Wednesday, June 29, 2016

I Thought We Covered This Already

Rand Resources v. City of Carson, No. B264496 (D2d1 May 31, 2016)

Plaintiff in this case alleges that the City of Carson breached its agreement with his company to make him its exclusive agent to negotiate Carson’s (unsuccessful) effort to lure an NFL team to the City. He also claims that the other agent the city supposedly dealt with interfered with his contract. For some inexplicable reason, the City managed to convince the trial court to dismiss the case as a SLAPP.

The Court of Appeal shows a lot of patience in reversing. Because the whole thing boils down to one key point: Just because speech about a controversy can be evidence does not mean that the claim arises from that speech. Public discussion of a redevelopment plan is protected activity. Breaching a redevelopment contract is not. That is the case even if in proving the breach of contract, some evidence regarding what was said about the plan in public fora is relevant evidence. As the court explains, the anti-SLAPP statute is not implicated when any protected speech is “merely a reference to a category of evidence that plaintiffs have to prove the elements of their claims, including interference and damages, not the gravamen of the cause of action.”


Tuesday, June 28, 2016

Not Wrong Enought to Be Arbitration-Wrong

Baxter v. Block, No. A144112 (D1d1 May 24, 2016)

Attorney and Clients arbitrated a fee dispute under the Mandatory Fee Arbitration Act. The Arbitrator awarded $0, finding that Attorney’s services were worth less than he had billed. They were, instead, worth a lesser amount, which just happened to be exactly what Client had paid. 

But Clients hadn’t paid as much as the Arbitrator thought. He apparently relied on a mistaken document. Attorney noted the mistake. And Clients, to their credit, basically admitted it. But the Arbitrator refused to modify his award.
Attorney moved to vacate the award; Clients to confirm it. Clients also asked for their fees on confirmation, based on a fee provision in the retainer agreement. In addition to the payment mistake, Attorney claimed that Arbitrator had failed to disclose that a bunch of his recent work entailed auditing legal bills, which is Attorney claims is a significantly pro-client job for a fee arbitrator that it merited disclosure. The trial court refused to vacate the award on wither grounds and gave Clients their fees, although he cut their fee counsel’s hourly rates and hours significantly.

The court publishes its opinion only on the disclosure issue and the fee calculation. So far as the bill auditing (non-) disclosure goes, the record showed the arbitrator did a bunch of different consulting work around the issue of attorney fees. Some on the client-side like bill auditing. But also some on the attorney-side like testifying about reasonable rates for fee applications. His expertise was thus in billing issues in general, not in representing one side or another in fee disputes. Which meant his consulting work didn’t cause him to have a particular economic incentive to go one way or the other or to rule a certain way to garner the favor of future clients. Because the consulting didn’t create any reasonable doubt about the arbitrator’s impartiality, the judgment could not be vacated for failure to disclose, or to otherwise provide a grounds for disqualification.

And on the fees, Clients’ two attorneys billed Client—and Client sought fee recovery—at the same hourly rate. Both had roughly the same pedigrees and experience. Yet, the trial court gave only one of them a substantial rate cut without any explanation. The court finds this to be an abuse of discretion and sends the case back for an explanation. But it affirms the hours cut, deferring to the trial court’s judgment that the time billed was excessive for a motion to confirm an arbitration award. Such judgment can only be reversed if it is “clearly wrong,” which it wasn’t here.

Reversed in part.

Monday, June 27, 2016

In Split Verdict, Costs Award Cannot Be Formulaic

Charton v. Harkey, No. G050514 (D4d3 May 24, 2016)

Plaintiffs in an investment fraud case won against three Defendants but lost against one other. The prevailing Defendant seeks her costs under Code of Civil Procedure § 1032. No one disputes that this Defendant is the prevailing party under § 1032. But Plaintiffs contend that she is too closely aligned with the losing defendants to be permitted to recover her costs. The trial court rejected that argument, but permitted the moving Defendant to recover only 25 percent of her costs, reasoning that the costs should have been evenly apportioned across both the winning and losing Defendants.

