When is a rejected joint offer to settle enforceable to award expert witness fees (CCP sect. 998)?

In McDaniel v. Asuncion (filed March 27, 2013) 2013 DJDAR 4038, the plaintiffs, wife and daughter of decedent who lost his life in an automobile accident, sued numerous defendants for wrongful death. Before trial, defendant Asuncion served a joint offer to the two plaintiffs to settle against this defendant alone in the amount of $100,000, which went unaccepted. (California Code of Civil Procedure section 998.) Plaintiffs proceeded to trial against Asuncion and another defendant. While plaintiffs were awarded $3.3 million against the other defendant, Asuncion prevailed with a defense verdict. The Kern County trial court awarded Asuncion his costs, which included $41,000 in expert witness fees. Plaintiffs appealed.

Plaintiffs argued on appeal that a single section 998 offer addressed to multiple plaintiffs is invalid on its face. The problem with this kind of offer, the argument goes, is that one plaintiff cannot control the decision of the other plaintiff; where the defendant is setting forth a lump sum offer for both (or all) of the plaintiffs, the case will only settle when there is joint acceptance. Because the policy purpose of section 998 is to penalize a party who rejects a reasonable offer to settle and thus encourage settlements, the policy is not served by punishing a party who is thwarted in agreeing to settle because of an unwilling co-party. The Court of Appeal, Fifth Appellate District, disagreed, finding there is little, if any, justification for invalidating a joint offer made in a wrongful death case, where a single joint cause of action is brought and any award is given to all heirs in a lump sum. Because it was clear in this case that this defendant received a more favorable judgment, his award of expert witness fees was affirmed.

The Court of Appeal, in finding a wrongful death action to be an exception to the typical unenforceability against a rejected joint offer of settlement, does note a split of authority. The Sixth District case of Gilman v. Beverly California Corp. (1991) 231 Cal.App.3d 121 determined that the joint 998 offer of four wrongful-death plaintiffs did not allow the defendant there the opportunity to evaluate the distinct loss of each plaintiff and reversed an award of expert costs as it was impossible to say which of the plaintiffs' shares of the gross judgment were in excess of that plaintiff's share of the joint offer. So Gilman appears to be contrary to McDaniel.

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What are the limits to an appellate court excusing failure to appeal from an appealable order?

CourtGavel.jpgThe short answer is: do not try to ignore the problem, or even worse, mislead the court. This is exactly what appellant Good did in Good v. Miller (published opinion filed 3/13/13) C068802.

Good sued Miller in an insurance policy dispute. The Placer County trial court found that Good acted in willful noncompliance with the court's order compelling discovery, and awarded Miller both monetary and terminating sanctions. On the 60th day after that order, Good filed his notice of appeal from that order. One problem: a terminating sanction order is not an appealable order. (Code of Civil Procedure section 904.1.) 15 days after Good filed his notice of appeal, a judgment in favor of Miller was filed. Good failed to appeal the judgment (which is appealable under 904.1); nor did he make any other effort to correct his mistake.

The Court of Appeal, Third Appellate District, dismissed the appeal. In its opinion, the court noted that there are circumstances in which the court may save premature appeals: (1) the notice of appeal is entered after judgment is rendered but before it is entered, and (2) the notice of appeal is filed after announcement of intended ruling but before the judgment is either rendered or filed. California Rules of Court, rule 8.104(d) recites the above as subparts (1) and (2) respectively. (1) is mandatory; (2) is discretionary. Because the order granting terminating sanctions is not an appealable order (an appealable order is included in the meaning of "judgment"), the appellate court here acted discretionarily under subpart (2).

The court declined to exercise its discretion for three reasons: (1) appellant did not ask the court to do so; (2) respondent repeatedly raised the issue and appellant repeatedly ignored it; and (3) appellant misstated in his brief that his appeal was timely filed. The court essentially said: ignore the problem and we will ignore your purported appeal--case dismissed.

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Can product-design-defect strict liability apply to implanted medical devices? When can expert declaration be excluded on MSJ?

