Justia California Court of Appeals Opinion Summaries

Articles Posted in Legal Ethics
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Defendant-appellant John-David Gonzales (Gonzales) appealed trial court orders that led to the disbursement of settlement funds to respondents Michael Silvers, a law corporation (Silvers), Panish, Shea & Boyle (PSB), Michael W. Jacobs, Case Advance (CA), Nexus Physical Therapy, and Everence Association, Inc. (Silvers, PSB, Jacobs, CA, Nexus, and Everence were collectively referred to as lienholders). Defendants Gonzales and lienholders were named as parties in an interpleader action filed by plaintiff, respondent, and stakeholder Gregory Hood (Hood). Hood filed this action to resolve the competing claims of defendants to funds from the settlement of Gonzales v. Sears Holding Corporation et al., San Diego Superior Court case No. 27-2014-00040057-CU-PL-CTL (“the personal injury action”), which litigation was filed by Silvers in November 2014 after Gonzales was hurt in a bicycle accident. Gonzales in July 2015 agreed in writing to have PSB associate in as counsel. Silvers/PSB settled a portion of the personal injury action for $100,000. After Silvers/PSB withdrew as counsel of record in the personal injury action, Gonzales retained Jacobs, who obtained an additional settlement of $299,999.99 pursuant to an offer to compromise. Gonzales, however, refused to sign the settlement agreement and endorse the settlement check, terminated Jacobs as counsel, and retained Hood for the " 'determination and distribution' of the settlement funds." Despite his promise to do so, Gonzales again refused to endorse the settlement check. Within days after retaining Hood, Gonzales terminated him as legal counsel. In response, Hood informed Gonzales that, if he did not promptly retain new counsel to allow for the transfer of the settlement check and other settlement funds in Hood's possession, Hood would file an interpleader action, based on Hood's concern there were multiple claimants to the settlement funds and the settlement check would "expire" and not be honored by a bank. In anticipation of a hearing, the lienholders stipulated to a proposed distribution of the settlement funds among defendants. At the hearing, Gonzales (through his fifth attorney of record) agreed with the amounts owed to Silvers, PSB, and CA under that stipulation. Gonzales, however, disputed the amount sought by Jacobs, Nexus, and Everence. He also disagreed with the court's September 14 elisor order awarding costs and fees to Hood. For the most part, the Court of Appeal found all of Gonzales arguments “unavailing,” and affirmed. View "Hood v. Gonzales" on Justia Law

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The website, www.legalmatch.com, connects individuals to lawyers, based on an intake form and client specifications. LegalMatch represents that it “does not screen or vouch for any of its users” and does “not imply an endorsement of any subscribing attorney or service …. LegalMatch does not screen individual cases or otherwise channel potential clients to select attorneys.” Only subscribing lawyers associated with the location and category selected by the potential client can affirmatively reach out to the individual. Lawyers and clients negotiate the parameters of their attorney-client relationship. The number of lawyers in a geographic location and category of legal expertise is limited by an algorithm that maintains LegalMatch’s profitability by balancing the number of clients and lawyers available. Potential clients use the site for free. LegalMatch receives no fee for the formation of an attorney-client relationship. When LegalMatch sued attorney Jackson to recover unpaid subscription fees, Jackson argued that LegalMatch was an uncertified lawyer referral service, in violation of Business and Professions Code section 6155. The trial court rejected Jackson’s argument. The court of appeal reversed. The act of referring is complete when LegalMatch routes a potential client to attorneys who match the geographic location and area of practice—regardless of whether LegalMatch exercises legal judgment on an individual’s issue before communicating that information to lawyers on its panel. View "Jackson v. LegalMatch.com" on Justia Law

