Declarations and Exclusions

More Attorneys Behaving Badly: A Red Card for a Wreckless Referee

See if you can predict how this case will come out, based on the first sentence of the Third District Court of Appeal's opinion:

This case presents the issue of whether a judicial officer enjoys absolute immunity from civil liability for assaulting and battering a litigant.

If you think the answer is "no" and that the aforementioned "judicial officer" needs to learn that physical force is rarely an acceptable dispute resolution technique, you may advance to the head of the class.  Here are the details:

Jerome Regan sued Jennifer Martin in Placer County.  (The exact nature of that lawsuit is not revealed in the appellate decision.)  Disputes arose during the discovery process, and the judge hearing the case decided that a discovery referee should be appointed to control the process and to make appropriate recommendations to the court concerning those disputes.  The court appointed attorney David Price as referee.  Price in short order found himself in a personality clash with Regan's attorney, Robert Kingslan.  At one point, Price accused Kingslan of having "stolen" certain documents that had been produced at a deposition.  In light of that accusation (which he denied), Kingslan concluded that Price was not able to act as a fair and impartial referee and that he would request the court to appoint a replacement.  Kingslan prepared a letter notifying Price of that decision, and brought it with him to deliver at the deposition of Jennifer Martin, which was to be held in Price's office.  According to the complaint (as summarized by the Court of Appeal), the situation deteriorated rapidly:

At the time of the scheduled deposition, Kingslan and Regan entered Price’s office and hand-delivered the letter to Price in the outer office.  Regan and Kingslan stood there for a moment while Price read the one-paragraph letter.  Kingslan and Regan then went into the deposition room, where Kingslan handed [Martin's] Attorney Tyrell a copy of the letter.  As Kingslan and Regan turned to leave the room, Price appeared, blocking the door.  At this point, Kingslan handed Price copies of the documents (belonging to Regan) that Price had previously accused him of stealing.  Kingslan and Regan then attempted to leave the room by stepping around Price.  Instead of allowing them to leave the room, Price shut the door and blocked it with his body.  Kingslan then grabbed the door and forced it partially open, but Price kept exerting force in the opposite direction.  Kingslan finally managed to open the door and escape.  When Regan attempted to follow Kingslan out of the room, Price slammed the door against Regan’s body, injuring him in the shoulder and neck area, where Regan had had radical cancer surgery.

Regan, who was 63 at the time, filed suit against Price seeking damages for "false imprisonment, assault, battery, negligence and infliction of emotional distress."  Price argued that in his capacity as a court-appointed discovery referee he was acting as a "judicial officer" and that he was therefore protected by an absolute immunity from civil liability.  The trial court agreed and dismissed the case; the Court of Appeal reversed and remanded the case to proceed forward on its merits.

The appellate court concurs in two of Price's main premises: Judicial officers, particularly judges, have for centuries enjoyed broad immunity from civil liability for the consequences of their official acts, even when those acts are corrupt or malicious.  Moreover, as a court-appointed referee, Price qualified as a "judicial officer" and thus "is cloaked with the same immunity as if he had been a sitting judge."  The decisive question, however, is whether Price's actions in the deposition room were "judicial" or "non-judicial" in nature.

Price claims he is protected by absolute judicial immunity because all of the alleged tortious acts in the deposition room were undertaken 'in the course of Price’s exercise of his authority as a judicially appointed referee.'  He characterizes his conduct as judicial in nature because its purpose was 'to preserve order in the proceeding -- to prevent a party from leaving a properly noticed deposition he was appointed to referee.'  Regan counters that physically assaulting a litigant can never be a judicial function.  The law supports Regan’s position, except in extraordinary cases.

After discussing several decisions in which judges who entered into physical confrontations with litigants were held to have stepped beyond their proper "judicial" role, the Court of Appeal finds that Price is not entitled to use his quasi-judicial position as a shield to avoid the consequences of his alleged attack on Regan, which was "not a judicial act under any sensible meaning of the term."

A judge’s robe is not a king’s crown.  The object of judicial immunity is to ensure '"that a judicial officer, in exercising the authority vested in him, shall be free to act upon his own convictions, without apprehension [of civil liability]."'  [Citation.]  It was never intended to protect acts of thuggery against litigants merely because the assailant happens to be a judge.

