Recently in Trial Practice Category

May employee sue for whistleblower retaliation under the federal False Claims Act in state court, and have that right decided in a petition for extraordinary relief?

February 17, 2014

file000127834430.jpgIn Driscoll v. Superior Court (filed 1/30/14) 2014 DJDAR 11270, the Court of Appeal, Fifth Appellate District, answered yes on both counts, issuing a writ of mandate instructing the state trial court to overrule the demurrer it had previously sustained without leave to amend.

Driscoll had been employed as a medical doctor with real party Spencer's medical group. Spencer initiated the state action by suing Driscoll, alleging various causes of actions including breach of contract, disparagement, fraud and defamation. Driscoll proceeded to file a federal court action alleging retaliation under the FCA; he additionally cross-complained in the state action claiming whistleblower retaliation under the federal FCA and wrongful termination. The gist of his claims was that Spencer refused to pay him for excess hours worked and he was terminated in retaliation for requesting such pay and for complaining about Spencer's billing practices which he believed were fraudulent concerning Medicare and Medi-Cal patients.

In the state court action, Spencer demurred to the federal FCA causes of action alleging the trial court lacked subject matter jurisdiction. The trial court agreed, finding that the federal FCA statute's reference to the filing of such action in an "appropriate [federal] district court" implies that the state courts would not have concurrent jurisdiction. Driscoll then petitioned the state appellate court for a writ of mandate to reinstate the federal FCA causes of action.

Because Driscoll still had other causes of action he could pursue in his state action cross-complaint and still had to defend against Spencer's complaint, Driscoll did not have an order from which he could appeal; his resort for relief here thus was for extraordinary writ relief, which is a method of review dependent on the appellate court's exercise of discretion. Here, the court exercised that discretion because: (1) it appeared the trial court deprived Driscoll of the opportunity to plead his cause of action and immediate review may prevent a needless trial and reversal (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894); and (2) the demurrer raised an important question of subject matter jurisdiction (San Diego Gas & Electric v. Superior Court (1996) 13 Cal.3d4th 893, 913).

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Where a sanction award is statutorily appealable, may the merits of a medical damages discovery dispute resulting in that sanction be reviewed at the same time?

February 14, 2014

file0001257337525.jpgIn Dodd v. Cruz (filed 2/5/2014) B247493, Dodd sued Cruz for injuries sustained in a vehicle accident, including medical surgical expenses he incurred with Coast Surgery Center as a result of the accident. Coast sold to Medical Finance LLC (MedFi) its medical lien for services provided to Dodd. (MedFi's president is Dodd's attorney, Waks.) Cruz sought discovery of documents relating to the lien transaction via subpoena; MedFi succeeded in a motion to quash the subpoena (joined by Dodd), including the trial court's award of $5,600 in sanctions. Cruz appealed the sanction order (sanctions in excess of $5,000 being immediately appealable under Code of Civil Procedure section 904.1, subd. (a)(12).). The Court of Appeal, Second Appellate District, Division Three, reversed the granting of the motion and awarding of sanctions.

The documents sought by Cruz were a contract between Med-FI and Coast that predated Dodd's surgery, a redacted assignment of the claim dated the day of the surgery, and "MedFi's Open Lien Detail;" these documents included evidence of the amount paid for its lien. MedFi objected on grounds of confidentiality, proprietary rights, and relevance. In its motion to quash the subpoena of the documents, MedFi claimed it would incur attorney fees of $5,600 in prosecuting it motion. The trial court granted the motion on grounds of relevancy and awarded the requested sanctions.

Respondents to the appeal first contend the trial court order to quash was not reviewable on a statutory appeal of the sanctions order. The appellate court disagreed, finding that a discovery ruling is reviewable if it "necessarily affects" an appealable order (section 906); here the underlying discovery ruling was "inextricably intertwined" with the monetary sanctions order.

