During the 2012/2013 fiscal year, the vast majority of civil cases before California’s Superior Courts – 88.97% – were disposed of before trial. (Judicial Council of California, 2014 Court Statistics Report at p. xv; see also Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 659 (“a large percentage of the claims covered by insurance are settled without litigation and  this is one of the usual methods by which the insured receives protection.”).) That year, the National Center for State Courts estimated the median cost for litigation from initiation through post-trial disposition to range from $43,000 for a “typical” automobile tort case to $122,000 for a “typical” malpractice suit. (Paula Hannaford-Agor & Nicole L. Waters, Estimating the Cost of Civil Litigation, National Center for State Courts, Court Statistics Project, Caseload Highlights, Vol 20, No. 1, Jan. 2013, at 7.) Costs drive litigation outcomes, even for litigants whose defense and/or indemnity is covered by insurance.
But the prospect of settlement can be a delicate endeavor for insureds, particularly when their interests diverge from those of the insurer. The omnipresent priority of the insurance carrier is to minimize cost exposure. The priorities of the insured, however, can vary and are not always exclusively limited to exposure. The insured may prioritize vindication, the prosecution of cross-claims, and/or other forms of non-monetary resolution over the bottom-line cost of defense.
Insurance struggles in the settlement context more typically arise when an insurer refuses to agree to the proposed settlement. But insurance disputes can also arise where an insurer seeks to settle over the insured’s objection. In these instances, settlement becomes a question of obligations and priorities. This article explores some of the parties’ respective obligations and factors to consider when disputes arise between insureds and insurers during the settlement process.
Continue reading Navigating CA Insurance Defense Settlements
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.
A recent decision, J.B.B. Investment Partners, Ltd. v. Fair, addresses the interesting intersection between two statutes that affect when an e-mail binds the sending party: CCP 664.6 gives courts the authority to enforce a settlement provided certain requirements are met. Civil Code 1633.1 et seq., better known as the Uniform Electronic Transaction Act (UETA), allows for the use of electronic signatures on, for example, an e-mail, to bind a party in certain situations.
Continue reading Court Limits Binding Effect Of E-Signatures
Over the past year and a half, courts across the U.S. have been voiding settlement agreements, or refusing to enforce them, when the parties did not have a true meeting of the minds on terms aimed at addressing their obligations under the Medicare Secondary Payer Act, 42 U.S.C. §1395y(b), including Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007.
Read more about this developing area of law on The Whisper, a publication of DRI.
The court of appeal in Stenehjem v. Sareen, 226 Cal.App.4th 1405 (2014) recently revisited the question of when aggressive or belligerent pre-litigation negotiations cross the line from “veiled threats” to criminal extortion. Once determined to be the crime of extortion, the statements are not protected speech under the litigation privilege in Civ. Code section 47 or under the anti-SLAPP statute in Code Civ. Proc. Section 425.16. But how do you know in advance where that line is?
Continue reading How to Tell the Difference Between Negotiations and Extortion
Moua v. Pittullo, Howington, Barker, Abernathy, LLP (2014) Cal.App.4th
[summary judgment affirmed in case where client did not follow attorney’s settlement advice]
Plaintiff rejected a settlement offer from her former spouse in a family law case, after her lawyers (Pittullo) had “strongly” and repeatedly advised her to take the settlement due to low chances of her prevailing.
Continue reading Go Ahead, Encourage Your Client to Accept a Good Settlement
If you settle a case with payments over time, you will want to be aware of the ruling in Purcell v. Schweitzer.
Defendant owed $85,000 on a promissory note. Plaintiff sued. The parties settled with defendant agreeing to pay a total of $38,000 in 24 installments. The settlement provided that if defendant failed to make a payment on time, the entire $85,000 would be due. A stipulated judgment to this effect was part of the settlement. The stipulated judgment asserted that a judgment of $85,000 would be neither a penalty nor a forfeiture. Defendant waived the right to appeal from the stipulated judgment as well as any right to contest or set it aside.
Continue reading No Liquidated Damages for Missing Settlement Payment