Amen to that and thank you, your Honor.

~~~

The decision in Regan v. Price (August 17, 2005), Case No. C047980, can be accessed at these links in PDF and Word formats. [Note: Links expire approximately 120 days following issuance of the opinions; the opinions should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

The Return of "Attorneys Behaving Badly": Just Because It Said What It Said, Don't Pretend You Didn't Know What It Meant to Say

"Selective Literalism Syndrome" [SLS] is a condition affecting many practicing attorneys.  The principal clinical sign is an aggravated tendency on the part of the attorney to shut down those language centers of his or her brain that would otherwise draw meaning from the context in which a statement is made, and to stimulate instead the neural pathways that focus on the interpretation of a text that will be least likely to conform to its author's intent.  There is as yet no proven treatment for this condition.  Recent experimental studies suggest, however, that a liberal administration of Sanctions Therapy may eventually produce results in some who suffer under the burden of SLS.

The Court of Appeal for the Second District provides an enlightening SLS case study arising from an insurance dispute.

Retailer Sears, Roebuck & Co. is enmeshed in litigation with its insurer, National Union Fire Ins. Co., over National Union's refusal to pay Sears' claim that it lost $20 Million through theft committed by Focus Media, an advertising agency Sears had hired.  Attorney Geoffrey Mousseau represented several of Focus Media's principals, who were witnesses in (but not parties to) the insurance litigation.  Sears concluded that Mousseau had assisted National Union in formulating defenses to Sears' claims under the insurance policy, and sought to obtain records from Mousseau to prove or disprove that theory.

Sears' attorneys served Mousseau with five subpoenas, some for production of records and some to compel his appearance for questioning in a deposition.  Mousseau did not respond.  Sears sought court orders to enforce its subpoenas.  The trial court appointed Malcolm Lucas, the retired Chief Justice of the California Supreme Court, to serve as a referee to oversee and resolve the various disputes over production of evidence.  Mousseau first unsuccessfully challenged the appointment of Justice Lucas.  He next succumbed to advanced SLS, triggered by an innocent clerical error in Sears' subpoenas:

Mousseau’s later opposition to the merits of the discovery motion was based on a typographical error in Sears’ document production subpoenas: although those subpoenas directed Mousseau to produce the requested documents at the address of Sears’ lawyers, they also directed him to produce the documents to the deposition officer, then mistakenly identified Mousseau as the deposition officer.  According to Mousseau, he fully complied with the document subpoenas because, in accordance with their instructions, he delivered the specified documents to himself. . . .  Mousseau [also] contended . . . that Sears canceled the deposition when a proposed deal calling for Mousseau’s advance production of the requested documents fell through.

Declarations and correspondence submitted in Sears’ moving and reply papers told a different story.  When synthesized, they show Sears’ lawyers trying to pin down Mousseau regarding whether he would appear for the September 29 deposition as scheduled, with the lawyers agreeing to Mousseau’s alternate date of October 1, 2003, as well.  Sears’ evidence showed that the deposition was canceled in order to avoid unnecessary costs only because Mousseau refused to confirm whether he would attend.  They also show frantic attempts to contact Mousseau and ask why he missed the September 20 document production deadline.  During phone conversations with one of Sears’ lawyers during the week of September 22, 2003, Mousseau acknowledged his failure to produce the documents on time and promised to deliver them by courier on September 26.  He did not.  On October 2, 2003, Mousseau faxed to Sears’ lawyers a letter dated September 25 stating that he had complied with the document subpoenas by producing the documents to himself.  In response to an October 17 letter from Sears’  lawyers that recounted these events, Mousseau sent a fax on November 6 that stated: 'Your letter . . . requested my assistance. I presumed my silence would have spoken sufficiently loudly to you. Since you did not get the message, let me be more clear: I decline.' The faxed letter restated Mousseau’s insistence that he had complied with the document subpoenas and that Sears had canceled his deposition due to a scheduling conflict.  At no time before October 2 did Mousseau express any doubts about his obligations under the document production subpoenas.

[Italics in original; underscoring added.  All dates mentioned were in 2003; cf. Hamlet, Act 3, scene i, re: "the law's delay".]

Mousseau's arguments did not succeed: Not only was he ordered to comply fully with his obligations under the subpoenas, the referee and trial court imposed monetary sanctions of more than $20,000 on Mousseau, payable to Sears.  Mousseau appealed from all of the orders against him; the Court of Appeal affirmed the orders, showing little sympathy for Mousseau's condition:

Mousseau’s reliance on Sears’ mistaken designation of him as the deposition officer to whom he should deliver the subpoenaed documents is not a good-faith contention.  Not only did the subpoenas call for production at the address of Sears’ lawyers, Mousseau, as a lawyer himself, must have known what was intended.  Simply put, his contention that he could comply by delivering the documents to himself is preposterous.  Second, regardless of what Mousseau should have known, the evidence shows that he in fact understood his obligations under the subpoenas.  According to the evidence from Sears’ lawyers, Mousseau acknowledged his failure to deliver the documents on time and promised to do so quickly.  From this, we infer that Mousseau in fact knew he was obliged to produce the documents to Sears’ lawyers.  His repeated failures to do so were sanctionable.

[Underscoring added.]

It is to be hoped that someone learned a lesson or two from this experience, and that it will spur further research toward a cure for the debilitating and embarrassing illness that is SLS.
~~~
The decision in Sears, Roebuck and Co. v. National Union Fire Ins. Co. of Pittsburgh (August 15, 2005), Case No. B176666, can be accessed at these links in PDF and Word formats.
[Note: Links expire approximately 120 days following issuance of the opinions; the opinions should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

Prior instances of Attorneys Behaving Badly can be found in the Decs&Excs "Law of Lawyering" archive.