The Court of Appeal agrees on the first point. While some old cases discuss that a prevailing defendant that is closely aligned with one found liable can be deemed a non-prevailing party, those cases were based on an old version of § 1032, which was repealed in 1986. Under the current version of the statute, a defendant against whom no relief is ordered prevails, and is entitled to costs as a matter of right. Full stop.

But as to the apportionment of costs, the court did err. It could not just mechanically say that since one of four defendants won, that Defendant gets 25 percent. Instead, the court should have asked whether: (1) the costs were actually incurred by the prevailing Defendant, (2) they were reasonably necessary to that Defendant’s conduct of the litigation; and (3) they were reasonable. If those tests are met, the costs are recoverable even if they might also have been useful to one of the non-prevailing Defendants. The trial court’s rough justice wouldn’t cut it.


Justice Bedsworth Pulls a Columbo

Bower v. Bower, No. G050468 (D4d3, as modified, May 15, 2016)

Another one where I don’t have much to say. But Justice Bedsworth’s modified opinion adds a quip at the beginning with a quote from Lord Kelvin—he of the negative 273 degrees fame. Not sure I have ever seen an opinion modified to do that before.

Thursday, June 23, 2016

Monday, June 20, 2016

Can't Prove a Negative on Appeal Without a Reporter's Transcript

Elena S. v. Kroutik, No. D068831 (D4d1 May 18, 2016)

Like last years Michaels case, this case involves a superior court policy of having commissioners resolve family court restraining orders. Respondent objects to the reference and claims he didnt consent. But unlike in Michaels, there’s no record of the oral proceedings in the trial court, even though the proceedings were, in fact, reported. Respondent apparently decided to proceed without a reporter’s transcript.

That creates a problem because anything during the oral proceedings that might support an affirmance is simply presumed to have occurred. Including an on-the-record oral stipulation to proceed before the commissioner. 

The Court also half-heartedly suggests it would affirm on an implied waiver ground as well. By participating in the hearing, says the court, the defendant implicitly consented to proceeding before the commissioner. The court notes that that theory doesn’t entirely make sense, but feels like it is bound by a 1991 Supreme Court decision that relied on that logic.


Thursday, June 16, 2016

Dead Lawyer's Firm Is Not a Proper Doe

McClatchy v. Coblentz, Patch, Duffy & Bass, LLP, No. A144391 (D1d5 May 10, 2016)

Lawyer, since deceased, was the trustee of a trust to which Plaintiff was beneficiary. Way back in 2012—two years after Lawyer had already died—Plaintiff sued Lawyer for mismanaging the trust. He included several so-called doesallegedly unknown parties sued under fictitious namesas defendants. 

Two years into the case, Plaintiff moved under Code of Civil Procedure § 474 to substitute Lawyer’s Firm in for one of the fictitiously named defendants, based on the theory that he had just learned that Lawyer service as trustee was performed in his capacity as a partner of the Firm. The Firm moved to quash service, alleging that adding it as a doe was inappropriate because it was not properly named as a party in the complaint. According to the Firm, Plaintiff knew the essential facts giving rise to its alleged liability way back when he filed his case. Trial court agreed with the Firm and quashed service. The Court of Appeal affirms.

To amend to swap in a new defendant for a doe after the SOL has run, Plaintiff needs to show he was ignorant of the essential facts at the time he sued and named does. But here, there was substantial evidence that Plaintiff knew Lawyer was acting in partner capacity all along. Notably, for several years prior to the filing of the complaint, correspondence between Lawyer and Plaintiff came from Firm’s address, on its letterhead. Hard to say the trustee operation was freelance. So under the circumstances, substantial evidence supported the trial court’s ruling.

The court goes on to note that, because it is addressing only a motion to strike based on service, the Firm is not necessarily is the clear. Plaintiff can, if so inclined, get leave to amend to add the Firm, but to do so, Plaintiff will need some non-time barred claims to allege.


Wednesday, June 15, 2016

Not Quite Ex Parte McCardle . . .

