California Practice Tips

CA Court Shields Prelitigation Communications Between Parties

Neil Bardack 
Neil Bardack
February 17, 2016

In Karnazes v. Ares, B246308, the Court of Appeal recently extended the protections of the litigation privilege under Civ. Code Section 47 (b) to communications between parties made in anticipation of litigation.  In that case, an attorney represented one of the defendants in an action brought by a woman who alleged negligence and fraud, among other causes of action, in relation to investment advice.  The attorney was sued along with his client based upon the attorney’s email exchange with the plaintiff, in which he denied his client’s liability and stated that if his client were sued, he would represent him.  The plaintiff disputed that the communications were made by the attorney in his role as an attorney for his client.

When the complaint was filed, the plaintiff alleged that these communications were evidence of fraudulent activity. A motion to strike under the anti-SLAPP statute, Code Civ. Proc. Section 425.16(b(1)), was filed on the grounds that the communications were privileged as they were made in furtherance of a person’s right to petition or free speech under the United States Constitution or the California Constitution in connection with a public issue. (Section 425.16(e).)

To avoid a SLAPP motion to dismiss, a plaintiff has to establish that there is a probability that the plaintiff will prevail on the claim. This evaluation requires a two-step process in the trial court. First, the court must decide whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. If so, then the court must consider whether the plaintiff has demonstrated a probability of prevailing on the claim. If it is determined that the cause of action arose from protected speech and that it lacks even minimal merit, it is subject to being stricken under the statute.

The court held that protected written or oral statements made in connection with judicial proceedings also included communications made preparatory to or in anticipation of such proceedings. Here, the communications by the attorney postured why his client would not be criminally liable and should prevail on the merits, and cautioned the pro per plaintiff not to directly contact his client. In response, the plaintiff failed to submit any factual evidentiary showing that respondent made any specific misrepresentation or that she relied on any to her detriment or to her damage. All of this was held to be protected speech.

The communications giving rise to a fraud claim were innocuous enough and the fact that the attorney was sued could be better explained by the fact that the plaintiff represented herself in pro per. That said, communications made in the heat of a dispute should be carefully considered to stay within the now-protected sphere of a SLAPP motion. The privilege may be lost, for instance, if what is said is not protected speech such as hate speech, defamatory speech, or speech that threatens criminal action rather than civil litigation.

The good result here is a decision that holds that the back-and-forth communications of parties who are disagreeing on legal rights and obligations are privileged if made in anticipation of a lawsuit, and, if it is apparent that litigation is a possible outcome, can be attacked under the anti-SLAPP statute.

Planning To Demur? Review The New Rules For Meet And Confer

Candice Shih 
Candice Shih
January 28, 2016

California courts are tired of hearing your demurrers, and now the state has done something about it. Code of Civil Procedure Section 430.41, which went into effect on January 1, 2016, now requires a meet-and-confer process before a demurrer is filed.

The purpose of these requirements is to encourage parties to cooperate with each other to resolve their demurrer objections out of court. In other words, gone are the days of complaint, demurrer, sustain with leave to amend, complaint, demurrer, sustain with leave to amend, and so on.

Under the new rule, “the demurring party must meet and confer in person or by telephone with the party who filed the pleading” and identify with legal support the basis of the perceived deficiencies. The non-demurring party then must respond with legal support of why its pleading is legally sufficient.

The meet-and-confer must take place at least five days before the responsive pleading is due. If a live-time conference doesn’t take place in time, the demurring party can file a declaration saying it made a good faith effort to meet and confer and why it didn’t happen, and it will receive an automatic 30-day extension to respond.

Regardless of its meet-and-confer efforts, the demurring party must file a declaration with its demurrer saying that it met and conferred and was unable to resolve all of its objections or that the non-demurring party failed to meet and confer with it.

The Code specifically states, however, that any finding that the meet-and-confer process was insufficient “shall not be grounds to overrule or sustain a demurrer.” But any party dissatisfied with the meet-and-confer process might still want to bring its deficiencies to the court’s attention.

A few other notes on this new rule:

  • If you can demur to a portion of the complaint now, do it or accept that you won’t be able to do so if it continues to appear in an amended complaint.
  • If the court sustains a demurrer with leave to amend, it can now order a conference of the parties before an amended complaint is filed.
  • Are you a prisoner representing yourself or litigating an unlawful detainer? Then these rules don’t apply to you.
  • Generally, a complaint or cross-complaint shall not be amended more than three times in response to a demurrer.
  • Under the amended section 472, a party may now amend its pleading instead of opposing a demurrer if the parties so stipulate.