The Man Who Knew Too Much: Insurer's Former Attorney/Consultant Disqualified from Testifying Against Company as Expert Witness

A well known insurance attorney, insurance fraud expert and claims practices consultant has been disqualified from testifying as an expert witness against an insurance company he represented and advised twelve years earlier.

From 1988 to 1991, attorney Barry Zalma defended 21st Century Insurance Company in claims litigation and rendered coverage opinions to the company.  He later formed an education and consulting firm, ClaimSchool, Inc., which also advised 21st Century and provided multi-week training sessions to its claims staff.  In 2001, Helen Brand filed suit against 21st Century, her insurer, claiming breach of the insurance contract and "bad faith" (breach of the insurer's obligations of good faith and fair dealing) in the investigation and adjustment of a mold-related loss to her home.  As trial approached, Brand retained and designated Zalma as an expert witness, to testify concerning the propriety of 21st Century's claims handling practices.  21st Century moved to disqualify Zalma on the ground that he had acquired confidential information during his former representation of the company.  The trial court twice declined to order the disqualification, finding in part that the passage of time (12 years) between Zalma's former engagement by 21st Century and his current engagement as its opponent's expert witness indicated there was no "substantial relationship" between the two matters.  21st Century filed an appeal from the trial court's order, and the Court of Appeal has ordered Zalma's disqualification.

The rule on attorney disqualifications in California is ostensibly a simple one:

An attorney engaged in employment adverse to a former client is subject to disqualification where a 'substantial relationship' exists between the lawyer's current employment and the lawyer's representation of the former client.

Despite the passage of time, the Court of Appeal found that the two engagements had an inescapable connection, giving rise to a presumption that Zalma was in possession of confidential information that he would not be permitted to utilize to the detriment of his former client.

[T]he undisputed evidence before the court in this case establishes the requisite substantial relationship between Zalma’s current and prior engagements to mandate his disqualification as an expert witness against his former client in this litigation. Not only did Zalma personally represent 21st Century as its attorney and supervise associates representing the company between 1988 and 1991, but Zalma’s representation of 21st Century also concerned matters substantially related to the issues in the instant case in which he has been retained to testify against 21st Century.

The two engagements arose in the same context and share numerous factual and legal elements. While an attorney for 21st Century, Zalma rendered “numerous coverage opinions on behalf of 21st Century on a variety of claims issues, including moisture intrusion, rot, and fungal infestation.” Zalma also defended 21st Century in actions by policyholders seeking coverage and/or alleging bad faith in claims handling. . . .

Moreover, using knowledge gained from consultations with 21st Century concerning its claims handling policies and procedures, Zalma taught the company’s claims adjusters how to evaluate claims for coverage under 21st Century’s homeowner’s policy and made suggestions to the company for improving its claims handling procedures. It is thus readily apparent that by virtue of the nature of Zalma’s representation of 21st Century, confidential information material to the current dispute would normally have been imparted to Zalma. As such, Zalma’s knowledge of confidential information must be presumed.

At least as the court describes it, the close ties between the past and current representations are sufficiently clear that one can only ask of Zalma's decision to accept retention as an expert in this case:  "What was he thinking?" (This is the latest in a continuing series of attorneys seemingly believing that their former representations of an insurer pose no obstacle to switching sides.  Click through for two previous  examples of disqualifications of insurers' former attorneys.)

The decision in Brand v. 20th Century Insurance Company (Sept. 1, 2004; ordered published December 1, 2004), Case No. B169913, can be accessed at these links in PDF and Word formats. [Note: The links will expire in approximately 120 days; the opinion should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

On Second Thought, You’re Excused: 9th Circuit En Banc Panel Finds “Excusable Neglect” in Delegation of Calendaring to Paralegal

Last December Decs & Excs reported on the case of Pincay v. Andrews, in which the 9th Circuit U.S. Court of Appeals held that an attorney who missed a critical filing deadline after relying on a paralegal to schedule the filing date would not be relieved from the dire consequences of that error.  Here is a repeat of the earlier summary of the facts:   

Laffit Pincay Jr. and Chris McCarron -- two well-known and successful jockeys -- were engaged in litigation with Vincent Andrews Management Co. and its principals for some 13 years, finally obtaining a judgment against the Andrews parties in 2002. When the judgment arrived, a non-attorney calendaring clerk in the unnamed ‘large law firm’^[1] representing Andrews notified the handling attorney. An e-mail exchange followed, in which the attorney relied on the calendar clerk to determine and make note of the deadline to appeal. The clerk's calculations were inaccurate, and the appeal date came and went without action being taken. On discovering the error, the attorney quickly sought an order from the trial court to extend the appeal date. The attorney argued that his reliance on the calendar clerk was reasonable and that the error was the result of ‘excusable neglect.’ The trial court agreed and granted the extension; Pincay and McCarron appealed that order -- that is, they appealed from the extension of their opponent’s time to appeal -- and the 9th Circuit has now ordered the extension reversed, cutting off Andrews' appeal.