Gerwan Farming v. Agric. Labor Relations Board, No. F069896 (D5 May 9, 2016)

Interesting case that deals with when the Legislature can bypass the superior courts and provide for a direct review by an appellate court of an administrative decision. 

Vexatious Litigants Don't Need Pre-Filing Leave When They Get Sued

John v. Superior Court, No. S222726 (May 5, 2016).

Code of Civil Procedure § 391.7 permits a court to enter an order requiring a pro se litigant deemed to be vexatious to get pre-filing permission before “filing any new litigation in the courts of this state.” “New litigation” has been read to include appeals from trail court cases where the vexatious plaintiff lost. The cases, however, have generally focused on pro se plaintiffs. (It is plaintiffs, after all, who generally “file new litigation.”) But if “new litigation” includes appeals, what happens when a vexatious litigant gets sued, loses, and tries, pro se, to appeal? Does she still need pre-filing permission to appeal? The authority on this issue is apparently unclear, so the Supreme Court granted review to settle it.

In a unanimous decision by Justice Chin, the Court notes that the statutory scheme generally reflects a Legislative understanding that a vexatious litigant is a pro se plaintiff. In particular, the statutes repeatedly refer to a “defendant” as the vexee, not the vexor. While repeated amendments made clear that the rule applied to opening new appeals, they nonetheless appear consistently premised on the idea that the vexatious appellant is a plaintiff too. So the answer to the question is no. No permission is required.


Tuesday, June 14, 2016

The Downside of Ignoring in Limine Rulings

Osborne v. Todd Farm Serv., No. B260280 (D2d6 May 2, 2016)

Plaintiff was injured when an allegedly defective hay bale she was standing on fell apart. She sued two Defendants—the Supplier and a company she claimed had manufactured the bale. None of the records in the case identified the source. And while there are apparently features of hay bales that would clue one into where they were manufactured, that would require expert testimony. Plaintiff, however, didn’t timely disclose a hay source expert under Code of Civil Procedure § 2034.260. She instead waited and designated herself as a “supplemental” expert under § 2034.280. But as Fairfax v. Lords, 138 Cal. App. 4th 1019 (2006) explains, that’s a no-no. You can’t sandbag in disclosing experts as “supplemental” if you had every reason to anticipate that they would be needed in at the time of the original disclosures. So the trial court struck her designation.

Monday, June 13, 2016

A Fair Report Can Include Some Self-Promotion and Puffery

J-M Mfg. Com. v. Phillips & Hohen LLP, No. B256927 (D2d7 May 2, 2016)

After they prevailed in the liability phase of a bifurcated trial, Plaintiffs’ attorneys in a qui tam case issued a press release trumpeting their victory. The losing Defendant, a pipe company, sued Attorneys for defamation and trade libel. It alleged that Attorneys mis-described the issues decided by the jury. According to PipeCo, while the jury might have found that all the pipe it sold to the government might not have met certain certified quality standards, the jury did not find any of the pipe to be actually defective, contrary to what the press release said.

Thursday, June 9, 2016

Tax Return Privilege Overriden to Prevent Fraud

Li. v. Yan, No. A144994 (D1d2 May 2, 2016)

This is a collections case. Like most collections cases that progress to an appeal, the facts are convoluted and difficult to follow. But the court’s rulings aren’t. First, when the debtor is subject to a judgment debtor exam, the creditor doesn’t need to personally serve a subpoena demanding that he bring docs to the exam. Service in the same manner as applies to pre-judgment party discovery (e.g., mail service to counsel) will suffice.

Second, although California recognizes a privilege against the discovery of tax returns, it can be overridden in difficult collection cases by a “public policy greater than that of the confidentiality of tax returns.” To wit, the “policy is to prevent fraud against creditors. And against lenders. And perhaps against the court.” The record here showed that debtor had engaged in a bunch of pretty egregious conduct designed to frustrate the collections process. Under the circumstances, the court finds the privilege overridden.

