maybe Justice Corrigan is amongst those who read this blog and take note of the science dropped herein. Or maybe the court of appeal shouldn’t have rested its rationale on the grounds that an earlier Supreme Court decision, clearly on point, was “wrong.” We can only imagine.


Reversed.

Applying Rule Change to Pending Case Isn't Retroactive

Siry Inv., L.P. v. Farkhondehpour, No. B251250 (D2d2 Jul. 9, 2015)

While a prior appeal in this case was pending, the Judicial Council amended Rule of Court 8.278 to permit a prevailing party on appeal to recover the fees and net interest expenses incurred in obtaining an appellate bond. On remand from the prior appeal, the trial court awarded those costs to the prevailing appellant, even though the amended rule didn’t come into effect until after the opinion in the first appeal issued. The application, however, wasn’t retroactive, much less impermissibly so, because the rule did come into effect before the remittitur issued. In the court of appeal, a case remains pending until that occurs. And since there was adequate evidence that the appellants did, in fact, incur expenses in securing the bond, the trial court’s award is affirmed.

Tuesday, July 28, 2015

Reverend Unemployed Nazi Biker v. CALDOT, Fully Immune, but Poor

Martinez v. CALDOT, No. G048375 (D4d3 Jul. 7, 2015)

Except in the part at the beginning or end where counsel are listed, lawyers mostly don’t like to see their names in appellate opinions. Especially government lawyers. And especially in published opinions. For good reason. When it happens, somebody is usually in trouble.


For Whom the Death Knell Tolls Not

Munoz v. Chipotle Mexican Grill, No. 249505 (D2d1 Jun. 30, 2015).
 

Second Munoz case decided on the same day, but different Munozes.

This Munoz filed a class action alleging a slew of wage and hour claims, claims that expenses for work clothing were improperly deducted from pay, and claims under the Labor Code Private Attorney General Act. The court largely denied class cert because individual issues predominated. But the PAGA claims—which don
’t require cert because they are brought, effectively, on behalf of the state in an enforcement capacity—were unaffected. Munoz appealed.

Generally, a plaintiff can appeal an outright denial of class cert under the “death knell” doctrine. The rationale is that, with class treatment off the table, it often becomes economically unviable for an individual plaintiff to pay his attorney to continue to pursue the case to judgment. So, as a matter of policy, an interlocutory appeal is permitted. But the doctrine doesn’t permit an appeal when class cert is partially denied. So long as there’s enough of a claim to profitably prosecute, the plaintiff maintains an incentive to continue. The policy against piecemeal appeals trumps the policy supporting immediate review.


Here, class cert was denied in full. But Munoz still has his PAGA claims. He asserts them on behalf of 26,000 employees. And the PAGA penalties are $100 per employee, per pay period in which a violation continues, 25 percent of which go to the plaintiff. So there’s still plenty of economic incentive for him to forge on, even without the class. The death knell hath not tolled!


Appeal dismissed.

Monday, July 27, 2015

Stipulation Beats Five-Year Rule

Munoz v. City of Tracy, C075955 (Jun. 30, 2015)

This case got dismissed under Code of Civil Procedure §§ 583.310 and 583.630 for plaintiff’s failure to bring it to trial within five years. But two months before the five years had run, with a scheduled trial date only a month away, the parties jointly stipulated to continue the trial for six months, so that plaintiff’s newly hired trial attorney could get up to speed. The stip didn’t mention the five-year rule. Soon after the five years had run—and during the continuance to which Defendant had stipulated—Defendant moved to dismiss under §§ 583.310 and 583.360(a). The trial court held that the stip didn’t prevent dismissal, because it did not contain an express waiver of the five-year rule. It dismissed the case with prejudice.