Posted in: Legal Ethics
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Fireman’s Fund issued insurance covering property damage at Stephens's warehouse. Three days after the policy became effective, Stephens discovered that burglars stripped the property of all electrical and conductive material. Stephens filed an insurance coverage suit, retaining attorney O’Reilly who had a first lien to assure payment of fees. The trial court entered judgment NOV, awarding Stephens nothing. O’Reilly withdrew from the case and was the subject of an involuntary bankruptcy petition. Following a remand, Stephens and Fund settled for $5.8 million. The bankruptcy estate claimed 40% of the settlement. Danko, the largest creditor, bought the claim and obtained the Stephens's files from the trustee. Based on O’Reilly’s failure to sign the retainer agreement, Stephens sent Danko a letter voiding the retainer agreement and sought declaratory relief. The court ordered Danko to return Stephens’s client file and granted a special motion to strike (anti-SLAPP) a claim for breach of trust against Fund based on the theory that Fund breached a fiduciary duty to O’Reilly and/or the bankruptcy estate by failing to advise the bankruptcy court of the Stephens-Fund settlement and “secretly disbursing” the proceeds and a claim for interference with prospective business advantage against Fund based on the same acts. The court of appeal affirmed the trial court’s denial of Stephens’s motion to disqualify the Danko from representing the corporate entity to which Danko assigned the claim; a protective discovery order regarding Stephens’s client file; and the anti-SLAPP order. View "O&C Creditors Group, LLC v. Stephens & Stephens XII, LLC" on Justia Law

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The Court of Appeal held that Union was eligible for attorney fees under the California Public Records Act (CPRA) for work on the CPRA cross-petition and for attorney fees under Code of Civil Procedure section 1021.5 for its work opposing the petition for writ of mandate; the trial court did not abuse its discretion in finding that Union met the requirements of Code of Civil Procedure section 1021.5 for attorney fees; Union was the prevailing party and its action resulted in the enforcement of an important right affecting the public interest, conferring a significant benefit on the general public; DWP and Intervener Utilities were not exempt from attorney fees on the ground they were the equivalent of an individual who seeks a determination of only his or her own private rights and has done nothing to adversely affect the public interest; and DWP and Intervener Utilities sought far more than a simple determination of the privacy rights of a few customers. The court also held that the trial court did not abuse its discretion in finding that attorney fees were warranted for Union's initial "collusion" claims; the trial court abused its discretion in denying fees for Union's work preparing the reply briefs; the court need not and did not reach the issues in Union's "protective" cross-appeal; DWP and Intervener Utilities had standing; and the court declined Union's suggestion to find reverse-CPRA actions impermissible. Accordingly, the court affirmed with modifications. View "City of Los Angeles v. Metropolitan Water District of Southern California" on Justia Law

Posted in: Legal Ethics
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The Court of Appeal affirmed the trial court's order awarding plaintiff attorney fees following the settlement of her action against Hyundai. Plaintiff moved for a fee award using the lodestar method for a total of $191,688.75, but the district court only awarded $73,864. The court held that the trial court did not engage in an inappropriate proportionality analysis; the trial court did not abuse its discretion by cutting fees billed by six of eleven attorneys; and plaintiff has shown no abuse of discretion in the trial court's reductions of the attorneys' hourly rates. View "Morris v. Hyundai Motor America" on Justia Law

Posted in: Legal Ethics
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Attorney-defendant Peter Porter represented plaintiff Elise Sharon in a lawsuit resulting in a 2008 default judgment entered in favor of Sharon. In October 2015, a judgment debtor wrote to Sharon, claiming the judgment was void. In November 2015, Sharon’s new attorney correctly opined that the judgment was indeed void. In September 2016, the debtor filed a motion to vacate the judgment, which was granted the following month. In May 2017, Sharon filed a legal malpractice lawsuit against Porter. During a court trial on stipulated facts, the trial court found the judgment had been valid until it was vacated. The court also found the statute of limitations applicable to Sharon’s lawsuit had been tolled until “actual injury” first occurred in September 2016, when Sharon began incurring hourly attorney fees to oppose the judgment debtor’s motion to vacate the judgment. After review, the Court of Appeal reversed, finding the default judgment was void independent of it being vacated. "Discovery of the void judgment and whatever injury resulted therefrom occurred at least by November 2015 when the judgment debtor wrote to Sharon and her new attorney claiming the judgment was void. The statute ran one year from that date. Sharon’s 2017 lawsuit was time-barred." View "Sharon v. Porter" on Justia Law