Next, the Court Appeal discussed respondents' contention that the subpoena was not directed at obtaining any documents relevant to this personal injury litigation. It was undisputed that the amount of economic damages, if any, that Dodd may recover for his medical treatment by Coast was one of the subject matters of the lawsuit. The court thus reviewed the measure of damages for past medical expenses: the lesser of the reasonable value of the medical services and the actual amount paid to discharge that obligation. (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 555.) The court found that the subpoena was reasonably calculated to lead to discovery of admissible evidence of reasonable value of the services. Coast's belief of reasonable value, allowing for the risk and expense of collection, could be explained from the amount it received for conveying the lien to Medfi. As a part of this inquiry, what a medical provider is willing to accept in relinquishing its claim may be an adjustment downward from the face amount of its gross billing.

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May trial court order temporary removal of attorney's website postings which could prejudice jurors?

Easy access to social media and the Internet provide great learning and informational tools. But with these benefits have come abuses and challenges for many of society's institutions, educational and judicial to name two. For educators, the challenge involves patrolling some students' trying to cheat their way through their education. For judges, it is a matter of guaranteeing a fair trial where jurors are to decide cases based only on evidence presented in the court proceedings, and not from outside sources.

In Steiner v. Superior Court (filed and published 10/30/13) No. B235347, after jurors were impaneled, defendants Volkswagen and Ford moved the trial court to order that plaintiffs' counsel remove from her website, until the conclusion of trial, two entries touting recent successes against Ford and others in similar asbestos cases. The first article discussed a $1.6 million award, boasting the jury there overcame "defendants' court confusion" to finding them at fault. A second article listed a similar $4.3 million award. Defendants here claimed that the curious human nature of jurors might cause them to Google the attorney and become prejudiced by this provocative information. Plaintiffs and their counsel opposed the motion as infringing upon counsel's right to free speech; that the more appropriate remedy would be to admonish the jurors to not search the Internet.

The trial court granted the motion and additionally admonished the jurors not to Google the attorneys, nor to use the Internet in any way. Plaintiffs petitioned the Court of Appeal, Second Appellate District, Division Six, for a writ of mandate, which was initially summarily denied. Petitioners petitioned for review in the California Supreme Court. The petition misstated that the trial court had ordered plaintiffs' counsel to "take down her firm's entire website," but went on to say that even if the order was more limited, it would be unreasonable. The Supreme Court granted review and transferred the case back to the appellate court to issue an order to show cause. The appellate court did so, and concluded the order was an unlawful prior restraint on the attorney's free speech rights under the First Amendment. Even though the order was limited (and not as plaintiff's counsel had represented to the Supreme Court), and even under the lesser standard for commercial speech, the public interest in assuring a fair trial is adequately met by juror admonitions and instructions.

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Is it improper for a trial court to consider insurer's potential liability for judgment in excess of policy limits in evaluating whether 998 demand was reasonable?

file5601297827370.jpgIn Aguilar v. Gostischef (filed October 11, 2013) 2013 DJDAR 13678, judgment for $2.3 million was entered in favor of plaintiff for motor vehicle accident personal injury, where defendant was insured by Farmers under a $100,000 policy limit. Earlier in the case, plaintiff's counsel had twice requested discovery from Farmers of the policy limit. After more than 2 months had gone by without receiving a response, counsel expressed his desire to resolve the case; that he wished to have that information in order to make a policy limits demand. Again, Farmers failed to respond. Suit was filed nearly 7 months after the initial request. About 2 months after the filing, Farmers tendered the $100,000 policy limit to settle the case. It advised counsel that defendant lived on Social Security and had no assets. Two weeks later, a California Code of Civil Procedure section 998 offer to compromise was formally presented by defendant in that sum. The offer went unaccepted, and counsel for plaintiff advised Farmers of his contention that it would be liable for an excess judgment because it ignored three attempts to settle the matter within the policy limits.

