Some Deep Procedure

Paul Blanco’s Good Car Co. Auto Grp. v. Superior Court, No. A159623 (D1d5 Oct. 20, 2020)

This is a writ taken from civil enforcement action brought by the AG against some corporations for false advertising. There’s two clusters of issues, one that deals with trial court procedure, the other which deals with appellate procedure. Both are kind of interesting, if you are into that sort of thing....

The AG filed an unverified FAL complaint against Defendants. Under Code of Civil Procedure § 446(a), Defendants were nonetheless required to answer in a verified pleading. Defendants, however, filed an unverified general denial, citing an exception in § 446(a) for when “an admission of the truth of the complaint might subject the party to a criminal prosecution.” Because defendants were corporations without any Fifth Amendment right to remain silent, the trial court struck the answer. Defendants took a writ.

The Court of Appeal issued an order to show cause on the writ. A few weeks later, the trial court issued an order noting that the case had been reassigned to a new judge. It further set a hearing for the AG to explain why the court shouldn’t vacate the first judge’s order, given the OSC. The new judge subsequently vacated the first judge’s order and un-struck the answer.

So the gating appellate issue is, was the second judge’s order—issued after the OSC—valid? This brings to bear one of the more obscure aspects of writ practice in California—the difference between an OSC and an alternative writ. An alternative writ gives the trial court a choice between showing cause (which is actually shown by the real party) and changing its order. But an OSC “does not invite the trial court to change the ruling under review.”

Although a writ petition followed by an OSC does not deprive a trial court of jurisdiction to change its mind on interlocutory decisions, the Court here explains that it is a bad idea for a trial court to do so while an OSC is pending. The point of an OSC often is for the Court of Appeal to take briefing and reach a decision on an unresolved point of law. If the trial court’s reverses course while an OSC is pending, that raises mootness issues. And indeed, if the Court of Appeal’s first priority is to merely compel the trial court to change its mind, it has the alternative writ in its quiver to do so.

The court next addresses whether the new judge had the authority to reverse the first judge’s order. (Didn’t this just come up?) A trial court may, of course, revisit interim orders. But the authority to do so generally rests with the judge that made the order in the first instance. So appellate courts have developed the rule that a reassigned trial judge can’t revisit a prior judge’s order unless the first judge is no longer available. That’s not the case when a matter is merely reassigned. (The first judge here is still on the court—he didn’t die or retire.) So, the Court of Appeal finds that the second judge lacked authority to revisit the first judge’s order.

And since the revisited order was invalid, the Court of Appeal can reach the merits of the trial court procedure issue raised by the writ. (Which it seems like it really wants to do, FWIW). 

So far as § 446 goes, the question is whether the exception in § 446 for admissions that might lead to criminal liability applies to a corporate entity that does not have a right to remain silent. Although the AG draws the equation, the statute does not itself actually reference the Fifth Amendment or any of its state law equivalents. Nor is there any doubt that a corporation can be subject to criminal liability. So Court of Appeal goes with the plain language of § 446, which permits a corporate defendant to decline to verify its answer when doing so might subject it to criminal liability. That is backed up by the case law and legislative history.

Finally, there’s the issue of whether the defendant could file a general denial. Section 431.30 says you can’t make a general denial to a verified complaint. But the complaint here was not verified, even if a verified answer is required unless the exception in § 446 applies. As the court explains, § 446 gave the AG the option of verifying the complaint. But it did not elect to do so. And given that option, it does not make sense to treat any AG complaint automatically like it has been verified, such that a general denial cannot be made to an unverified AG complaint.

Writ granted.

Summary Judgment Notice Blues

Torres v. Design Grp. Facilities Sols., Inc., No. B294220 (D2d3 Feb. 13, 2020)

After Defendant filed a summary judgment motion, the Court gave Plaintiff a bunch of time to take discovery. The motion was ultimately denied. But some of what came out in the discovery was actually good for the Defendant. So it moved for reconsideration under Code of Civil Procedure § 1008, arguing that the new evidence that came to light after the SJ was filed merited reconsideration. The trial court granted the motion, agreed, and entered judgment for Defendant.

The Court of Appeal reverses. According to the Court, it was error for the trial court to permit Defendant to use § 1008 to sidestep the procedural protections of the summary judgment statute, § 437c. What defendant filed was, in effect, a new summary judgment motion. So it should have restarted the § 437c process instead of seeking reconsideration.

Reversed.

The Court here doesn’t mention it, but the reason this happened is because of the 75-day notice requirement for an summary judgment motion, which cannot be shortened without the parties’ agreement. Because you need to serve the file-ready version of the motion on the non-moving party so far out, there is not a good way to supplement the record with any evidence that comes out during the two months between the motion and when the opposition is due. So, faced with new information that came out after its motion, but before the hearing, Defendant here was stuck and then tried to fix it on reconsideration. But it seems like the better option would have been to withdraw the motion and refile it, to include the new evidence. If, of course, that was even possible given that an SJ motion also needs to be heard at least 30 days before trial.