805118_liquid_soap.jpgThe above two questions are presented in Garrett v. Howmedica Osteonics Corp. (filed 3/6/2013) B238304. Plaintiff Garrett was treated for cancer in his left femur by an orthopedic surgeon who implanted a prosthetic device, designed and manufactured by defendants, the surgeon had selected to replace the middle portion of the femur. When plaintiff complained about the pain in his thigh approximately 1½ years after the surgery, the surgeon discovered a fatigue fracture in the prosthesis, which had to be replaced in a second surgery.

Plaintiff sued the device-providing defendants for strict product liability (manufacturing defect, design defect, and failure to warn), breach of express warranty, and negligence. These defendants filed a motion for summary judgment claiming no defect factually, and no duty to warn as a mater of law. The motion was accompanied by a declaration of their expert mechanical engineer who said the prosthesis was not defective and the fracture was caused by an excessive load that the product could not bear over time.

Conceding the failure-to-warn claim could not be established, plaintiff otherwise opposed the motion with its own expert metallurgist's declaration which stated that he tested the prosthesis material and found it failed to meet certain minimum requirements for hardness, making the product defective in manufacture and design in his opinion. Defendants objected to most of the substantive portions of this declaration. The trial court sustained the objections and granted the motion, which caused judgment to be entered in favor of these defendants.

Plaintiff appealed, contending exclusion of major portions of its expert's declaration was error, and that triable issues of fact remained. The Court of Appeal, Second Appellate District, Division Three, reversed, vacating that portion of the summary adjudication concerning manufacturing defect and negligence, but directing summary adjudication of the remaining causes of action. In particular, it held that the trial court failed to liberally construe the plaintiff's expert's declaration, causing the sustaining of the objections to be an abuse of discretion.

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May an employer fire a pregnancy-disabled employee after she has exhausted maximum leave provided by Pregnancy Disability Leave Law?

943933_baby.jpgCalifornia Government Code section 12945, subdivision (a) (1), requires an employer to permit a pregnancy-disabled employee to take leave "not to exceed four months and thereafter return to work . . . ." In Sanchez v. Swissport, Inc. (filed February 21, 2013) 2013 DJDAR 2400, employer Swissport claimed that the specificity of this language found in the Pregnancy Disability Leave Law (PDLL) necessarily defines the limits of an employer's obligation. The trial court (Los Angeles Superior Court) agreed, dismissing plaintiff Sanchez's action for wrongful termination upon sustaining defendant's demurrer without leave. The Court of Appeal, Second Appellate District, Division Four, reversed.

Sanchez initiated her leave request nearly eight months before her due date upon her diagnosis of a high risk pregnancy that required bed rest. While she was still disabled, and still three months shy of her due date, she was terminated by Swissport from her position of cleaning agent. She claimed she would have been willing to return to work soon after the birth of her child with need of only minimal accommodations. She further alleged that she was fired because of her pregnancy-related disability and/or her requests for accommodations, and that Swissport failed to engage her in a timely, good faith interactive process.

The appellate court disagreed with defendant and the trial court, finding that the PDLL merely defines the employer's obligations under that statute; the PDLL provisions are in addition to those provided elsewhere in the FEHA law, and may not be construed "in any way to diminish" coverage of a pregnancy-related medical condition "under any other provision" of FEHA. (Quoted portion comes from subdivision (b) of section 12945.) Thus contrary to defendant's contention, the PDLL is not the employee's sole remedy; it is augmented by broader provisions of FEHA that require an employer to provide reasonable accommodations for an employee's known disability, unless the employer shows that such accommodation would cause it undue hardship.

A potentially reasonable accommodation here would have been to give plaintiff an extended leave time. The findings of the trial court do not preclude this: the finding that at the time of her termination plaintiff was unable to perform her job is merely a finding of disability. The trial court did not find that she was unable to perform her essential duties even with reasonable accommodations.

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Does the CHP owe any duty of care to the public in promptly responding to highway lane blockage once its 911 operator responds affirmatively to caller?

