New Claim, New Clock

Starview Property, LLC v. Lee, No. B292245 (D2d8 Oct. 17, 2019)

Plaintiff in a land dispute case pleads three causes of action. Some of the facts (kind of tenuously) might implicate the anti-SLAPP statute. But the defendant doesn’t move. Then, well after the 60-day window under Code of Civil Procedure § 425.16(f) to file an anti-SLAPP motion has run, plaintiff amends the complaint to add two new claims based on different legal theories. They are, more or less, based on the same facts as were alleged in the first complaint. This time, defendant moves to strike. 

But the trial court denies the motion as untimely because the essential facts were alleged in the first complaint. The Court of Appeal reverses. This case is basically the converse of the Supreme Court’s decision in Newport Harbor II, which held that an amended complaint doesn’t restart the §425.16(f) clock for claims that were originally plead, only newly added claims. Here, the claims are new, but the facts are not. The court says that doesn’t make a difference because you can’t move on claims that aren’t yet plead. Since the “arising from” test depends on how the facts relate to the elements of the claims, it makes sense that the clock for such claims can’t run untill they are alleged. The Court declines to weigh in on the merits of the motion, other than to decide it was timely. 

Reversed.

The Other Lee v. Silveira Is a SLAPP

Lee v. Silveira, No. D068835 (D4d1, Dec. 8, 2016)

When I first skimmed the opinion in this case, I thought it was another bad opinion along the lines of Nunez, applying the anti-SLAPP statute to a declaratory relief case just because the evidence of a live legal controversy existed consisted of protected speech. But I was mistaken.

A Law Licence Is Necessary, But Not Sufficient, to Invoke CCP § 340.6

Lee v. Hanley, No. S220775 (Cal. Aug. 20, 2015)

Code of Civil Procedure § 340.6 provides a one-year-from-discovery statute of limitations in an “action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services[.]” As reported here, here, here, here, here, and here, there is a longstanding split of authority over how broadly to read the statute, particularly with respect to certain torts that, if committed by anyone other than an attorney, might have a much longer limitations period. 

Some courts have read the statute literally, to include, for instance, a malicious prosecution action against a lawyer. Others, including the case on review here, have looked to the spirit of the statute and limited its application to cases of attorney professional negligence. The California Supreme Court stepped in to resolve the split.

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.

Affirmed.

Collecting on a Big Foreign Judgment

Hyundai Securities Ltd. v. Lee, No. B257276 (D2d5, as modified Jan. 14, 2015)

Mr. Lee, a former officer of Hyundai, got tagged with a $24 million judgment, based in part on a Korean court's ordering him to indemnify the company for certain criminal fines it paid due to his conduct. The judgment carries post-judgment interest at the rate of 20 percent—the statutory rate for Korea. About $5 million in principal and $3 million in interest remain, and Hyundai is now trying to collect in California.

So Hyundai filed an action to have the judgment recognized under the Uniform Foreign Country Money Judgments Recognition Act, Code of Civil Procedure § 1713–24. In a prior appeal, the court held that, procedure-wise, a foreign country judgment can’t be domesticated by a simple petition; its validity needs to be recognized through trial or on summary judgment. So on remand, Hyundai did just that. The trial court found the judgment enforceable, including the accrued Korean interest, plus 20 percent interest going forward.

Lee raises three issues. First, he says that a California court should not have enforced the judgment under § 1715(b)(2), which excludes fines or other penalties from the scope of the Act. The gist of the provision is that the judiciary generally isn’t in the business of enforcing the public law, and in particular, the penal law, of other countries. So Lee says that since Hyundai's underlying liability that he is stuck with indemnifying was a criminal fine levied by the Korean government, a California court shouldn’t enforce that against him.

But the court here doesn’t agree. Although the judgment might be requiring Lee to compensate Hyundai for damage it incurred by being fined, it was nonetheless a civil damage award in favor of a private party. Nothing in the case law or legislative of either the California Act, the promulgated Uniform Act, or in other states’ enactment of the Act says otherwise. Indeed, the weight of the authority suggests that the rule is meant to address situations where the sovererign itself is the judgment creditor.

Second, Lee says that the accrued Korean interest should not have been awarded. Generally, a party attempting to enforce a foreign judgment gets the same kind of post-judgment interest that a party enforcing a sister-state judgment would, § 1715, and for prior to the recognition of the judgment by a California court, that means the rate of interest under the law of that state, § 1710.25(a)(2). But Lee says 20 percent is “repugnant to the public policy of this state or United States,” and thus unenforceable under §1716(c)(3). In particular, Lee points to the 10 percent cap on post-judgment interest in Article 15 § 1 of the state constitution. But the fact that the Korean statutory rate is twice the state cap is not so offensive to public policy to make it repugnant under the standard of the Act. Repugnancy is a high bar, reserved for practices such as those that are injurious to public health, offensive to individual rights, or that undermine the administration of law. Double interest just isn’t enough.

Finally, Lee argues that the court should not have awarded prospective 20 percent interest on the now-domesticated judgment. This one bears fruit. As noted, § 1715 adopts the sister state standard for foreign judgments. Under § 1710.25, once a sister state is domesticated, the court applies California’s 10 percent interest rate to the domesticated judgment going forward. The idea is that the new interest wasn’t part of the original Korean judgment, but a new merged California judgment that should carry California interest.

Which brings up a point. If you have a foreign or sister state judgment that carries interest over 10 percent, it probably doesn't make sense to domesticate it until you are on the verge of being able to collect. Otherwise, you are giving money away.

Reversed in part and remanded.

Stealing from Clients Is Not Professional Services

Lee v. Hanley, No. G048501 (D4d3 as modified,* August 8, 2014)

When you sue your attorney for refusing to return unused fees, what statute of limitations applies?  Is it the one-year limit in § 340.6, which applies to actions against attorneys alleging “a wrongful act or omission, other than for actual fraud, arising in the performance of professional services?” Or is it the longer periods that would ordinarily apply to claims for torts or breach of contract? The court notes a deep split in authority surrounding § 340.6, including several  recent cases. 

There are two broad approaches. One—bolstered by the legislative history, and general fairness—holds that § 340.6 applies to malpractice cases, not to garden variety torts committed in the course of practicing law. The other—taking a more literal reading—applies the statute broadly, to any claim, in tort or contract, arising from acts an attorney performs in his professional capacity, except for fraud.

The court here hedges a little, although it appears to adopt the second take. But it then nonetheless holds that § 340.6 does not necessarily apply. The court says “[i]f the wrongful act or omission at issue does not arise ‘in the performance of professional services,’ the statute is inapplicable.” Reading the complaint liberally, the facts suggest some theories that don’t implicate the attorney’s professional services. In particular, the court seems to think a conversion claim could steer clear of § 340.6. Of course, plaintiff didn’t plead conversion. Even so, she pleaded facts sufficient to allege it. And since demurrers attack facts and not labels, that is enough to for plaintiff to win a reversal in this appeal.

Reversed.

*On the parties’ petitions for rehearing, the court made some modifications that made the opinion a little less ambiguous. 

**Note: Given the split of authority, it is perhaps unsurprising that the Supreme Court granted review on October 1, 2014.