Justia California Court of Appeals Opinion Summaries

Plaintiff-appellant James McKenzie appealed a trial court’s order awarding him only $28,350 of the nearly $48,000 in attorney fees he sought in this case, following the parties’ settlement of McKenzie’s claim under the automobile “lemon law” provisions of the Song-Beverly Consumer Warranty Act. The trial court refused to award McKenzie any of the attorney fees incurred in the wake of Ford’s initial offer because it viewed the compromise offer ultimately accepted by McKenzie as essentially identical to the offer he had initially rejected – distinguished only by his “demand that [he] be allowed to file [a fee] motion.” The court concluded McKenzie unreasonably delayed settlement for the sole purpose of ginning up his fee award. The Court of Appeal reversed. The Court found the trial court’s comparative assessment of Ford’s two settlement offers was erroneous as a matter of law. "Even Ford concedes its initial settlement offer incorporated numerous extraneous provisions – including broad releases of both Ford and nonparties, an illegal confidentiality clause characterized as 'material' to the settlement, and what amounted to an opt-out provision in Ford’s favor – all of which were excised from the offer McKenzie later accepted. These differences are significant, and thus McKenzie’s rejection of the initial offer was reasonable, requiring his counsel to continue working on the case." The Court held further that the trial court’s erroneous comparison of Ford’s initial compromise offer with the offer McKenzie later accepted fatally undermined its conclusion that the entire amount of hours billed by McKenzie’s counsel in the wake of that initial offer was unjustified. The court’s additional finding, that McKenzie’s two attorneys also engaged in instances of duplicative billing after Ford’s initial offer, did not support a complete denial of fees for that period. Consequently, the case was remanded back to the trial court with directions to reconsider the fee award. View "McKenzie v. Ford Motor Co." on Justia Law

"This is a case of egregious attorney misconduct." Because of the cumulative effect of the attorney's misconduct, the Court of Appeal felt compelled to reverse the judgment she obtained on behalf of her client, Caltrans. "While Judge Di Cesare showed the patience of Job – usually a virtue in a judge – that patience here had the effect of favoring one side over the other. He allowed [the attorney] to emphasize irrelevant and inflammatory points concerning the plaintiff's character so often that he effectively gave CalTrans an unfair advantage." View "Martinez v. Dept. of Transportation" on Justia Law

Plaintiff Finton Construction, Inc. (FCI) sued defendants Bidna & Keys, APLC (B&K), Howard Bidna, and Jon Longerbone (collectively defendants) for conversion, receipt of stolen property, and injunctive relief. These causes of action arose from defendants’ receipt of an allegedly stolen hard drive pertinent to a pending case in Los Angeles. Defendants were the attorneys of record in that case. They moved to dismiss under the anti-SLAPP statute, arguing the litigation privilege applied and the complaint failed to state a cause of action as a matter of law. The trial court granted the motion, finding defendants’ actions privileged and that plaintiff had failed to demonstrate a possibility of prevailing on the merits. After review of the parties' arguments on appeal, the Court of Appeal found FCI’s conduct with respect to this entire case "demonstrative of a particularly nasty type of scorched earth tactics." A purportedly stolen hard drive, which was placed in the hands of defendants solely for litigation purposes, has resulted in an attempt to disqualify counsel and two efforts to depose counsel in the underlying case, a police report, complaints to the State Bar of California, and this entirely derivative and unmeritorious second lawsuit. "FCI’s overreach does not suggest zealousness or righteousness, but a calculated effort to undermine the parties in the underlying case by turning their attorneys into fellow defendants. . . . [W]hile [all attorneys] owe their clients a duty to zealously represent them, that zealousness does not trump the duty they own the courts and the judicial process to prosecute only lawsuits with merit. The type of uncivil behavior and specious tactics demonstrated by filing this case represents conduct that brings disrepute to the entire legal profession and amounts to toying with the courts." Less than 48 hours prior to oral argument, the parties notified the Court they had reached a settlement. The court, however, declined the parties’ request to dismiss the appeal. "The lack of civility demonstrated in this case is a matter of public interest. Moreover, while we cannot be certain, it appears that FCI deliberately decided to keep this action pending until the last possible moment in order to avoid the opinion we write today. We therefore decide in defendants’ favor and publish this case as an example to the legal community of the kind of behavior the bench and the bar together must continually strive to eradicate." View "Finton Construction, Inc. v. Bidna & Keys, APLC" on Justia Law