Timing Is Critical For Erecting Ethical Wall

Michele Trausch 
Michele Trausch
November 2, 2015

A case from the Central District of California earlier this year highlights the critical issue of the timeliness of erecting a wall.

In Signature MD, Inc. v. MDVIP, Inc., the defendant moved to disqualify plaintiff’s counsel on the grounds it had previously represented the defendant from 2008 to 2012. The motion was granted because the current and former relationships were substantially similar and because the ethical wall the plaintiff’s counsel’s firm had erected was ineffective.

In fact, the wall was erected two days after the firm was retained by plaintiffs. There was no evidence preventative measures were in place before the wall went up to prevent disclosure of privileged information. Even declarations stating that there was no disclosure during that time would not have helped defeat the motion.

LESSON TO BE LEARNED: It is essential that no work be done before an ethical wall is in place. Courts will require strict compliance with all the elements of an effective ethical wall when ruling on a motion to disqualify. The timeliness of erection of the wall can make all the difference.

Give Experts All The Facts Before They Form An Opinion

Eric Junginger 
Eric Junginger
September 9, 2015

It’s easy to have your expert opine exactly what you think you need to support or oppose a summary judgment motion when the expert is not given all of the pertinent facts. In Shiffer v. CBS Corporation, ___ Cal.App.4th ___ (2015 Cal.App. LEXIS 788) [9/8/15], the First District Court of Appeal made clear that “[a]n expert’s opinion is only as good as the facts on which it is built,” and if the expert has not been given the complete set of facts to form an opinion, the expert’s opinion lacks foundation and can be excluded from evidence.

In Shiffer, plaintiff conceded at deposition that the original asbestos-containing insulation on a Westinghouse turbine generator was already installed when he arrived at the job site, and it was never repaired, maintained, installed, or removed in his presence. Westinghouse moved for summary judgment based on no asbestos exposure. In opposition to Westinghouse’s MSJ, plaintiff submitted a contradictory declaration that insulation was being applied on the turbine when he arrived at the job site.

Relying solely on this declaration (and not reading any of plaintiff’s deposition testimony), plaintiff’s experts Charles Ay, Christopher Depasquale, and Barry Horn submitted declarations collectively opining that plaintiff was exposed to Westinghouse’s asbestos which was a substantial factor in causing his mesothelioma. However, the trial court rejected the plaintiff’s declaration because it failed to raise a triable issue of exposure, and the expert declarations because they did not consider plaintiff’s deposition testimony. Finding no admissible evidence of asbestos exposure, summary judgment was granted.

The Court of Appeal affirmed, observing that plaintiff’s experts relied on “a significantly incomplete universe of information, leaving them without an adequate basis” to form their opinions. Under Sargon Enterprises v. University of Southern California (2012) 55 Cal.4th 747, 770, expert opinions “may not be based on assumptions of fact without evidentiary support.” While it remains true that expert declarations in opposition to a summary judgment motion are to be liberally construed, expert opinions may nevertheless lack foundation and be excluded from the summary judgment record if the experts did not analyze the complete set of relevant facts.

An expert never wants to be surprised at a deposition or trial with facts – that if the expert had known about them – would have materially changed the expert’s opinion. The same goes for a pre-trial expert declaration. It is incumbent on counsel to provide their expert with the complete set of relevant facts. This is not just a good tip in managing your relationship with an expert, but it provides a sound foundation to reduce the risk that the expert’s opinion will be excluded from evidence.

The McNaughton Rules: The Three Hats You Wear in Mediation

Michael McNaughton 
Michael McNaughton
July 28, 2015

Today, most civil cases are mediated or are referred to some other form of alternative dispute resolution. To be an effective litigator, you need to understand the different strategies and skill sets needed for a successful mediation, as compared to a trial.

At trial, the litigator’s primary audience is the judge and jury. The only real goal at trial is to persuade the judge or jury to rule and find in your favor. By contrast, at mediation, the litigator has at least three audiences, each having the power to affect its outcome: (1) opposing party; (2) your client; and (3) the mediator. If the case involves multiple parties or insurance carriers, the number of audiences may be still greater.

During the course of a mediation, the effective litigator needs to communicate to each of these audiences, who come with different goals, perspectives, and motivations. The message you send to each will be different and may seemingly conflict (e.g., opposing party needs to know the strength of your position; your client needs to understand its weakness). The challenge and art of mediation is to deliver these multiple messages, simultaneously or in tandem, while at the same time being persuasive, truthful and credible.