February 25, 2013

police.bmpIn Greyhound Lines, Inc. v. Department of the California Highway Patrol (filed 1/23/13, pub. ordered 2/14/13) 2013 DJDAR 2169, during the early a.m. hours, an SUV on State Route 99 had crashed, coming to rest on its side blocking at least one lane. A passing motorist called to report the accident and road blockage to the CHP 911 operator, who responded "We'll go ahead and put this out," but failed to enter the code for lane blockage, delaying the CHP response to the scene. Due to this input error, a more distant CHP unit was summoned to the scene, rather than a nearby unit. Within about three minutes of the call, before the more distant unit could arrive, a Greyhound bus collided with the unlit, disabled SUV causing multiple deaths.

Greyhound was sued; its cross-complaint included a cause of action against the CHP alleging negligence based on unnecessary delay after being alerted of the SUV crash and failure to enter the proper code to get a timely response to the scene, thus substantially contributing to the fatal collision that followed. CHP demurred based in part on lack of duty. Greyhound responded that a duty of care arose when the CHP operator responded to the 911 caller that CHP was on the way, thus dissuading the caller from rendering assistance at the scene. Trial court granted demurrer without leave to amend, dismissing CHP from the action. Greyhound appealed.

The Court of Appeal, Fifth Appellate District, affirmed finding that law enforcement officials have no duty to come to the aid of another unless a special relationship exists; such a relationship arises if the agency's act created the peril, or contributes to, increases, or changes the risk that otherwise exists. The court determined that no such relationship existed here between the CHP and the injured bus passengers because there was no express promise inducing reliance or increasing person's risks of harm. The appellate court cited California Supreme Court authority in support of this analysis: Williams v. State of California (1983) 34 Cal.3d 18, and Clemente v. State of California (1985) 40 Cal.3d 202.

The reviewing court found Greyhound's argument fail for several reasons: (1) Greyhound's theory expands the narrow special relationship exception; (2) CHP did not induce the bus passengers to rely on CHP to their detriment or to increase their risk of harm; and (3) Greyhound's claim is replete with speculation and conjecture as a 911 caller would have had no duty to control the SUV accident scene to prevent a further collision, and the three-minute interval between the call and the bus accident was too short to expect that a closer CHP unit would have made a difference. As a final policy caveat, the court notes that to accept Greyhound's argument would make the CHP an "insurer" rather than an "enforcer."

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Where unlawful discrimination is a substantial factor motivating employee's termination, but employer proves it would have made decision for other valid reasons, what are employee's remedies?

February 19, 2013

employee's termination.jpgThis question, along with several other related questions, is answered by the California Supreme Court in Harris v. City of Santa Monica (filed February 7, 2013) S181004. The state high court answers that, while there is no causation proven by the fired plaintiff in the above instance thus no awardable damages or reinstatement, plaintiff may nonetheless be awarded declaratory or injunctive relief and attorney fees and costs. Allow me to summarize the issues the high court had to resolve in getting to this conclusion, and the impact that may have on employment litigation.

Plaintiff was a probationary bus driver employed by City. She suffered two preventable accidents and was twice late to work without notification during her 7-month tenure. Six days before her termination, she had a chance encounter with her supervisor who noticed her shirt was not tucked in. When advised to tuck in her shirt, she confided she was pregnant. The same day she submitted her doctor's note listing limiting restrictions under which she could continue to work, City issued a list of probationary employees who failed to meet employment standards thus were terminated; she was on the list based upon her previously stated deficiencies. Plaintiff sued.

At trial, the court refused City's request for a jury instruction on its mixed-motive defense (BAJI No. 12.26): that where there was a non-discriminatory motive as well as a discriminatory one, if the legitimate one standing alone would have induced the decision to terminate, defendant is not liable. Instead the jury was instructed in CACI No. 2500 that if her pregnancy was proved by plaintiff to have been a motivating factor in her discharge, causation was established. The jury awarded her approximately $178,000 in damages; the court awarded attorney fees and costs of about $400,000. The Court of Appeal found that, while there was substantial evidence that plaintiff had been fired because of discrimination, the trial court prejudicially erred in failing to give the "mixed motive" instruction. The Supreme Court granted review on the question of the correctness of that instruction.

