Tuesday, May 31, 2016

Thank You, the Tentative Stands.

FWIW, this is 111 N. Hill's 500th post!

Stanford v. Rasnick, No. A145904 (D1d2 Apr. 25, 2016)

Two Defendants in an auto accident case (a father and son) made a joint $130,000 offer under Code of Civil Procedure § 998. Or perhaps more accurately, their insurance company did. The offer was not allocated between Defendants and was conditioned on Plaintiff to entering a “written settlement agreement” Plaintiff didn’t take it. After adjusting for comparative liability and adding pre-offer costs, plaintiff won a recovery of $122kjust under the § 998 amount. Both sides sought costs and both moved to tax. The court agreed with Defendants on basically all counts. It found the § 998 offer was valid and thus Plaintiff could not recover his post-offer costs while Defendants could recover their post-offer costs, as well as their expert witness costs. It further taxed Plaintiff’s pre-offer costs, finding that his share of the cost of a mediator and certain attorney service charges were “not allowed.”

The Court of Appeal reverses on both points. So far as the § 998 offer goes, to be valid, it needed to be unambiguous. If accepted, it needs to be clear on its face as to what it is being offered and accepted. If collateral litigation might be needed to suss out the terms of the deal, the offer is not valid. 

Payment in exchange for a release is clear. But conditioning an offer on entering a “settlement agreement,” particularly one of terms unspecified, is not. Although Defendants contend that they made a “a standard, insurance defense offer,” the Court isn’t buying it. Just because a practice is common doesn’t make it correct. Simply put, Plaintiff can’t be put to accepting or rejecting a § 998 offer that includes entering a “settlement agreement” when he doesn’t know what the terms of the settlement hearing are ex ante.

So far as plaintiffs’ costs go, neither mediation expenses or attorney service costs are “not allowed.” They are, instead, not automatic, but nonetheless awardable in the discretion of the court. The Court of Appeal makes the point of noting that in the extensive oral argument on the costs issue, plaintiff pointed this out and asked the court to explain any discretionary denial. The trial court’s response was curt “thank you.”* It then stood on the tentative. The Court of Appeal finds that was error because the trial court abdicated its discretion by treating the costs as categorically disallowed.

Reversed and remanded.

*The opinion notes that the oral argument on the motion was “quite lengthy” and seems exasperated—or at least puzzled—by the fact that Plaintiff sensibly pointed out some mistakes in the tentative and the trial judge did not so much as react. That, however, is not an uncommon occurrence so far as law and motion oral arguments in a California Superior Court goes. 

Indeed, given the low value many trial judges put on oral argument on law and motion matters, and the incredibly burdened dockets of the superior courts, I often wonder why they bother. Its not like—other than in some specific circumstances like summary judgment—a court is required to hold a hearing.  Nevertheless, unlike federal courts, which frequently rule without a hearing, California state courts basically always take oral argument. But if the court doesnt perceive any value in it, one would think that, in the aggregate, the quality of justice would likely improve were the court to just rule on the papers and put that time to some better use. 

Thursday, May 26, 2016

Easy Cases ...

Ryder v. Lightstorm Entm’t, No. B254922 (D2d8 Apr. 22, 2016)

This is mostly a case about the merits (or the lack thereof) of a Desny claim alleging that James Cameron stole the idea for Avatar from Plaintiff's idea for a film called KRZ. According to the court, he didn’t. But I don't blog on idea submissions cases, although I've done some in my time. There is, however, a single paragraph that deals with an interesting evidentiary issue.

Tuesday, May 24, 2016

Doctor, this One Was Clearly You

Espejo v. S. Cal. Permanente Med. Grp., No. B262717 (D2d4 Apr. 22, 2016)

In an employment dispute between a doctor and a hospital group, Hospital petitioned to compel arbitration based on an arb clause in Doctor’s employment contract. The arbitration question comes down to whether Doctor actually executed the agreement.