If it seems unfair that a defendant can rock a plaintiff to sleep by stipulating to extend the trial date past the five-year window, and then jack him up with a motion to dismiss as soon as the five years run, that’s because it is. So the court of appeal reverses. Section 583.330 says that the five-year period can be extended by stipulation. It mentions no formalities. That is bolstered by § 583.130, which adopts a policy that the parties stipulations and agreements about the progress of a case are generally preferred over the statutory policy requiring trial within five years. The court finds further support in Miller & Lux. Inc. v. Superior Court, 192 Cal. 333, 337–38 (1923), a ninety-two year old California Supreme Court opinion. There, interpreting a prior version of the statute, the court noted that the five year window could be tolled by a stipulation that either expressly stopped the clock or extended the trial date beyond the five year window. Since the defendant took the second option, the dismissal was improper.


Reversed.

Disentitlement Strikes Again

Ironridge Global IV, Ltd. v. Scripsamerica, Inc., No B256198 (D2d8 Jun. 30, 2015)

Under the terms of a settlement, entered on the record as a judgment under Code of Civil Procedure § 664.6, Defendant had to pay Plaintiff by issuing stock and delivering it to Plaintiff. If the price went down, Defendant was required to pony up more stock. The price did, in fact, go down. When Defendant refused to turn over the stock, Plaintiff successfully sought to enforce the judgment in court. The court ordered Defendant (1) not to give away any of its stock to any other party; and (2) to give Plaintiff the stock it was entitled to.


Defendant appealed. Under established appellate procedure, that stayed order (2), because the turnover obligation is mandatory, but not order (1) which is just a prohibitory injunction. See Kettenhofen v. Superior Court, 55 Cal. 2d 189, 191 (1961) (“An appeal stays a mandatory but not a prohibitory injunction.”). But while the appeal was pending, Defendant violated order (1) by issuing 8.7 million shares of its stock to third parties. Bad idea. Under the disentitlement doctrine, when there’s no stay, an appellate court has the discretion to dismiss an appeal when the appellant violates the underlying trial court order being appealed. The court does so here.


Appeal dismissed.

Friday, July 24, 2015

Court Can Reconsider Arbitration Order

Pinela v. Nieman Marcus Grp., Inc., No A137520 (D1d4 Jun. 29, 2015).

This is a long and complicated decision addressing the enforceability of Nieman Marcus employee
’s arbitration agreement. A bunch of overlapping choice of law and enforceability issues are at issue. But it basically all boils down to the fact that the agreement’s election of Texas law to govern the merits of any dispute arising from the employment relationship (not just contract disputes) made it unconscionable. The election would deprive plaintiff of her unwaivable statutory wage and hour claims under California law. You can’t do that in California.

In getting there, the court makes an interesting point: the line of cases addressing the limited “vestigial” jurisdiction that trial courts retain after compelling arbitration does not apply to the court’s sua sponte power to reconsider the arbitration ruling itself. Here, the court initially compelled most of the case to arbitration, but following developments in the case law—including a published court of appeal case interpreting the exact same agreement—changed its mind. There’s nothing wrong with that.


Affirmed.

Jerk Plaintiffs Make Bad SLAPP Law

Finton Constr., Inc. v. Bidna & Keys, APLC, No. G050093 (Jun. 29, 2015)

This case is an offshoot of a very ugly-looking partnership litigation pending in LA Superior Court.  The gist of this matter is that a departing partner allegedly copied a bunch of files onto a hard drive, which he later turned over to his lawyers. The lawyers disclosed this fact to their opponents and the court in the LA case. Discovery issues regarding the handling and production of the files on the hard drive are being actively litigated in the LA case. The trial court appears to be making rulings to the effect that the drives don’t need to be unilaterally returned, and that that the documents on it are relevant and discoverable in the litigation. It has entered some orders attempting to work out a protocol to preserve and produce the documents, while ensuring that they aren’t misused. Seems reasonable.