The Supreme Court went through an extensive discussion of the purpose of California's FEHA provisions and analyses of how both state and Federal courts viewed causation in the various types of discrimination cases. It concluded that to ensure that liability will not be imposed based on evidence of mere thoughts or passing statements unrelated to the disputed termination, plaintiff is required to show discrimination was a substantial motivating factor, not just, a motivating factor, thus disapproving of CACI No. 2500. Even where a substantial motivating factor is shown to be discriminatory, the employer still has the opportunity to show that it would have made the decision in any event--that the legitimate reason, standing alone, would have induced the same decision. Does a same-decision showing provide a complete defense to liability when plaintiff has shown that the termination was motivated at least in part by discrimination?

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In the Path of the High Speed Rail: An Overview of the Eminent Domain Process

February 15, 2013

eminent-domain-lawyer1.jpgOn January 14, 2013, California's Public Works Board authorized the California High Speed Rail Authority ("CHSRA") to begin negotiating with property owners in Madera and Merced counties for the purchase of their property needed for the first construction segment of high speed rail ("HSR") route. This action initiates a process, known as eminent domain, which is one of the most controversial powers afforded to the State by Article I, section 19 of the California Constitution. These constitutionally based powers allow public agencies, like CHSRA, to take private property for a public use. Many farms, ranches, businesses and individuals in the Central Valley will be affected by this process over the coming months. The purpose of this article is to provide a broad overview of the eminent domain process and to generally describe the rights which property owners have to ensure that they are justly compensated for their land, buildings, improvements and businesses which are located within the planned rights of way needed for the HSR project.

The CHSRA is allowed to use eminent domain powers to acquire the right of way for the HSR project because the trains will serve a public use. The definition of "public use" is extremely broad and applies to anything that confers a public benefit. Because this definition has been applied by the courts to projects of far less public significance, legal challenges by property owners located within the planned HSR right of way, on the basis of a lack of public benefit, are not going to succeed. For this reason it is likely more beneficial for owners to turn their attention and resources away from challenging the CHSRA's right to take their property, and focus instead on how much the CHSRA should pay to justly and fully compensate the owners for their property.

The California Legislature has codified the procedures to be followed for the eminent domain process beginning at Code of Civil Procedure. The procedures are strictly applied by the courts. While the statutory process includes all of the steps to follow leading to a court trial, if necessary, public agencies typically attempt to negotiate privately with the property owner and avoid court action. This is because going to court is expensive for the public agency and for the property owner. The negotiating process can often be lengthy. Like other public agencies, the CHSRA is required to first obtain a formal appraisal of the property to determine the "fair market value" of what is being taken. The initial offer from the CHSRA may not be less than the value stated in the formal appraisal. The property owner is entitled to a copy of the appraisal summary indicating the value determined by the CHSRA appraiser. In addition, the property owner is allowed to obtain his own appraisal, paid for by the CHSRA, at a cost not to exceed $5,000. Our advice to property owners is to always obtain the second appraisal.

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When does theft by false pretenses constitute violation of receiving stolen property statute causing civil award of treble damages and attorney fees?

February 13, 2013

theft.jpgThe short answer appears to be anytime a plaintiff pleads and proves such a theft under California Penal Code section 496 (a) and (c). Under section 496 (c), receiving or buying property obtained by theft is not only a criminal offense, but is also civilly punishable by allowing a person injured by a violation of 496(a) to be awarded treble damages plus attorney fees and costs.

In Bell v. Feibush ( filed January 15, 2013) 2013 DJDAR 627, plaintiff received a default judgment against defendant based on her complaint that defendant had induced her under false pretenses to loan him $202,500. She was awarded the unpaid $202,500 for breach of contract and fraud, and $607,500 as treble damages under her cause of action pled under 496(a); the trial court later reduced the total principal amount of judgment to $607,500. The appellate opinion does not say anything about whether attorney fees were awarded additionally, but those are awardable under 496(c) along with treble damages.