In a prior litigation, FLIR filed suit against their former employees for, among other things, misappropriation of trade secrets. After the former employees prevailed in the underlying action, they obtained a ruling that the misappropriation of trade secrets claim had been brought against them in bad faith, which resulted in an order that FLIR pay the former employees their attorney fees and costs in an amount exceeding $1.6 million. Thereafter, the former employees brought the instant malicious prosecution action against Latham, the attorneys who had represented FLIR in the underlying action. The trial court granted Latham's motion to strike the complaint under Code of Civil Procedure section 425.16, the so-called anti-SLAPP statute. The former employees principally contend that the interim adverse judgment rule does not preclude this malicious prosecution action because the trial court’s finding of bad faith after a bench trial in the underlying action negates its prior ruling denying summary judgment. The court concluded that this hindsight approach is inconsistent with a core principle of the interim adverse judgment rule - namely, that an interim ruling on the merits establishes probable cause in the underlying action, even though that ruling is later reversed by the trial court, a jury, or an appellate court. Accordingly, the court affirmed the judgment. View "Parrish v. Latham & Watkins" on Justia Law

In a prior litigation, FLIR filed suit against their former employees for, among other things, misappropriation of trade secrets. After the former employees prevailed in the underlying action, they obtained a ruling that the misappropriation of trade secrets claim had been brought against them in bad faith, which resulted in an order that FLIR pay the former employees their attorney fees and costs in an amount exceeding $1.6 million. Thereafter, the former employees brought the instant malicious prosecution action against Latham, the attorneys who had represented FLIR in the underlying action. The trial court granted Latham's motion to strike the complaint under Code of Civil Procedure section 425.16, the so-called anti-SLAPP statute. The court reversed, agreeing with the former employees that Code of Civil Procedure section 340.6 is not the appropriate statute of limitations for a malicious prosecution action, and that the former employees have presented sufficient evidence that they otherwise have a probability of prevailing. View "Parrish v. Latham & Watkins" on Justia Law

Plaintiff challenged an order denying its motion to disqualify a law firm that substituted in to represent defendant approximately six months after one of the law firm’s attorneys served as a settlement officer in the case. In Cho v. Superior Court, the Court of Appeal held that when a judicial officer receives confidential information from a party while presiding over a settlement conference, and the judicial officer subsequently joins a law firm, that law firm may not represent an opposing party in the same action, regardless whether the law firm establishes screening procedures to prevent the former judicial officer from having any involvement with the case. The court held that the same standard applies when an attorney serves as a settlement officer in a mandatory settlement conference conducted by a judge and two volunteer attorneys. If the attorney receives confidential information from one of the parties to the action, that attorney’s law firm may not subsequently agree to represent an opposing party in the same action, regardless of the efficacy of the screening procedures established by the law firm. Because the trial court did not resolve the disputed factual question whether the attorney received confidential information while serving as a settlement officer, the court granted the petition and remanded for further proceedings so the trial court can determine whether the attorney was privy to any confidential information. View "Castaneda v. Super. Ct." on Justia Law

Plaintiff filed suit alleging that her attorneys negligently advised her to draw a check on an account that she owned but on which she was not a signatory and deposit the funds into another account she owned. Plaintiff alleged that doing so exposed her to a criminal forgery prosecution. The trial court sustained the attorneys' demurrer without leave to amend on the grounds that plaintiff bore unclean hands and failed to allege she had been found factually innocent of forgery. The court held that transferring one's own funds from one account to another cannot be the basis of a forgery prosecution absent intent to defraud, even if the transfer is effected by means of a false signature. In this case, plaintiff's criminal prosecution could not reasonably have been foreseen by defendants, and any damages she incurred defending against it were not caused by them. Accordingly, the court affirmed the trial court's decision based on a different ground. View "Kumaraperu v. Feldsted" on Justia Law