Thereafter, plaintiff made a 998 offer to settle in the sum of $700,000. Farmers, acting for the defendant, countered at $100,000. The matter proceeded to jury trial, followed by an appeal; eventually a $2,339,657 damage award was finally adjudged. Plaintiff followed with a cost bill in the sum of $1,639,451. A large portion of the claimed costs (including prejudgment interest) was claimed as awardable due to defendant's rejection of plaintiff's 998 offer which was exceeded by the award. Defendant moved to tax the costs, arguing that 998 offer was not made in good faith. The trial court disagreed finding that it was not bad faith for plaintiff to make that offer in spite of the lower policy limit because it was within the reasonable range of damages for the nature of his injury, the loss of a leg. Farmers, as the intervener at trial, appealed the cost award.

The Court of Appeal, Second Appellate District, Division Eight, affirmed. The court agreed with Farmers that it was not on this appeal presented with the question of Farmers' liability for the excess judgment. However, Farmers failed to demonstrate that plaintiff acted in bad faith in light of the circumstances of the case when he made the 998 offer in excess of the policy limits. This good faith requirement is to encourage settlement where an offer "is realistically reasonable under the circumstances of the case." (CCP section 998.) It mattered not that what triggered plaintiff's claim that he exposed Farmers to an excess judgment was Farmers' failure to respond to informal (rather than formal) settlement overture of a settlement within the policy limit; counsel's numerous efforts seeking Farmers cooperation in divulging policy limit information had fallen on deaf ears. (See Boicourt v. Amex Assurance Co. (2000) 78 Cal.App.4th 1390.)

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Under what circumstances will a non-settling medical malpractice defendant found liable at trial pay only a token amount to plaintiff as a result of other defendants' pretrial settlement?

Medical.jpgThe case of Rashidi v. Moser (filed 9/23/13) 2013 DJDAR 12903 provides such circumstances. And the circumstances are not terribly unusual. What causes a virtual victory here for to a losing defendant is the confluence of the following statutes: California Civil Code section 3333.3 (MICRA), section 1431 (Prop 51), and Code of Civil Procedure section 877 (concerning good faith settlements).

Plaintiff Rashidi had gone to the emergency room of defendant Cedar-Sinai Hospital with a severely bleeding nose. Based on his ER examination, Defendant physician Franklin Moser proceeded to perform an embolization procedure that same day utilizing embosphere microspheres manufactured by defendant Biosphere Medical. The process was to inject these particles through a catheter to stop the bleeding. Immediately after the procedure, Rashidi lost sight in one eye. He sued the hospital and doctor for medical practice, and additionally alleged Biosphere was liable for product defect for failing to warn that there was a risk the manufactured particles would enter into the wrong part of the blood system and cause blindness.

Court approved good-faith settlements were reached as follows: with Cedar-Sinai for $350,000, and with Biosphere for $ 2 million. Moser was the sole defendant to go to and participate at trial. The jury found him liable, awarding $125,000 for economic damages (future medical), $331,250 for past non-economic damages, and $993,750 for future non-economic damages. The trial court reduced both categories of non-economic damages to a total amount of $250,000 under MICRA, leaving a total damage award of $375,000 against Moser. Moser argued he was entitled to a greater reduction under MICRA, Prop 51 and CCP section 877 in light of the amounts paid by the settling defendants. The trial court disagreed, denying the claimed offset because there was no basis to allocate the settlements between economic and non-economic damages and the jury was not required to attribute any portion of the fault to the settling defendants.

The Court of Appeal, Second Appellate District, Division Four, disagreed with the trial court and modified the judgment to defendant being liable for only $16,655 in total damages after appropriate offsets. It took some nifty arithmetic to get there, which I will briefly explain below. But first, I will summarize the applicable legal principals discussed by the appellate court. CCP section 877 explains that the settlements reduce the claims against other defendants in the amount paid. Under Prop 51 all of the settling and liable defendants are jointly liable for economic damages; but they are proportionately liable for noneconomic damages. As to the medical malpractice defendants, under MICRA, the aggregate total of noneconomic damages is capped at $250,000.

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Does employee's statutory right to indemnity for attorney fees in defending action obligate employer to pay for attorney who duplicates work of employer-provided attorney?