Defendant appealed the default judgment claiming that the statute requires a criminal conviction to trigger its civil provisions, and it also "opens the door to any collecting creditor to claim that a breach of contract constitutes a fraud, and in turn constitutes a theft," making all such cases vulnerable to treble damages and attorney fees. To paraphrase, the justices of the Court of Appeal, Fourth Appellate District, Division Three, answer that their hands are tied concerning the potential consequences of interpreting section 496 (c) to allow these enhanced awards. This is what the Legislature said, and it is not up to the courts to determine policy.

First, the Legislature knows how to use the word "conviction" and instead used the word "violation." The court cites a cable theft case (Heritage Cablevision of Ca., Inc v. Pusateri (1995) 38 Cal.App.4th 517) supporting its interpretation of "violation," which is used in Penal Code section 593d to invoke civil liability for $5,000 plus treble damages plus attorney fees. The Heritage court pointed out the statutory objective of allowing a mere "violation" to trigger 496 (c): the deterrent effect of the criminal sanction is illusory because people presume cable theft is a low priority crime for law enforcement.

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Clarification of the Tripartite Attorney-Client Privilege as between and Insurer, its Insured, and Counsel.

February 6, 2013

Bank.jpgBank of America N.A. v. Superior Court (Pacific City Bank) - 4th District Court of Appeal, Jan. 15, 2013.

Fidelity National Title Insurance Co. ("Fidelity") was insurer for Bank of America N.A. ("BOA") under a lender's title policy, which insured a deed of trust on residential real property. BOA made a clam under the policy, which prompted Fidelity to hire a law firm to prosecute an underlying lawsuit for equitable subrogation, injunctive relief, declaratory relief, and fraud against Pacific City Bank ("PCB"). In turn, PCB served a Subpoena Duces Tecum on Fidelity seeking, among other things, communications between the law firm and Fidelity related to the litigation. BOA moved to quash the subpoena arguing the communications were attorney-client privileged. Trial court denied the motion to quash, prompting BOA to petition for a writ of mandate.

Petition was granted. The appellate court overturned the ruling holding that in California an attorney who is hired by an insurance company to defend its insured, or in this case prosecute an action, under the insurer's contractual obligation, represents and owes a duty to both the insurer and the insured, creating a "tripartite attorney-client relationship". This result seems obvious, right? Or at least consistent with the practice of the majority of California attorneys representing insurance companies and their insureds. So, what was the basis of the trial court's ruling?

It appears the crux of the trial court's denial was that the court drew a distinction between an insurer hiring a law firm to prosecute an action rather than defend an action. The trial court opined that because the law firm was retained to prosecute the action, Fidelity was did not have a "favored position" or "sacred role" in the litigation and the communications were not privileged. The appellate court called the distinction an error as matter of law.

The appellate court cited Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264-1265, holding that the language of the policy, which allowed Fidelity to prosecute such actions in the name of the insured (the court noted this provision is present in both ALTA and CLTA policies) controls; and that "To distinguish between defending an action and prosecuting one would deny a tripartite attorney-client relationship from ever forming in many situations in which a title insurer takes action to protect its insured's title."

By G. Andrew Slater

The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients, clients or otherwise, should act or refrain from acting on the basis of any content included in this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this blog contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this blog.

Does arbitrator's failure to disclose membership in same ADR organization as defense counsel void award even if information of conflict available to plaintiff?

defense counsel void award.jpgIn Gray v. Chiu (filed January 22, 2013) 2013 DJDAR 944, Judge Haber (Retired), a member of ADR Services, Inc., the dispute provider resolution organization in this case, was selected as the third member of an arbitration panel to preside as a neutral arbitrator in this medical malpractice matter. He sent disclosure statements to the parties in January and April of 2010 stating that he had no significant personal or business relationship with any party or lawyer in the matter. During the arbitration that ensued starting January 31, 2011, George Peterson, a partner in Peterson & Bradford represented the respondent, John Chiu, M.D. as lead counsel. Dr. Chiu retained William Ginsburg as his personal counsel, although his name was not listed as a participant on the disclosure statement. The arbitrators rendered a binding arbitration award in favor of Dr. Chiu.