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Plaintiff filed a malpractice action against Zbylut, Cox and LPS alleging they had violated their professional duties by undertaking representation of Purposeful Press without her consent, and rendering legal advice in the underlying lawsuits that was adverse to her interests. The Court of Appeal affirmed the trial court's grant of defendants' motions for summary judgment, holding that plaintiff did not dispute that she lacked standing to seek reimbursement of Purposeful Press's funds, and plaintiff failed to present any evidence that would support a finding of an implied attorney-client relationship with the firm. In this case, plaintiff has not identified any harm that defendants' representation of Purposeful Press was alleged to have caused her in her representative capacity as a shareholder. Furthermore, even if there were circumstances under which a corporate attorney might owe such a duty to individual shareholders, no such circumstances were present here. View "Sprengel v. Zbylut" on Justia Law

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The Court of Appeal affirmed the trial court's judgment entered in favor of the law firm in an action where defendant entered a written settlement and release from a 2008 judgment to the plaintiff in the underlying lawsuit. The settlement and release released the attorney fees and costs due to the law firm pursuant to the firm's retainer agreement with plaintiff. The law firm then brought this action against defendant, seeking attorney fees and costs, plus interest, awarded in the underlying litigation and incorporated into the judgment. The court held that defendant's act of executing the memorandum was communicative, but it was one act in a course of tortious conduct to deprive the law firm of its attorney fees. Therefore, defendant's noncommunicative conduct was not protected by the litigation privilege. The court also held that there was sufficient evidence to establish that defendant knew of the law firm's attorney fee lien and that he intended to interfere with the firm's collection of its attorney fees and costs. View "Mancini & Associates v. Schwetz" on Justia Law

Posted in: Legal Ethics
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Plaintiffs sued Kissler and her medical marijuana collective (Alternatives), alleging defendants failed to pay them for their contract work growing marijuana. The summons and complaint were served: defendants actively participated in the case but failed to file any responsive pleading. They did not move to quash service. At a case management conference, the judge warned defendants their response to the complaint was long-overdue and that challenging the validity of service required a motion. The court ordered the plaintiffs to take the defendants’ default by a specified date or else be sanctioned. Weeks later, plaintiffs took their default. Meanwhile, Kissler was pursuing cases she had filed against plaintiffs: an unlawful detainer action in which she obtained a writ to remove plaintiffs from her property, and a breach of contract action that alleged plaintiffs, not Kissler had breached the contract. Kissler obtained a discovery ruling in her separate contract action that, contrary to her complaint allegations, deemed plaintiffs to have admitted Kissler was not a party to that contract. Kissler sought to set the default aside. The court of appeal affirmed the denials of discretionary relief from default under Code of Civil Procedure 473(b)) on the ground of excusable mistake. Kissler was capable of ascertaining the rules and using them to her advantage when it suited her. Alternatives was “one and the same” party as Kissler, an attorney. The attorney declaration of fault she filed was of no legal effect for purposes of granting mandatory relief from default under section 473(b). View "McClain v. Kissler" on Justia Law

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After appellants obtained a judgment in their favor, the trial court declared Greene the prevailing party and awarded him attorney fees under a contractual attorney fee provision. Greene appealed, contending that the trial court erred in calculating his damages. Greene later voluntarily dismissed his appeal. Respondent then moved for an award of attorney fees incurred on appeal. The Court of Appeal reversed and held that the trial court erred in awarding respondent her attorney fees because Greene was the prevailing party in the action. The court explained that the fact that the court awarded respondent costs in connection with the prior appeal did not conclusively establish her entitlement to attorney fees under Civil Code section 1717. Furthermore, respondent was not entitled to attorney fees under Code of Civil Procedure section 128.5 where Greene's appeal was not frivolous. View "De la Carriere v. Greene" on Justia Law

Posted in: Legal Ethics