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The McNaughton Rules: Oral Argument Should Not Be A Book On Tape

Michael McNaughton 
Michael McNaughton
May 4, 2015

I love talking to young attorneys about their cases. They are enthusiastic and often passionate about their client’s position. They know the law and have thought through its permutations as it relates to their facts. They believe in, and can readily articulate, the fairness of their client’s position. They answer my questions directly, pointedly, and persuasively. They are good oral advocates. They speak from the heart.

So why is it then, when it comes to oral argument, so many young attorneys turn into robots?

Certainly, part of it is nerves and inexperience. But a larger part, I believe, has to do with the approach that many attorneys — young and old — take when preparing for oral argument.

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The McNaughton Rules: Think Like a Judge; Write Like A Judge

Michael McNaughton 
Michael McNaughton
April 13, 2015

A cardinal rule for any form of persuasive writing is to “know your audience.” Too often, lawyers forget this.

When writing a legal brief, remember that your primary audience is the judge who will decide the matter. Your audience is not the opposing counsel or party (they will never agree with your position), nor is it your client (the brief is written for your client, not to him or her). Understand that when ruling on any matter, a judge is looking for an outcome that is grounded in law, fair, reasoned, and respectful to the parties. Your brief should adopt that perspective by persuading the judge that your position meets those criteria.

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In A Multi-Phase Trial? Don’t Appeal At The Wrong Time

Adam Hofmann 
Adam Hofmann
April 2, 2015

When is a judgment not a judgment (for purposes of appeal)? When it fails to encompass complete relief between the parties.  If you didn’t find that joke funny, imagine if you were Alfonse Castaldi.  His appeal was dismissed sua sponte by California’s Fifth District Court of Appeal for lack of appellate jurisdiction, despite the court’s fairly evident belief that the trial court had committed reversible error.

In Baker v. Castaldi, Case No. F067687, plaintiff Ken Baker sued Therese and Alfonse Castaldi for alleged conversion of personal property, seeking compensatory and punitive damages.  The trial court held a trial on liability commencing March 25, 2013.  The case then proceeded through a fairly tortured procedural history, including a series of injunctions and other interim orders, to a statement of decision and nominal “Judgment” on May 20, 2013, finding for Mr. Baker in the amount of $610,500.

In its May 20 Judgment, the court also found that the Castaldis had acted with malice and oppression, justifying an award of punitive damages.  The defendants filed notices of appeal from the May 20 Judgment on July 2.

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How Confidential Is Mediation Confidentiality?

Michele Trausch 
Michele Trausch
March 23, 2015

According to the court in Amis v. Greenberg Traurig, the answer is “airtight.”

Mr. Amis contended that he signed a settlement in mediation that resulted in personal exposure to him for his company’s corporate obligations.  He sued for malpractice, arguing that if the matter had been tried, he could not have been found personally liable.

Mr. Amis’s law firm moved for summary judgment as he was forced to concede that all the advice he received regarding the settlement was given during the mediation.  Thus, argued the firm, Mr. Amis could not produce evidence to support his claims and the firm could not produce evidence to defend itself.

Both the trial court and the Court of Appeal agreed, giving judgment to the law firm on the basis that any evidence would be barred by the mediation confidentiality statutes.

This case follows the California Supreme Court decision in Cassel v. Superior Court (2011) 51 Cal.4th 113, which held in part that the judiciary had no authority to craft its own exceptions to the mediation confidentiality statutes, regardless of the equities.

While obviously useful in defending a legal malpractice action, the analysis of Amis applies to any claim arising from conduct during a mediation.

Filing Electronically? Why You Should Regularly Check The Docket

Neil Bardack 
Neil Bardack
March 20, 2015

A cautionary tale renewed in the age of Internet and electronic court filings came out of a decision of the Federal Circuit in the patent infringement case of Two-Way Media LLC v. AT&T Inc., case number 2014-1302.  In this case, the Circuit Court upheld a district court decision denying AT&T relief from its lawyers’ (Sidley Austin) failure to timely file a notice of appeal from a $40M verdict against AT&T, after the denial of AT&T’s four motions for judgment as a matter of law (JMOL).

The twist here is that the court clerk mistakenly mislabeled the district court’s orders denying three of the JMOLs, calling them orders granting the motion to file sealed documents, which had been filed contemporaneously with the JMOLs.  However, the clerk correctly labeled the order denying the remaining JMOL and correctly labeled Plaintiff’s Bill of Costs that was filed.

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