Tuesday, June 7, 2016

Having a Bankrupt Co-Fraudster Doesn't Get You Off the Hook

Patel v. Crown Diamonds, Inc., No. G051439 (D4d3 Apr. 29, 2016)
A bunch of guys and their company allegedly swindled a Widow out of her money. One of the guys went BK and had all his debts discharged, over Widow’s objection. But the others didn’t go BK. Nor did their company. The widow sued them for fraud. Defendants moved for sanctions, claiming that the case was frivolous because the rejection of Widow’s objection to the discharge of BK guy’s debts barred the claims under res judicata. For some crazy reason, the trial court agreed, struck plaintiff’s complaint, and awarded Defendants over $12k for their fees.

The Court of Appeal reverses. A discharge against one party to a multi-defendant tort does not discharge the others unless they are in privity. And as the Supreme Court recently explained in the DKN case, ordinary joint tortfeasors like co-fraudsters are not in privity for preclusion purposes. If three guys commit fraud and one of them gets out—whether by discharge in BK, settlement, release, or judgment—res judicata doesn’t bar claims against the others. Nor would collateral estoppel apply because there was no common issue decided adversely to Widow’s claim in that proceeding.


Public Records Are Not Supposed to Be a Profit Center

Cal. Public Records Research, Inc. v. County of Stanislaus, No. F070601 (D5 Apr. 28, 2016)

Section § 27366 of the Government Code says that counties can charge a rate for the copying of public records sufficient to cover their costs. Stanislaus County charges three bucks for the first page, and two for each page thereafter. There is, however, no evidence that it actually costs that much to fulfill a public records request. So the Court of Appeal reverses a trial court’s dismissal of an administrative mandamus case and remands for the trial court to see what the evidence actually is.


Monday, June 6, 2016

A History Lesson, Part One

Friends of Maritn’s Beach v. Martin’s Beach 1 LLC, No. A142035 (D1d2 Apr. 27, 2016)
The dispute is about the right of public access to tidelands. It has basically nothing to do with California Civil procedure. But it turns on the interpretation of the Treaty of Guadalupe Hidalgo, which is kinda awesome.

Sunday, June 5, 2016

"I Can Do Whatever the F@%k I want. I’m a Super Lawyer!"

Abuemeria v. Stephens, No. B264542 (D2d6 Apr. 27, 2016)

Justice Gilbert starts off this opinion with a little flair:

The parties in this case are neighbors. Appellants ignored Rodney King’s famous entreaty. Instead of getting along, they initiated events resulting in a brawl with respondent.

Wednesday, June 1, 2016

Three Generations of Vex Is Enough

Goodrich v. Sierra Vista Regional Med. Ctr., No. B259726 (D2d6 Apr. 27, 2016)

Plaintiff, pro per, keeps trying to re-litigate the denial of a writ of administrative mandamus in which she unsuccessfully sought to challenge a hospital’s termination of her staff privileges. (Notably, she never appealed the initial denial.) On her second go at it, the trial court warned her that any more meritless filings could result in her being declared a vexatious litigant. She nonetheless did it again. So the curt made good on its word. It found that Plaintiff was a vexatious litigatant
, under Code of Civil Procedure § 391(b)(2) and (3), and required her to post a $25k bond and obtain pre-filing leave before filing any more motions or actions.

The Court of Appeal affirms over a substantial evidence challenge. Under § 391(b)(2), one way to be a vexatious litigant is to repeatedly attempt to relitigate an issue or claim that has been finally determined against the person. Plaintiff contents that “repeatedly” requires more than three. But the court—relying on dicta in Morton v. Wagner, 156 Cal. App. 4th 963 (2007)—holds that three can be enough. So long as the record supports that “repeatedly relitigating issues previously decided in [a prior] judgment unreasonably burdened both [the opposing party] and the court, which had to expend time and other resources addressing the motions and appearing at unnecessary hearings.” Which was the case here.

For belt and suspenders, the court also affirms the finding under § 391(b)(3), which alternatively defines a vexatious litigant as one who “repeatedly files unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, or engages in other tactics that are frivolous or solely intended to cause unnecessary delay.” Filing repeated and fruitless motions to collaterally attack a final judgment meets that standard. Particularly when Plaintiff continued to do so even after being admonished by the trial court.