A declaration in support of Hospital’s original petition to compel attached the agreements containing the arb clause. The declaration said that Doctor had been sent hyperlinks to the agreements and required to sign them electronically. It was, however, rather vague about they way this process worked. But then—in response to the recently issued decision in Ruiz v. Moss Bros. Auto Group, Inc., 232 Cal. App. 4th 869 (2014), which addressed how to authenticate electronic signatures under Civil Code § 1633.7—the Hospital submitted a supplemental declaration providing additional detail on the mechanics of the e-signature process. The supplemental declaration was filed several days before Doctor’s opposition was filed.

Doctor challenged the petition with his own declaration that somewhat disputed the merits. He also moved to strike the supplemental declaration as untimely under Code of Civil Procedure § 1005(b), which requires motion papers to be filed sixteen court days before the hearing. The court agreed and struck the declaration. Then, relying on Ruiz, it found that the Hospital failed to sufficiently authenticate the e-signed arb contract, and denied the petition for lack of a binding agreement. Hospital appealed.

Hospital more or less concedes that its initial declaration doesn’t satisfy the Ruiz standard. So the whole appeal basically comes down to whether it was proper to strike of the supplemental declaration. There are two potential arguments for why it was error for the trial court to do so.

The easy one is that the declaration was a response to the post-motion-filing decision in Ruiz. Particularly since the trial court relied on Ruiz to deny the motion, it was only fair to permit Hospital to respond to new authority on a relatively first impression issue. Perhaps the trial court should have kicked the hearing and given everyone a little more time to address Ruiz. For some inexplicable reason, however, the Hospital never made the argument in its AOB. So it was forfeited on appeal.

The other argument deals with who bears the burden on authentication. If Hospital didn’t bear the burden to authenticate the e-signed docs in the first instance, doing so as an offer of proof on reply in response to an objection from Doctor would have been sufficient. And if it would have been fine to do it on reply, it follows that a supplemental filing provided before the opp even came in might have been early, but it clearly wasn’t too late.

So far as the burden goes, petitions to compel are a little different than ordinary motions. Some cases, based on § 1281.2 of the Code of Civil Procedure and Rule of Court 3.1330, hold that to petition to compel, you just need to come forward with a copy of the agreement. There’s no evidentiary obligation to authenticate the agreement from the outset. Even though, if challenged, the petitioner bears the ultimate burden. Under these cases, Hospital didn’t bear the burden to authenticate the contract in its opening papers. So the court erred in striking the supplemental declaration.

The court goes on to file that the supplemental declaration would have been enough to verify the e-signed agreement. The agreement in Ruiz didn’t make the cut because the moving party failed to come forward with any evidence that the signing of the agreement could be attributed to any volitional act by Mr. Ruiz. But here, the supplemental declaration showed that Doctor needed to sign in to a password-protected site. There was thus ample evidence that the arbitration contract was, in fact, e-signed by the Doctor himself and not by some other person.


Friday, May 20, 2016

Just Specific Enough...

Almanor Lakeside Villas Owners Assoc. v. Carson, No. H041030 (D6 Apr. 19, 2016).

This is a dispute between some property owners and their HOA. Which, true to form, means the case looks pretty ugly. The substance is specific to HOA cases, but there is an interesting issue regarding the role of a trial court’s statement of decision in deciding a bench trial. 

Tuesday, May 17, 2016

Third-Party Liens Do Not Absolve Payment Obligations

Karpinski v. Smitty’s Bar, Inc., No. A143381 (D1d2 Apr. 12, 2016)

A bar and its carrier agreed to a $40k settlement of a PI case brought by a guy who got roughed up pretty bad by two dudes that got drunk there. But the bar waffled on finalizing the settlement and paying up because a federal disability program and the California crime victim’s fund had filed liens on any judgment. The bar believed that until the lien issue was resolved, a judgment entered against it could get it sideways with the lienholders. But the settlement agreement specifically put dealing with the liens at the feet of the plaintiff. So when Defendant waffled about paying before the liens were resolved, Plaintiff moved to enforce the settlement under Code of Civil Procedure § 664.6, which provides an abbreviated procedure to enforce a settlement.