A bit of history on attorney Ginsburg: for many years he represented Dr. Chiu as of counsel at Peterson & Bradford. In September 2009, Ginsburg left that firm to start his own arbitration/mediation business. On October 6, 2009, he became a member of ADR Services, where he was an independent contractor, with no financial interest in ADR. He additionally declared that he did not "actively participate" in the Gray trial, although he attended some depositions and was present during the entire arbitration hearing on the merits. He also stated that in 2010 he had given his ADR business card to petitioner Gray's counsel, Eugene Locken. Locken recalled receiving a business card from Ginsburg, but denied it showed he was a member of ADR; that was something he had no actual knowledge of through the time of the hearing on the merits. Judge Haber was aware that Ginsburg worked through the ADR Services offices, but they never discussed the Gray matter.

After the arbitration panel's issuance of the award in favor of Chiu, Gray filed a petition in Santa Barbara Superior Court to vacate the arbitration award because of Judge Haber's failure to disclose that Ginsburg too was an ADR Services member. The trial court denied the petition stating that the Ginsburg relationship "may not have been disclosed at the arbitration hearing, but it wasn't hidden." The California Court of Appeal, Second Appellate District, Division Six, reversed directing the trial court to vacate the arbitration award, finding arbitrator Haber failed to disclose a ground upon which he could have been disqualified. It was unconvinced that this ground was waived; only the arbitrator was in a position to effectively disclose under the present circumstances.

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SNAKES IN THE PENDERGRASS - CALIFORNIA SUPREME COURT FORTIFIES FRAUD EXCEPTION TO PAROL EVIDENCE RULE IN RIVERISLAND COLD STORAGE V. FRESNO-MADERA PRODUCTION CREDIT ASSOCIATION

January 28, 2013

Contract Law.jpgFor more than 75 years, the California fraud exception to the parol evidence rule in written contract cases has been limited to evidence which tends "to establish some independent fact or representation, some fraud in the procurement of the instrument or some breach of confidence concerning its use, and not a promise directly at variance with the promise of the writing." (Bank of America v. Pendergrass (1935) 4 Cal.2d 258, 263.) Although often criticized and occasionally limited in application, the Courts of Appeal have applied the Pendergrass rule to exclude extrinsic evidence of promises that are not consistent with the terms of an integrated written contract. Pendergrass has been relied on heavily by financial institutions as a defense against claims by borrowers that bank representatives made promises that were contrary to the terms set forth in the loan documents to forbear exercise of remedies, and have been able to avoid liability on fraud claims through demurrer or summary judgment.

However, on January 14, 2013, the California Supreme Court filed its opinion in Riverisland Cold Storage, Inc. v. Fresno Madera Production Credit Association, case S190581, reversing Pendergrass' limitations on the fraud exception to the parol evidence rule. The Court found that Pendergrass was a "poorly reasoned opinion" which "departed from an established general rule" without discussing the "contrary authority." Reviewing the California law on the scope of the fraud exception when Pendergrass was decided, the Court found that Pendergrass itself was inconsistent with the state of the law at the time it was decided and was, in fact, "an aberration." On that basis, the Riverisland court overruled Pendergrass and its progeny and their limitations on introduction of intrinsic evidence under the fraud exception to the parol evidence rule.

By expanding the types of extrinsic evidence admissible in actions arising out of written contracts, the Supreme Court has given borrowers and other plaintiffs substantial leverage, in that they no longer have to show that oral promises be "consistent" with the written agreement terms in order to be admissible in evidence. However, such evidence still will have to overcome the presumption that an integrated written agreement sets forth the true intent of the parties at the time the agreement was signed. Nevertheless, Riverisland has altered the playing field and is likely to result in increased lender liability and other contract litigation.