September 16, 2013

employee.jpgLabor Code section 2802, subdivision (a), requires an employer to indemnify its employee for "necessary" expenditures or losses incurred as a direct consequence of the employee carrying out his employment duties.

In Carter v. Entercom Sacramento, LLC (filed 9/3/13) 2013 DJDAR 11886, Carter, as an employee of defendant's radio station, helped conduct an ill-conceived water-drinking contest that resulted in the death of a woman. The woman's family sued the station and employee Carter, among others. Carter tendered defense of the action to defendant station's insurer. The insurer accepted the tender and appointed conflict-free counsel to represent Carter rather than the attorney of Carter's choice. Carter declined the appointed attorney and insisted on utilizing the services of separate counsel. When the insurer refused to pay for that separate attorney, Carter brought this action seeking indemnity under section 2802. The trial court found that none of the fees and costs Carter incurred after the insurer appointed the attorney to represent him were necessary expenditures, thus found in favor of Entercom.

On appeal, Carter claims he had an absolute right to choose his own attorney at the employer's expense. This, he stated, was especially so because he faced potential liability for punitive damages and potential criminal charges. The Court of Appeal, Third Appellate District, disagreed, finding the question of whether the fees and costs claimed were necessary, and thereby subject to the duty of indemnity under section 2802, is a factual one; Carter failed to show the trial court's determination lacked substantial evidence to support it.

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May law firm that represented now-deceased spouses in preparing their wills and trusts represent trustees against wife's personal representative?

Law Firm.jpgRulings on motions to disqualify opposing counsel have in recent months and years regularly found their way into the appellate courts. Some of these reviews have been by way of appeal as appealable injunctive orders. Others have taken the petition for writ of mandate route. The latter route was taken in Fiduciary Trust International of California v. Superior Court (filed 7/31/13) 2013 DJDAR 10119. And again, as was the case in the last disqualification case that appeared in this blog (June 26, 2013), the appellate court disagreed with the trial court. But this time it determined that disqualification should have been granted, rather than not.

Sandler & Rosen (S&R) drafted wills and trusts for Willet and Betty Brown concerning a joint estate worth more than $200 million. In short, the trusts generated substantial income and Betty became the marital trust income beneficiary for life upon Willet's death; upon Betty's death, the principal of the trust went into an Exemption Equivalent Trust that benefitted the parties' four adult children. But after Willet died, Betty revoked her will that had previously benefitted all four of the children, and transferred the large majority of her assets to a trust that benefitted her daughter, the only of the four children that was hers by blood.

After Betty's death, her personal representative, Fiduciary, and the marital trust trustees disputed who was required to pay the $27 million in estate and inheritance taxes due on Betty's assets. The Brown's estate plan indicated that upon the latter of the couple's death the Marital Trust would pay the estate and inheritance taxes. After Willet's death, Betty established a new trust that would, upon her death, distribute a significant majority of the trust assets to the one daughter mostly to the exclusion of the other children. Yet taxes due on her estate still were directed to be paid by the Marital Trust. In light of Betty's changes, the Marital Trust trustees argued that it would be unfair to pay the full amount of taxes owed on the assets of Betty's trust as the other 3 children would pay death taxes on funds they will never receive.

S&R represented the Marital Trust in this tax dispute. Fiduciary moved the court to disqualify S&R. The trial court determined that any communication that occurred at the time S&R prepared the estate plan (about 20 years earlier) were unlikely to be used in the current dispute and denied the motion to disqualify. The Court of Appeal, Second Appellate District, Division Seven, disagreed, finding that based upon the undisputed substantial relationship of the subject matter involved in both representations, and because the previous representation was "direct and personal" rather than "peripheral or attenuated," disqualification was virtually automatic not allowing the trial court to inquire into any actual breach of confidentiality that would affect the present dispute.