The Court of Appeal holds that resolving the liens wasn’t a condition precedent to payment. It further finds that the bar’s concerns about lien liability were it to pay Plaintiff on the settlement are not well-founded. By making sure the settlement agreement put the lien issue on the plaintiff, the bar satisfied its obligations to the lienholders and didn’t have any significant risk of liability to them.


Friday, May 13, 2016

A Deadline Applicable to Unicorns

Jones v. Superior Court, No. C080359 (D3 April 8, 2016).

The deadline for filing Code of Civil Procedure § 170.6 declaration to strike the judge depends on the kind of case and the kind of court you are in. In an independent calendar court—where a single judge gets assigned for all purposes—in a criminal case you need to file a strike within ten days of the notice of the assignment. (It’s fifteen in a civil case, but otherwise the same, which is why this opinion is of interest.) There’s an exception, however, for when a court only has one authorized judge. In those courts, you need to file within thirty days of an initial appearance, notice or not.

But the one-judge rule doesn’t see much use anymore. Since the unification of the superior and muni courts over a decade ago, every county has, at minimum, two authorized judges. Nevada County, the county at issue here, has six. See Gov’t Code § 69590.7. But the branch of the Nevada County superior court to which the case is assigned only has one judge. The government thus contents that the one-judge rule applies and the defendant’s strike was too late.

But that’s not right. The one-judge rule applies only to courts where there is only one authorized judge. The Government Code provisions that authorize judges of the superior court do not break the assignments down on a branch by branch basis. That’s more of a matter of internal court organization. So the one-judge rule does not apply when a multi judge court has only a branch has a single judge. Instead the general “all purpose assignment” rule should have applied.

And under that rule, a criminal case party has ten days to strike from a notice of the assignment or first appearance. Moreover, the clock runs from actual notice of the assignment. Because a fluke prevented Defendant in this case from getting notice that the judge had been assigned for all purposes until well after his first appearance, the deadline to strike was extended to ten days after the notice was given. Which made defendant’s strike timely in this case.

Writ granted.

Monday, May 9, 2016

Palmetto State Hail Mary Falls Flat in D2d6.

Hawkins. v. Suntrust Bank, No. B264541 (D2d6, on denial of rehearing, April 4, 2016)

Plaintiff’s South Carolina residence got judicially foreclosed on by a court there. She tried to challenge that by filing a wrongful foreclosure case against the bank in Ventura County. But under res judicata principles, the South Carolina judgment is preclusive. Plaintiff tries to argue that there was no personal jurisdiction in the South Carolina case, which would be a legit ground to avoid preclusion. Her problem is that the South Carolina judgment contains a factual finding that she was, in fact, served with a summons and complaint in the judicial foreclosure case. And she can’t attack that factual finding by filing a new case here.

Plaintiff further objects to the taking of judicial notice of the order containing the findings, but that fails too. Generally speaking, court documents are subject to judicial notice of their existence, but not for the truth of any statements contained in them. Here, the service finding in the South Carolina judgment is not significant because it proves that plaintiff was, in fact served. To the contrary, it is significant because it shows that the South Carolina court found she was served, which meets the test for the purposes of preclusion, regardless of whether it is ultimately true or not. 


Friday, May 6, 2016

Class Has So Little in Common that Demurrer Gets Upheld

Schermer v. Tatum, No. D067807 (Mar. 18, 2016)

Generally, its pretty tough to get class allegations dismissed at the pleading stage, and even harder getting that type of dismissal to stand up on appeal. But it happens sometimes. This is one of those cases.

The case is a class action brought on behalf of residents at eighteen different mobile home parks. The complaint alleged violations of the UCL, breaches of the covenants of quiet enjoyment and good faith and fair dealing and fraud. The allegations raised various and sundry abusive landlord-tenant practices, including forcing the residents to enter into unconscionable leases, although not all of the leases were the same, and the unconscionability was to be shown by some mix of eleven different factors set out in the complaint. Factors like “failing to provide all documents related to the lease until after expiration of the statutory review period.” On top of that, the parks had somewhat different ownership structures. 

