Justia California Court of Appeals Opinion Summaries

Articles Posted in Legal Ethics
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Following a child custody hearing in January 2017, the trial court entered an order giving Mother sole custody. In June 2017, Father filed an unsuccessful request to set aside that order. Weeks later, he filed a second unsuccessful request to modify the order. The trial court denied Mother’s request for section 271 sanctions. Months later, she again sought sanctions relating to the June 2017 motion. Father filed an objection but did not challenge the motion on the basis of timeliness. The court ordered Father to pay $10,000 in section 271 sanctions. Father sought reconsideration, arguing for the first time that the sanction request was untimely under California Rules of Court, rule 3.1702(b). The trial court denied the motion and awarded Mother $3,000 in attorney fee sanctions for having to defend the ex parte motion for reconsideration. The court of appeal affirmed. Rule 3.1702(b) states: “A notice of motion to claim attorney’s fees for services up to and including the rendition of judgment in the trial court—including attorney’s fees on an appeal before the rendition of judgment in the trial court—must be served and filed within the time for filing a notice of appeal.” The timing of a notice of appeal is based on the entry of judgment. The sanctions at issue were awarded for attorney fees incurred after entry of the January 2017 judgment; rule 3.1702 does not apply. View "George v. Shams-Shirazi" on Justia Law

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This dispute arose between two attorneys representing the plaintiff class in an approved settlement. After the trial court made an award of attorney fees and divided the fees in accordance with the alleged fee division agreement, appellant challenged the enforceability of that agreement and the division of the attorney fee award between himself and respondent. The Court of Appeal reversed and held that the trial court abused its discretion by enforcing the fee division agreement, when the undisputed facts showed a clear violation of former Rules of Profession Conduct 3-410, which rendered the agreement unenforceable. The intent of the rule was to require the attorney to disclose the lack of professional liability insurance to the client, at the time the client retained the attorney, so the client could consider that information in making the decision to retain or not retain the attorney. The court remanded for the trail court to determine whether principles of equity entitled the law firm to some measure of compensation. In this case, the trial court did not reach the issues of whether respondent should recover compensation for his attorney services on a quantum meruit basis, despite invalidation of the fee division agreement for violation of former rule 3-410 and, if so, how much he should recover. View "Hance v. Super Store Industries" on Justia Law

Posted in: Legal Ethics
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After prevailing on a petition for writ of mandate, petitioner filed a motion for attorney fees under the private attorney general doctrine. The Court of Appeal affirmed the trial court's denial of attorney fees. The court agreed with the trial court that petitioner failed to establish that the benefit the writ petition achieved was conferred on a sufficiently large enough class of persons to justify an attorney fee award under Code of Civil Procedure section 1021.5. The court explained that the most significant benefit here inured specifically to individual drivers with non-qualifying out-of-state drunk driving convictions, and that benefit and the extent to which that benefit balances against the public benefit from an interest in public safety in the form of California's participation in the Compact are both "pertinent circumstances" the trial court was required to consider. View "Villarreal v. Gordon" on Justia Law

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Plaintiff and his counsel appealed from a postjudgment order denying plaintiff's motion to compel the production of documents and imposing $3,456.70 in sanctions against counsel for discovery abuses. The underlying action involved residual payments owed by defendant to plaintiff. The Court of Appeal denied the petition challenging the motion to compel the production of documents, and affirmed the imposition of $3,456.70 in sanctions against counsel. The court held that, although plaintiff lacked standing, counsel had standing to appeal the order and was properly an appellant in this matter. The court also held that the trial court did not err in denying the motion to compel; rejected challenges to the monetary sanctions levied against counsel; held that a separate motion is not required, nor is a separate hearing on discovery sanctions; and held that the trial court did not err in awarding discovery sanctions representing fees and costs incurred. View "Dalessandro v. Mitchell" on Justia Law

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Plaintiff filed suit against MBUSA under the Song-Beverly Consumer Warranty Act after the navigation system in the vehicle he leased from MBUSA experienced recurring problems. The jury found that the vehicle had a substantial impairment and that MBUSA failed to repair or replace the vehicle. Plaintiff did not lease the vehicle for his own use, but for his friend, Arjang Fayaz, who was the primary driver. The jury awarded damages solely to Fayaz. Both plaintiff and Fayaz moved for attorney fees as prevailing parties. The trial court granted the motion as to Fayaz only, and limited the award to fees incurred while Fayaz was a party to the case. The Court of Appeal reversed and held that the Act provides that successful plaintiffs are entitled to collect attorney fees based on actual time expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action. In this case, plaintiffs successfully proved to a jury that the vehicle was defective in breach of MBUSA's express warranty, MBUSA failed to repair or replace it, and damages resulted from MBUSA's breach. Therefore, the jury award did not support the trial court's holding and the court remanded for a hearing to determine a reasonable fee award. View "Patel v. Mercedes-Benz USA" on Justia Law

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After plaintiff obtained a writ relief when a City of Visalia hearing officer ruled against him in a zoning dispute, his motion for attorney's fees under the Civil Rights Act of 1976 was denied. In this case, plaintiff's writ petition sought relief on the basis of procedural violations of the city's municipal code committed by the hearing officer at the hearing, and the petition made a claim under the Civil Rights Act of 1871. The Court of Appeal held that the denial of plaintiff's fee motion under 42 U.S.C. 1988 was an abuse of discretion, because plaintiff was a prevailing plaintiff where he succeeded on a significant issue, his section 1983 claim was substantial, and he prevailed on a state law claim based on the same facts as the section 1983 claim. Furthermore, the city's treatment of plaintiff was not in the public's interest or welfare. In this case, at every opportunity to ameliorate the situation, the city seemingly chose to make matters worse. After the administrative hearing where the city's conduct forced plaintiff to go to court, the city only got more aggressive. The court rejected the city's municipal liability claims; held that Farrar v. Hobby (1992) 506 U.S. 103, supported an award of attorney's fees; and rejected the city's remaining arguments. View "Beames v. City of Visalia" on Justia Law

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