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May a trial court award defendant expert witness fees under CCP section 998 after plaintiff declined offer and then dismissed action?

attorney.jpgCalifornia Code of Civil Procedure section 998, subdivision (c) (1) states, "If an offer made by a defendant is not accepted, and the plaintiff fails to obtain a more favorable judgment or award . . . the court or arbitrator . . . in its discretion, may require the plaintiff to pay a reasonable sum to cover costs of the services of expert witnesses. . ." On its face, this provision is clear, and one that carries an important policy (as do reciprocal provisions favoring a prevailing plaintiff) to encourage parties to settle cases pretrial when reasonable offers of settlement are made by the opponent. But this provision does not specify whether a judgment is necessary to trigger recovery. Mon Chong Loong Trading Corp v. Superior Court (filed 7/23/2013) 2013 DJDAR 9593 seeks to resolve this ambiguity.

Plaintiff Cui had been offered $10,000 by defendant in exchange for a release from liability and dismissal of suit. In this personal injury lawsuit, plaintiff had been served with a demand to exchange witnesses and a notice for an independent medical examination (IME). Plaintiff did not respond to the offer, which expired; nor did she participate in the witness exchange or appear for the IME. Facing a motion in limine to exclude any expert testimony on plaintiff's part, plaintiff requested a voluntary dismissal of her complaint without prejudice, which was entered. Defendant, in turn, sought its expert witness fees. The trial court granted plaintiff's motion to tax the expert fees. The Court of Appeal, Second Appellate District, Division Three, disagreed and granted defendants request that the trial court reconsider under section 998.

On the merits of the above question, the appellate court found that section 998's "more favorable judgment award" language dictates that the appropriate moment for a court to assess whether a more favorable judgment or award has been obtained is at the conclusion of the lawsuit, regardless of whether that conclusion is in the form of a judgment. Here, the action ended, in the appellate court's view, with the voluntary dismissal. That is so, even if the dismissal is without prejudice and the potential exists for refiling. By comparison, the price of such a dismissal is the payment of other costs under CCP section 1032. In each instance, the possibility exists for a resumption of the lawsuit, but both" justice and judicial economy" require a swift cost award. The trial court must exercise its discretion in deciding whether to award costs in these situations, not simply say it has no power to do so, as the trial court did here.

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Where law firm represents a company and a member against another member of the company giving rise to hypothetical conflict of interest, but no actual conflict or reasonable likelihood exists, must law firm be disqualified?

I am becoming more and more convinced that trial courts should be more restrained in disqualifying law firms based on mere appearances of potential conflicts of interest. That certainly seems to be the message in a trend of appellate cases. And I may have been a participant in this trend, when I authored the opinion in Baker Manock & Jensen v. Superior Court (2009) 175 Cal.App.4th 1414, in which the Fifth Appellate District found the mere possibility that a conflict of interest existed for a law firm to represent the executor of an estate and a beneficiary against another beneficiary did not warrant the trial court's order of disqualification.

More recently in this blog's May 8, 2013 entry, I discussed (with some reservation as to the reasoning) Khani v. Ford Motor Company (published 4/25/13) 2013 DJDAR 5399, in which the Second Appellate District reversed the trial court's disqualification of an attorney who sued a former client; the appellate court found no evidence the attorney had been actually exposed in the prior representation to information similar to that in the case of his current client opposing his former client.

Now we have Havasu Lakeshore Investments, LLC v. Fleming (published 6/18/13) G047244, in which the Fourth Appellate District, Division Three, too reverses a trial court's disqualification. In this case, the trial court had disqualified a law firm from simultaneously representing a limited liability company, its manager member which itself is a partnership, and the person managing that partnership in a lawsuit against two of the company's minority members. The appellate court found no actual conflict of interest and that there was no reasonable likelihood a conflict would arise; thus, there was no reason to order disqualification because of the appearance of split loyalty (that being the basis of the trial court's disqualification in reliance on rule 3-310(C) of the California State Bar Rules of Professional Conduct).