Leeman filed a private enforcement action under Health and Safety Code 25249.5 (Proposition 65), alleging that t Adams Extract & Spice failed to issue an adequate warning that its product contained a chemical identified on the Governor’s list “of those chemicals known to the state to cause cancer or reproductive toxicity .” A successful plaintiff in such an action is entitled to recover attorney fees under Code of Civil Procedure 1021.5. The parties settled shortly before trial, including a stipulated award of $72,500.00 for attorney fees and costs, incurred by Leeman. In confirming the settlement, the court modified the attorney fee amount by reducing it to $35,839.67. The court of appeal reversed. The trial court had the right to reject the settlement agreement in its entirety, and refuse to “approve the settlement” if the court determined that $72,500.00 was unfair or unreasonable, but lacked authority to modify any of the terms of the settlement agreement unilaterally, thus requiring the parties to accept a settlement to which they have not agreed. View "Leeman v. Adams Extract & Spice, LLC" on Justia Law

Plaintiff filed suit against the attorneys who represented their adversaries in litigation over various financial transactions, alleging that the attorneys engaged in illegal conduct when they solicited and received confidential, privileged, and/or proprietary information from plaintiffs' former attorney and used that information in the litigation against plaintiffs. The trial court granted defendants' motion to strike the complaint under Code of Civil Procedure section 425.16 (the anti-SLAP statute). The court affirmed the trial court's conclusion that the complaint arose from protected First Amendment activity; there was insufficient evidence to show defendants' conduct was illegal as a matter of law; and plaintiffs did not show a probability of prevailing on their claims because the statute of limitations had run and the litigation privilege barred plaintiffs' claims. View "Bergstein v. Stroock & Stroock & Lavan" on Justia Law

In 2010, Debra Hackett was seriously injured in an accident in Sacramento County in which a tractor and trailer owned by Silva Trucking, Inc. and driven by Elaine McDonold jackknifed and collided with the vehicle being driven by Hackett. In 2012, the Hacketts filed a personal injury action in Sacramento County against Silva Trucking and McDonold. The jury awarded the Hacketts $34.9 million in damages. Silva Trucking was insured by Carolina Casualty Insurance Company (CCIC), who retained the law firm Cholakian & Associates to provide a defense. Silva Trucking had an excess liability insurance policy with Lexington Insurance Company (LIC), who retained the law firm Lewis, Brisbois, Bisgaard & Smith, LLP (Lewis Brisbois) as counsel. In 2014, Silva Trucking and McDonold brought suit in Sacramento County against LIC, CCIC, Cholakian & Associates and individual attorneys Kevin Cholakian and Jennifer Kung (collectively Cholakian), and Lewis Brisbois and individual attorney Ralph Zappala (collectively Lewis Brisbois). As to LIC and CCIC, the complaint alleged bad faith and breach of contract. As to the law firms and attorneys, the complaint alleged legal malpractice. The gravamen of the complaint was that the insurers unreasonably refused to accept the policy limit demand when the insured’s liability was clear and damages were known to be in excess of the policy limit. The attorneys failed to advise their insurer clients to accept the demand and the consequences of failing to do so, and failed to advise Silva Trucking and McDonold of their need for personal counsel. LIC and CCIC responded with demurrers. Lewis Brisbois answered with a general denial and asserted 22 affirmative defenses. Under Code of Civil Procedure section 396b, subdivision (a), where an action has been filed in the “wrong venue,” a defendant may move to transfer the case to the “proper court for the trial thereof.” In such a case, “if an answer is filed,” the court may consider opposition to the motion to transfer and may retain the action in the county where filed to promote the convenience of witnesses or the ends of justice. The question this case presented for the Court of Appeal's review was whether, in a multi-defendant case, an answer must be filed by all defendants before the court may consider opposition to the motion to transfer venue. The Court concluded the answer was yes. In this case, the trial court considered opposition to the motion before all defendants had answered the complaint. Accordingly, the Court issued a preemptory writ of mandate directing the trial court to vacate its order denying the motion to transfer and to issue a new order granting the motion. View "Cholakian & Assoc. v. Super. Ct." on Justia Law