By Christopher E. Seymour

The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients, clients or otherwise, should act or refrain from acting on the basis of any content included in this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this blog contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this blog.

What constitutes a reasonable offer to compromise under California CCP section 998?

California CCP section 998.jpgEven in cases not involving an award of attorney fees, this question concerns significant financial consequences, in addition to awarded damages, to a non-prevailing party--not uncommonly to the tune of half a million dollars. Such was the case in Whatley-Miller v. Cooper (published opinion filed January 15, 2013, No. B237335).

Plaintiffs, the survivors of Thomas Miller, were awarded a medical malpractice verdict against defendant, a medical doctor, in the total sum of approximately 1.2 million dollars. The history of this litigation included the filing of the complaint on February 28, 2008; defendant's receipt of discovery responses, including verification of decedent's income and other financial impacts to the survivors, from plaintiffs on June 11, 2008; and plaintiffs' offer to compromise for $950,000 (each side to pay its own costs) made pursuant to Code of Civil Procedure section 998, dated June 20, 2008 (only nine days after defendant received plaintiffs' discovery response). The offer was acceptable for 30 days, after which it would be withdrawn; should plaintiffs receive a more favorable award than the offer, in addition to costs awardable under section 998, plaintiffs would be entitled to interest at the rate of 10% per annum calculated from the date of the offer (Code of Civil Procedure section 3291). Defendant neither responded nor requested more time to respond to this offer. A first trial in Los Angeles Superior Court resulted in a hung jury with respect to the claims against Dr. Cooper, followed by a plaintiffs' verdict against him.in the second trial.

After post-trial motions, the judgment was amended to reflect a principal award of $1,198,907. Plaintiffs' filed a memorandum of costs totaling $530,316, including $108,191 for expert fees and $411,100 as prejudgment interest from the date of the compromise offer. Defendant moved to strike and tax these items, in part arguing the 998 offer was extinguished after the first trial and the offer was neither made in good faith nor in compliance with procedural requirements. The trial court found the mistrial at the first trial did not affect the applicability of the offer of compromise, that the offer was reasonable and discovery produced prior to the offer gave defendant an adequate basis to respond, and the offer was not procedurally infirm. The Court of Appeal, Second Appellate District, Division Eight, affirmed.

Concerning whether the offer was reasonably made in good faith, the court observed, "depends upon the information available to the parties as of the date the offer was served." (See Westamerica Bank v. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 130.) Was the offer a reasonable prediction within the range of possible results after trial? If so, were reasons known by plaintiff to predict such a result known or reasonably should have been known to defendant?

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Bystander recovery for emotional distress barred because sister unaware that defendant's defective scuba-diving product caused brother's death, even though while diving with him she observed him to stop breathing.

scuba-diving.jpgWhen a person stops breathing, a typical reaction by one in that person's company is to think the person has had a heart attack. Of course that may not always be a correct assumption. In Fortman v. Forvaltningsbolaget Insulan AB, B23718 (Court of Appeal, Second Appellate District, Division 3, filed January 10, 2013), the emotionally devastated plaintiff thought her brother had suffered a heart attack as they were at the bottom of the ocean scuba diving together and he was unresponsive. After his death was investigated, she learned that her brother's scuba diving equipment had malfunctioned, depriving him of oxygen.

Plaintiff sued the defendant manufacturer for negligent infliction of emotional distress (NIED). The trial court granted defendants summary judgment finding that the NIED plaintiff must at least have a general sense of what is causing the injury; here, she did not contemporaneously perceive her brother's injuries were caused by the defendant's defective product. On plaintiff's appeal, the appellate court affirmed the summary judgment dismissing the case.