Ils n'avaient pas besoin de dire dépeçage

Chen v. L.A. Truck Cntrs., S240245 (Cal. Jul. 22, 2019)

This PI case involving a bus accident. Plaintiff sued, among others, the Indiana-based Manufacturer of the bus and a California-based Dealer. His theory was the bus was defective because it was manufactured and distrusted without seat belts. The trial court first held that Indiana law—which was substantially less consumer friendly—applied. But then the manufacturer settled out. The trial court (now a different judge) refused Plaintiff’s motion in limine requesting a new ruling applying California law. Distributor won a split defense verdict.

The Court of Appeal reversed. The Court of Appeal held that the trial court was required to reconsider the choice of law ruling after Plaintiff settled with the Indianan Manufacturer. The original choice-of-law ruling was effectively a motion in limine, which is always provisional up to trial. So nothing stopped the Court from reevaluating the choice of law question, which would have had a different result without the presence of an Indiana defendant.

The Supreme Court granted review. In a short and unanimous opinion written by Justice Chin, the Court holds only that the Court of Appeal erred when it decided the trial court was required to reevaluate the choice of law question after Manufacturer settled. Given the importance of early resolution of choice of law issues in many cases, courts should not be required to reevaluate those decisions based on late developments in the procedural posture of a case. 

Moreover, neither party challenged the original choice of law determination on appeal. But both Defendants were in the case at the time of the original choice of law ruling. So if Plaintiff wanted to argue that California law applied to Dealer, even if Indiana law applied to manufacturer, it could have done so at that time.

The Court “underscore[s]” the narrowness of its ruling: “[W]e do not reach the question whether trial courts may revisit a prior choice of law ruling. Nor do we opine that there are no circumstances under which the trial court would be obligated to reconsider the choice of law. We hold only that, in this case, plaintiffs fail to demonstrate that their decision to accept a settlement offer from one defendant constitutes such an exceptional circumstance.”

Court of Appeal reversed.

Serial Discovery Abuser Gets Terminating Sanctions. And they Stick, for Once!

J.W. v. Watchtower Bible & Tract Society of N.Y., No. E066555 (D4d2 Dec. 10, 2018)

A Girl sued the Watchtower Society—the governing body of the Jehovah’s Witnesses—for its failure to prevent her from being molested by an elder of the Church. In discovery, she requested a copy of all correspondence received by the Church after it sent a letter to its congregations asking them to explain any occasions where persons known to have molested children were promoted to positions of authority with the Church. The Church claimed the documents were subject to the clergy-penitent privilege and that it would be unduly burdensome to search for them. The trial court disagreed and granted Girl’s motion to compel.

Sanctions Never Seem to Stick, Vol. 2,482 ...

Moofly Prods., LLC v. Favila, No. B282084 (D2d1 Jun 22, 2018)

Code of Civil Procedure § 1008(d) says that a party can get sanctions for an improper motion for reconsideration “as allowed by [§] 128.7.” Section 128.7(c)(2), in turn, says a court can enter sanctions, but only after it issues an order to show cause that describes the conduct and gives the offending party twenty-one days’ notice to show cause or to withdraw the offending filing. The twenty-one day window to withdraw the filing is referred to as a “safe harbor.” So the question here is whether § 1008(d)’s reverence to § 128.7 means to incorporate just the standard for deciding when something is frivolous or whether it incorporates the whole shebang of § 128.7’s procedures, including the safe harbor. 

The Court finds that § 1008 takes in §128.7 whole hog. Relying on Moore v. Shaw, 116 Cal. App. 4th 182, 199 (2004), which addressed a similar sanctions cross-reference in the anti-SLAPP statute, it holds that by referencing § 128.7, the Legislature meant to incorporate all of the sanctions regime, including the safe harbor procedure. Which basically means that if the court thinks a reconsideration motion merits sanctions, it can’t deny the motion and then issue an order to show cause. Because in that case, the motion can’t be withdrawn. The notice period for a motion is generally shorter than the safe harbor, so the court would need to take the reconsideration motion off calendar, or at least kick the hearing to give the safe harbor window and then address the merits and sanctions at the same time. 

Which, practically speaking, means that sanctions under § 1008(d) are basically never going to happen.

Reversed.

Sua Sponte, with a Side of Suggestion

Spector v. Spector, No. C084628 (D3 Jun. 4, 2018)

A family court in San Joaquin County overseeing the divorce of Rachelle and Phil Spector* ordered Phil to pay a certain amount of temporary spousal support. But after Phil’s attorney told the judge (in an email, cc Rachelle) that the ordered support exceeded his cash flow the Court decided to “sua sponte” reconsider and reduce the obligation. Wife objects—and because support orders are immediately appealable—appeals.