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Is plaintiff's initial statutory offer to settle extinguished regarding expert costs incurred after that offer yet before a second one, where judgment met or beat either offer?

writing_check.jpgIn Martinez v. Brownco Construction Company, Inc. (published opinion file June 10, 2013) S200944, Gloria Martinez offered to compromise her loss of consortium claim concerning serious injuries suffered by her husband, co-plaintiff Raymond, via two settlement offers pursuant to California Code of Civil Procedure section 998. In August 2007, she offered by way of a demand for $250,000. She received no response from defendant during the statutory 30-day period to respond. Shortly before trial, in February 2010, she served a compromise offer in the lessened sum of $100,000. Again no response followed. At trial she obtained a $250,000 judgment.

Mrs. Martinez incurred $188,537 in expert fees in the time that intervened between the two 998 offers. The statute allows a party prevailing on a 998 offer to recover such fees incurred after the serving of the offer. She took the position that her August 2007 initial offer preceded the incurrence of these fees and sought this item as a recoverable cost. The trial court (Los Angeles County Superior Court) found, under Wilson v. Wal-Mart Stores, Inc. (1999) 72 Cal.App.4th 482, the most recent offer was the only pertinent offer--that this item of cost was incurred before that February 2010 offer, and thus the court disallowed its recovery. The Court of Appeal reversed based on the statute's language and purpose. After granting defendant's petition for review, the California Supreme Court ruled that where two statutory offers to compromise are served by plaintiff, and defendant fails to obtain a more favorable judgment than either offer, expert fees may be recovered from the date of the first offer.

The Supreme Court notes that nothing in the 998 statute prevents a plaintiff from making more than one compromise offer, and it is silent as to the effect of a later offer upon an earlier one. The policy behind the statute, to encourage settlements before trial, is effectuated by giving a strong financial disincentive to parties failing to achieve a better result than it could have achieved by accepting a statutory offer. Strict adherence to contract principles could stifle this strong policy. With this backdrop, the state high court scrutinized the so-called "last offer rule."

The last offer rule strongly dictated the results in Wilson, upon which the trial court relied, and in another Court of Appeal decision cited by defendant, Distefano v. Hall (1969) 263 Cal.App.2d 380. In those cases, where the judgment rendered fell in between the earlier and later of two 998 offers, the later offer extinguished the earlier one. Thus where the amount of judgment was less than a plaintiff's second offer, yet greater that an earlier offer, the later offer was the only one that mattered in determining the time period for which 998 costs could be awarded. (Distefano). Where the reverse occurred: the amount of judgment was greater than a plaintiff's second offer, yet less than an earlier offer, again the second one was the only one that mattered, and the effect was to entirely disallow any 998 costs (Wilson).

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When may an attorney represent in a new action a party adverse to former client he represented in previous actions?

attorney.jpgThe short answer is the attorney may represent the new client against his old client when the new case does not involve matters substantially related to the prior representations. A "substantial relationship" exists where " the attorney had a direct professional relationship with the former client in which the attorney provided legal advice and services on a legal issue closely related to the legal issue in the present representation. " (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 710, 711.) More specifically, the focus is on "the legal and factual similarities of the two representations." (Farris v. Fireman's Fund Ins. Co. (2004) 119 Cal.App.4th 671, 679.) In Farris, the attorney had worked as coverage counsel for Fireman's Fund for over 10 years handling coverage claims and assisting the client in shaping the company's practices and procedures. Six months after his last representation of that client, counsel filed a bad faith claim against it in representing Farris. The appellate court reversed the trial court's denial of Farris' disqualification motion, finding disqualification was required. (Id. at pp. 685, 688.)

Against this backdrop, the Court of Appeal, Second District, Division Four, reviewed the disqualification of attorney Shahian in the recent case of Khani v. Ford Motor Company (publication ordered 4/25/13) 2013 DJDAR 5399. The motion to disqualify Shahian from representing Khani in Khani's lemon law action against Ford came in an action filed about 4 years after Shahian's last representation of Ford. A partner in Shahian's former law firm declared that Ford was a client of the law firm, Shahian had worked on 150 cases of this client, and Shahian was privy to confidential communications with Ford and information with respect to defense, prelitigation strategies and tactics in the handling of lemon law cases brought against client Ford. The trial court granted the disqualification motion.