The Court of Appeal essentially states its hands are tied by the following language of the California Supreme Court in Thing v. La Chusa (1989) 48 Cal.3d 644667-668: that the plaintiff must be "present at the scene of the injury-producing event at the time it occurs and is then aware that it is causing injury to the victim." It concludes that recovery is barred as a matter of law because plaintiff here could not experience a contemporary sensory awareness that the company's defective product caused the brother's injuries.

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Bumper car amusement ride is subject to primary assumption of risk doctrine.

Bumper car.jpgThe California Supreme Court has determined that, as a matter of law, the primary assumption of risk doctrine (PAR) relieved the operators of the Great America amusement park from their duty of ordinary care to protect a rider of its Rue le Dodge bumper car ride from injury resulting from cars colliding. The high court concluded PAR applies not only to "sports," but to other recreational activities as well.

In Nalwa v. Cedar Fair, L.P., S195031 (filed December 31, 2012), plaintiff, a ride passenger in a car driven by her son, put her hand on the front dashboard to brace herself as the car was bumped by other cars to its front and back. In doing so, she fractured her wrist. She sued for her injuries, claiming common carrier liability and willful misconduct of the park owners. The trial court granted defendant summary judgment because the injury resulted from bumping, a risk inherent in the activity, one it found covered by neither a duty of ordinary care nor the heightened duty of a common carrier. The Court of Appeal reversed, finding the matter not covered by PAR due to public policy and because the activity was too benign to be considered a "sport." (See blog of July 5, 2011.) Now the Supreme Court has reversed the Court of Appeal decision, and applied PAR ordering the reinstatement of the summary judgment dismissing the matter.

The Supreme Court finds the notion that only "active sports" involve the kind of inherent dangerousness mandating the application of PAR to be misguided. While in Knight v. Jewett (1992) 3Cal.4th 296, the activity in question, touch football, was a sport, PAR as introduced there was aimed at avoiding a chilling effect upon people vigorously participating in the broader grouping of recreational activities that have inherent dangers in their nature, that make them desirable. Under PAR, an operator, instructor or participant in the activity owes other participants only the duty not to act to increase the risk of injury over that inherent in the activity. In other words, the low-speed bumping of bumper cars is the both the inherent risk and thrill of riding the bumper cars; without the "bump," the activity would be fundamentally different.

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California's Disabled Persons Act mandatorily grants attorney fees to prevailing defendant.

Can a business sued for denial of disabled person access mandatorily recover its attorney fees upon successful defense of an action that includes both claims of violation of Cal. Civil Code section 55 and federal ADA? The California Supreme Court has answered yes in Jankey v. Lee (filed December 17, 2012) 2012 DJDAR 16809, disagreeing with the federal Ninth Circuit opinion of Hubbard v. So Breck, LLC (2009) 554 F.3d 742.

Defendant Lee owns and operates a small grocery store in San Francisco, but does not own the real property. Plaintiff Jankey, who needs a wheelchair, sued Lee claiming a four-inch step at the entry of the store prevented his potential access. The trial judge granted Lee summary judgment based on Lee's conclusive establishment that the barrier was not readily removable. Lee's request for attorney fees in defending the action was awarded for the most part, in the sum of $118,458. Jankey appealed the attorney fee award. The state Court of Appeal affirmed. The Supreme Court granted review to resolve the conflict between this appellate decision and the federal Hubbard opinion. The California high court affirmed, and remanded the matter to allow Lee to further request his attorney fees on appeal.

Section 55 is a part of the state's Disabled Persons Act. While it includes many of the provisions and complements other state statutes as well as the federal ADA, it adds a significant component that these other provisions lack: persons "potentially aggrieved" are granted standing to sue, not just those who have actually attempted access unsuccessfully. Those plaintiffs who choose to allege violation of section 55 are subject to the further express provisions of the statute which state that the prevailing party in the action "shall be entitled to recovery reasonable attorney fees." The legislative history demonstrates that an earlier draft of the law stated entitlement to the prevailing plaintiff, but that language was intentionally altered prior to passage. So the legislative intent is clear that a prevailing party, which includes a successful defendant, as was the case here, shall be awarded attorney fees.

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