Thursday, July 23, 2015

Some Limits in the Ethical Wall

Castaneda v. Superior Court, No. B259950 (D2d8 Jun. 24, 2015)

L.A. Superior Court runs a mediation program called CRASH, where two volunteer attorney referees, assisted by a settlement judge, try to work out settlements in employment cases. To plaintiff’s displeasure, six months after a CRASH mediation where his counsel allegedly disclosed confidential strategies to the panel, one of the attorney volunteers’ partners substituted in as counsel for the defendant. Nobody disputes that the volunteer would be DQed from the case. The issue is whether the conflict should be vicariously imputed to her partner. The trial court held that, regardless of whether confidential info had been disclosed, an ethical screen-off of the volunteer would be sufficient to impute any conflict. Plaintiff took a writ.

Wednesday, July 22, 2015

Negligence vs. Causation

Bermudez v. Ciolek, No. G049510 (D4d3, as modified July 20, 2015)

In a car accident case with two defendants, the jury found both negligent, but that only Defendant #1 one was a substantial factor in causing the plaintiff’s injury. Defendant #1 says that the verdict forms are inconsistent so she deserves a new trial. But they aren’t. The record showed that the jury could have easily found that Defendant #2 was negligent in that he was driving at slightly above the speed limit, but that his speeding wasn’t the cause of the accident.


Defendant #1 also challenges the plaintiffs’ medical damages. As we discussed last month hospital bills generally aren’t good evidence of medical expenses, because the billed amounts have so little bearing on what ultimately gets paid, which is the proper measure of damages. At least that’s the case with insured plaintiffs, because its the leverage of the insurers that gets the providers to reduce the check to the realm of the reasonable. 


But plaintiff here isn’t insured. His bills have never been paid and the hospital still could technically try to collect on them in full. Nonetheless, the court finds that a plaintiff is generally entitled to the lesser of: (1) medical costs paid or incurred; or (2) their reasonable value. In an uninsured case, (2) requires a wide-ranging inquiry, in which the plaintiff must produce some evidence, independent of the bills, showing that the charges were reasonable. The bills aren’t per se inadmissible, but on their own they won’t carry the day. That ultimately wasn’t an issue here, because (other than a small conceded reduction) plaintiff did come forward with some other evidence.

Affirmed, except for amendment of judgment to make a minor reduction of damages.

Tuesday, July 21, 2015

The Theory of Trial Principle

Navarrete v. Meyer, No. D067454 (D4d1, as modified Jul. 22, 2015)

When you try and lose a case based on a core theory that applies the facts to the law, an appellate court generally won’t let you change that theory in seeking reversal. This is known as the “theory of trial principle.” But the principle isn’t super-rigid. So if your appeal is generally consistent with your trial theory but invokes more detailed, while consistent, legal analysis, the theory doesn’t preclude a reversal. After all, sometimes things are just a little more thoughtful given the pace and focus of an appeal. The appellate lawyers in this case invoked a statute that hadn’t been addressed in the trial court briefing. But their theory was more or less consistent, so the theory of trial principle wasn’t offended, and they could make their argument on appeal.


That being the case, and the argument being permitted, the trial court erred in granting summary judgment.
 

Reversed.

Monday, July 20, 2015

A Good Reason to Address Class Cert Early

Falk v. Children’s Hospital L.A., No. B251182 (D2d3 Jun 24, 2015)

This case is about so-called American Pipe tolling. See Am. Pipe & Const. Co., v. v. Utah, 414 U.S. 538 (1974). It was developed under federal law, but generally applies in California as well. The gist of the doctrine is that a plaintiff who is within the class definition in a pending class action can rely on that action in deferring to bring her own suit. The statute of limitations on her claims gets tolled during that period. The whole point is to deter every potential class member from feeling like they need to jump in to preserve their rights, which would defeat the whole point of the class action procedure.


No Piggybacking on a Co-Defendant's 998

Litt v. Eisenhower Med. Ctr., No. D067455 (D4d1 Jun. 19, 2015)

Plaintiff got hurt in a hospital cafeteria. Defendant 1, the hospital, served a Code of Civil Procedure § 998 offer of judgment on Plaintiff for $15,000, which plaintiff rejected. Plaintiff subsequently amended his complaint to add Defendant 2, the cafeteria operator. Under the cafeteria contract, Defendants 2 agreed to indemnify Defendant 1 in cases like this one. At trial, plaintiff won a $3,000 verdict, joint and several against both defendants.