If that doesn’t sound to you like the kind of stuff that is amenable to class-wide resolution, you aren’t alone. The trial court sustained a demurrer to the class allegations. When plaintiffs tried to fix the amended complaint, they did so by including twenty-one different subclasses, and claiming that defendants had a “uniform policy and procedure” to use some or all of the eleven factors in every least transaction. The trial court sustained another demurrer, explaining that the similarities in lease terms might show some commonality, but not enough to make class-wide litigation a superior vehicle. Plaintiff appealed under the death-knell doctrine.

The court of appeal notes that class allegations can be struck if the complaint fails to state facts sufficiently to show that class treatment is appropriate. But the court won’t credit contentions, deductions, or factual conclusion. Which is what the court thinks of the uniform class-wide “policy” allegation. It’s pretty clear from the actual facts that even assuming the parks employed some or all of the eleven factors, how those would affect the unconscionability analysis would depend on individualized interactions during the leasing process. So the fact that the parks had a “policy” of using certain shady tactics wasn’t common enough to merit class treatment.

Going through on a claim by claim basis, the court agrees that each cause of action can’t be brought as a class action. Plaintiff’s demand for restitution of excess rents under the UCL pretty clearly required individual treatment. The eighteen parks were in sixteen different cities, some of which have rent control and others of which to not. There was no feasible way to measure restitution on a class-wide basis. The covenant claims deal with individualized interactions  between the tenants and the parks. And the common law fraud claim requires individualized proof of reliance. So in sum, there wasn’t even enough commonality to meet that element of the standard. The court didn’t even need to get to typicality or the superiority of proceeding on a class basis.


Monday, May 2, 2016

Caveat Venditor!

Loving v. Provide Commerce, Inc., No. B257910 (D2d3 Mar. 17, 2016)

This lawsuit alleges that some pictures on an online flower delivery service’s website violated Business & Professions Code § 17200 because the bouquets depicted in website photos required arrangement on delivery. (Yes, people sue about that sort of stuff in California all the time. Word is that it’s a good living.) The flower company had an arbitration policy in its online terms of use, but to get to them, a viewer needed to click on either its TERMS OF USE hyperlink, which plaintiff said he never looked at, or on a hyperlink in the email sent to confirm an order. Flowerco moved to compel arbitration but its motion was denied.

The Court of Appeal, relying on some recent Ninth Circuit cases, affirms. The decision turns on the different kinds of user agreements on the Internet. In one kind, called “clickwrap,” the user needs to check a box or otherwise manifest consent to certain terms of use as a condition of proceeding. In the other—“browsewrap”—the terms of use are in some form of notice that says by using the service you consent to the terms. Under the Ninth Circuit’s Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014), to compel arbitration in a browsewrap scenario, the web defendant needs to actually show that the customer viewed or had sufficient notice of the policy in order for it to be binding. Available hyperlinks somewhere on a browsed page aren’t enough.

Everyone agrees that this is a browsewrap scenario, because there’s no requirement for a user to check a box or something like that before proceeding. Absent that seemingly minuscule affirmative act, 
proof of contract formation becomes a tricky issue. The court here notes that the web-links to the policy in this case were pretty hard to find. And the links in the confirmation email were even harder to find, potentially requiring scrolling downward through pages worth of junk stuff. To the court, that isn’t enough to form an agreement that includes the linked provisions. But the court goes a little farther and states what purports to be a bright-line rule: For a browsewrap arb clause to be enforceable, there needs to be a conspicuous textual notice on the page itself that advises users that continued use of the website will bind the user to the TOUs. A hyperlink to a a page saying that won’t cut it.

And for essentially the same reasons, a browsewrap TOU venue provision requiring suit to be brought in San Diego County would not be enforced.