The appellate court in Khani reversed the disqualification order. The court cited the above Jessen and Farris opinions approvingly for their legal analysis; but the court saw differences in their facts from the Khani case. For example, the attorney in Farris had "shaped the company's practices and procedures in handling California coverage case." These practices and procedures in Farris were said to likely be at issue in the bad faith case the attorney was now bringing against his former client some six months after he had stopped working for it.

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When should a "negligence per se" jury instruction be given and what is the impact of the giving or not giving?

Jury-Box.jpgThere is a popular notion that if a party has violated a statute, legal liability necessarily flows from that violation. Not always so. Spriesterbach v. Holland (filed 4/9/13) 2013 DJDAR 4567 discusses some of important nuances concerning this subject.

Plaintiff rode his bicycle on a sidewalk in the direction opposite the direction of vehicular traffic on the adjoining roadway. He approached a supermarket parking lot to his left where he saw defendant's automobile stopped at the threshold of the sidewalk and parking lot. A hedge and wall separated the sidewalk from the parking lot with an opening at the driveway. Defendant did not see the bicycle as she edged over the sidewalk/driveway and onto the roadway, resulting in a collision that injured plaintiff. Plaintiff sued and the case was tried to a jury. At trial, each side claimed that the other was in violation of the California Vehicle Code.

Vehicle Code section 21804, on which plaintiff proposed a negligence per se instruction be given to the jury, provides that one exiting property to enter or cross a highway shall yield the right-of-way to traffic close enough to constitute a hazard; however once that driver has yielded until it is reasonably safe, other drivers shall yield. The trial court refused to give plaintiff's proposed instruction.

Vehicle Code sections 21605 and 21650.1, on which an instruction was given by the court over plaintiff's objection concerning the question of plaintiff's contributory negligence, provide that bicycles may be ridden on sidewalks; when bicycles are ridden on a roadway or shoulder of a highway, the bicycle shall be operated in the same direction as vehicles are required to be driven.

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Does a third party's criminal conduct of throwing concrete down onto a freeway relieve truck manufacturer's duty to design windshield to protect against such flying objects?

freeway.jpgIn Collins v. Navistar, Inc. (filed March 29, 2013) 2013 DJDAR 4169, a juvenile was throwing chunks of concrete from a freeway overpass onto the freeway, hitting a number of vehicles. One such vehicle was that of plaintiff's deceased spouse, William Collins; a two and a half pound chunk penetrated the windshield and hit William in the forehead, causing severe brain injuries and causing his Navistar truck to crash into a wall. Among those sued was Navistar for product liability on the theory the windshield was defective. Navistar contended it need not anticipate third party criminality when it designed its product. The trial court agreed to the extent that it instructed the jury that, based on a heightened standard of foreseeability, Navistar could be liable only if it foresaw or should have foreseen that a third party would act in this particular manner.

Based on such instruction, the jury reached a verdict on the preclusive issue of duty: the signed verdict form read that Navistar could not "have known or reasonably foreseen that a person would likely take advantage of the situation created by Navistar's conduct to commit" an act like the juvenile's rock throwing. Plaintiff appealed the judgment in favor of Navistar. The Court of Appeal, Third Appellate District reversed.

The appellate court found that language of the instructions and verdict forms given over the objection of plaintiff, even though taken from standard instructions, did not properly adapt from premises negligence law to products liability. As the California Supreme Court stated in Soule v. General Motors ( 1994) 8 Cal.4th 548, 560, in strict products liability cases, truck manufacturers must anticipate that their vehicles will be involved in traffic accidents generally. The foreseeability is of the risk of harm, not of the particular intervening act, even though the manufacturer could not have foreseen the extent of harm or manner in which it occurred. (Torres v. Xomox Corp. (1996) 49 Cal.App.4th 1, 18-19.)

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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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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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