Trial court holds that, for the purposes fee shifting under § 998, Defendant 1—which served the offer—is a prevailing party. But Defendant 2—which didn’t serve an offer—is not. So only Defendant 1 gets to recover its post-offer costs. But it taxeed Defendant 1’s expert witness fees because under the cafeteria contract, those fees were indemnified by Defendant 2.


On appeal, the first point is easy. A defendant that doesn’t serve a § 998 offer and loses a net recovery at trial is not a prevailing party, in any sense of that term. But the trial court erred in taxing Defendant 1’s expert witness fees. The costs statute permits the award of costs incurred, even if not paid, and § 998 shifts incurred costs. A bunch of cases in the insurance context bear out that a plaintiff can recover expert witness fees, even if the bill was paid by someone else. So Defendant 1 should have recovered its expert witness fees, even if, at the end of the day, it wasn’t on the hook to pay them. The fact that the obliged indemnitor was also a defendant in the case and not, ultimately, a prevailing party on its own, didn’t make a difference.


Reversed in part.

Thursday, July 2, 2015

It's Like There Was a Contest to Pick the Most Awkward Neologism

West v. Arent Fox LLP, No. B255973 (D2d5, as modified Jun. 26, 2015)

A SLAPPback—yes, this ugly-looking half-capped term actually shows up in a statute—is an action for malicious prosecution brought against someone who previously prosecuted an action that was dismissed as a SLAPP under Code of Civil Procedure § 425.16. Because the Legislature decided it furthered the purpose of the anti-SLAPP protections to permit these kinds of suits, even though they themselves would invariably draw an anti-SLAPP motion, it passed § 425.18 to make it harder, but not impossible, to attack a SLAPPback with an anti-SLAPP motion. 


So § 425.18(c) exempts a SLAPPback from some of the more procedurally onerous parts of § 425.16, such as the discovery stay, the timing provisions, and the shifting of attorney fees. In instances where the motion is denied or only partially granted, § 425.18(g) also replaces the immediate right to appeal under §§ 425.16(i) and 904.1(a)(13) with a more limited writ review that must be sought within twenty days. That rule applied here, because the trial the court granted an anti-SLAPP motion and struck claims that everyone agreed were SLAPPbacks, but did not dispose of the whole case. Since plaintiff did not timely seek a writ, but instead filed a notice of appeal after the twenty days had run purporting to claim appellate jurisdiction under §§ 425.16(i) and 904.1(a)(13), there’s no jurisdiction to hear this case.

Appeal dismissed.

SJ Affirmed, but Likely No Costs

Roman v. BRE Properties, No. B246841 (D2d7 Jun. 17, 2015)

It’s probably not too surprising that in order to bring a claim for disability discrimination, Plaintiff needs to establish that he is disabled within the meaning of the statute. When, in this case, Defendant served discovery asking for evidence of Plaintiffs’ disability, Plaintiff didn’t respond. That nonresponse was sufficient to meet Defendant’s burden when moving for summary judgment. And then when Plaintiff’s opposition offered nothing but his wife’s conclusory statement that she had previously told Defendant he “was disabled,” that wasn’t enough to create a disputed fact issue. So SJ was properly granted.


But the trial court erroneously awarded costs to defendants because it didn’t apply the heightened Christiansburg standard that the Supreme Court’s recent decision in Williams held applies to cost awards in FEHA cases. So the award was reversed and remanded for the trial court to decide whether the Christiansburg standard was met, and if not, what costs could be allocated entirely to claims other than those brought under the FEHA, for which costs could be awarded under the ordinary prevailing party standard under Code of Civil Procedure § 1032.


Reversed and remanded in part.