Rescission Switcharoo . . . .

Guan v. Hu, No. B276546 (D2d1, on rehearing Feb. 7, 2018)

Told you this one was weird. 

Qu'est-ce que le dépeçage?

Chen v. L.A. Truck Cntrs., No. B265304 (D2d8 Jan. 18, 2017)

Some tourists were killed or injured in a tour bus crash on the way to the Grand Canyon. Plaintiffs sued the Bus Driver, the Tour Company, the Dealer that sold the bus to the Tour Company, and the Manufacturer that built the bus. There’s not much dispute that Driver was at fault for speeding and swerving off the road and that a substantial factor in Plaintiffs’ injuries (including two deaths) was that the bus didn’t have passenger seat belts. 
 
Plaintiffs are Chinese nationals. Manufacturer is from Indiana, where the bus was assembled. Dealer, Tour Company, and Driver are from California. But the bus was delivered to the Tour Company in Nevada. And the accident occurred in Arizona. Which all sets up a bar-exam-quality choice-of-law problem.

CCP § 473(b) Covers a Default from Failure to Pay Transfer Fees.

Gee v. Greyhound Lines, Inc., No C077077 (D3 as modified December 6, 2016)

When Plaintiffs case was transferred from Sacto to Fresno counties on motion of Defendant, she was—possibly erroneously—ordered to pay the transfer fees under Code of Civil Procedure § 397 or 399.* But when the case landed in Fresno, her lawyer never tendered the fees. Defendant moved to dismiss under § 399(a), which permits a court to dismiss an action with prejudice if fees go unpaid for 30 days. Plaintiff didn’t file an opposition or respond to the tentative (which was to grant) and the case was dismissed. 

Getting to the Merits

Austin v. LAUSD, No. B258406 (D2d7) 

The trial court in this employment dispute granted the employer’s summary judgment motion, which plaintiff failed to timely oppose. Plaintiff filed an untimely pro se motion for reconsideration, explaining, among other things that there was additional evidence and that she had been abandoned by her attorney. The trial court recognized that the relief sought potentially implicated a discretionary relief from default under Code of Civil Procedure § 473(b). But because the motion papers were not sworn under penalty of perjury, the court found § 473(b) to be procedurally inapt. After a number of delays for plaintiff to obtain new counsel, plaintiff’s new lawyer filed a correctly formed § 473(b) motion. But by that time, the six-month limit for discretionary relief had run, so the trial court found that any relief from the default was foreclosed.
 
The Court of Appeal agrees that it is appropriate to treat the untimely reconsideration motion as a motion under § 473(b). The moving papers gave the defendant sufficient notice of the relief sought, so it was not unfair for the court to so construe the motion. But the trial court erred in finding that a penalty of perjury requirement applied. 

Indeed, in 1981, § 473(b) was specifically amended to explain that “[n]o affidavit or declaration of merits shall be required by the moving party.” It was thus plain error for the court to deny the motion on that ground. Because the motion and the evidence submitted with it made at least a colorable claim of excusable neglect under § 473(b), the trial court would have had the discretion to grant the motion, had it reached the merits. Thus, the rejection on the motion based on a non-existent procedural hurdle was prejudicial error, meriting reversal.
 
The court further notes that plaintiff substantially complied with § 473(b)’s requirement that an application “shall be accompanied by a copy of the answer or other pleading proposed to be filed therein[.]” Although she didn’t serve an opposition to the summary judgment motion, her “reconsideration” papers contained essentially the information and arguments that would be included in an opposition. Given the plaintiff’s good faith, the policy in favor of deciding cases on the merits (and, although the court doesn’t come out and say it, the sympathetic posture of a litigant abandoned by her attorney) that was sufficient to meet the requirement. So the court reverses and remands for the trial court to consider the § 473(b) motion on the merits in the first instance.
 
Reversed and remanded.

Consitutionally Required Mulligans, for Some

Marshall v. Cnty. of San Diego, No. D063675 (Jul. 22, 2015)

Section 437c(f)(2) of the Code of Civil Procedure says that “a party may not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court, unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.” Seems pretty clear. If you move and lose, you don’t get to move again, without new evidence or law.

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.

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.

So Much for Rule of Court 8.1125(d) (and Some Thoughts on Stare Decisis from Judge Wiley)

Farmers Insurance Exchange v. Superior Court, No. B24901 (D2d3 July 23, 2013)

Does the Supreme Court’s subsequent depublication of a key authority relied upon by a superior court constitute a “change in law,” such that the court can reconsider its order under Code of Civil Procedure § 1008(c), even though the order is outside the ten-day window for a party to move for reconsideration under  § 1008(a)? Apparently it does.