The majority on the original 3-judge panel found that counsel’s error was neglect, but not “excusable” neglect.  As noted by a commenter to my original post, the 9th Circuit granted rehearing of the matter en banc in May of this year.  Now, the Court has overturned the decision of the earlier 3-judge panel, and has concluded that the trial court’s decision to grant relief from the calendar error can only be overturned in the event of a patent abuse of that court’s discretion and that the law as articulated by the U.S. Supreme Court does not permit a rigid per se rule against delegating calendar responsibilities to non-lawyer staff.  Finding no obvious error, the en banc panel has sustained the order granting relief, and directed that the appeal from the judgment should proceed forward to a hearing on its merits. Relying principally on  the 1993 Supreme Court decision in Pioneer Investment Services Co. v. Brunswick Associated Ltd. Partnership, 507 U.S. 380, the 9th Circuit emphasizes that each case must be dealt with on its own particular facts, applying a four-part analysis considering “(1) the danger of prejudice to the non-moving party, (2) the length of delay and its potential impact on judicial proceedings, (3) the reason for the delay, including whether it was within the reasonable control of the movant, and (4) whether the moving party’s conduct was in good faith.”  The trial court found that factors 1, 2 and 4 all supported relief, and that while the “reason for delay” was plain error in reading the controlling rule, that error should be excused.

In the modern world of legal practice, the delegation of repetitive legal tasks to paralegals has become a necessary fixture. Such delegation has become an integral part of the struggle to keep down the costs of legal representation. Moreover, the delegation of such tasks to specialized, well educated non-lawyers may well ensure greater accuracy in meeting deadlines than a practice of having each lawyer in a large firm calculate each filing deadline anew. The task of keeping track of necessary deadlines will involve some delegation. The responsibility for the error falls on the attorney regardless of whether the error was made by an attorney or a paralegal. [Citation.]  We hold that delegation of the task of ascertaining the deadline was not per se inexcusable neglect.

Although in this case “the misreading of the Rule was egregious, and the lawyer undoubtedly should have checked the Rule itself before relying on the paralegal’s reading”, the 9th Circuit nonetheless finds that the trial court was permitted to grant relief.

We are persuaded that, under Pioneer, the correct approach is to avoid any per se rule. Pioneer cautioned against ‘erecting a rigid barrier against late filings attributable in any degree to the movant’s negligence.’ 507 U.S. at 395 n.14. There should similarly be no rigid legal rule against late filings attributable to any particular type of negligence. Instead, we leave the weighing of Pioneer’s equitable factors to the discretion of the district court in every case.

The decision of the en banc panel in Pincay v. Andrews (Nov. 15, 2004), Case No.  02-56577, including a stern dissent by Judge Alex Kosinski,² can be found at this link in PDF format.

Recipes for Failure: A Losing Position, Sloppily Presented

California’s trial courts have the power to direct parties to civil cases to participate in arbitration. Often referred to as “judicial arbitration,” the procedure is non-binding in the sense that any party may, within 30 days after the arbitrator’s ruling, reject that ruling and have the case put back on track for trial. Although either side can reject the arbitrator’s award, it is expected that all parties and their counsel will participate in good faith, to the end that the case may actually be resolved without further proceedings in the court. (A substantial percentage of cases referred to arbitration are in fact resolved as a result, relieving the courts’ overstuffed civil dockets.)

Emphasizing the obligation to participate in arbitration proceedings in earnest, the Court of Appeal, in a case out of Sacramento, has affirmed an order imposing sanctions in excess of $2,000 on an attorney who rejected an unfavorable arbitration award after he had “arrived late to the arbitration, failed to provide the pleadings and brief requested by the arbitrator, failed to have [his clients, plaintiffs] the Rietvelds appear or be available by telephone, and failed to produce evidence, including testimony that was necessary to support the Rietvelds’ case.”

The sanctioned attorney had an uphill fight to begin with, but he appears to have compounded his problems by presenting his case weakly, at best, on appeal. In a section of the opinion that will not be included when the case appears in the Official Reports, appellate practitioners will find the following catalog of how not to persuade an appellate court. (Emphasis added throughout.)

The Rietvelds’ opening brief is deficient. Their attorney quotes major parts of several opinions, both Supreme Court and Court of Appeal, but fails to enclose these paragraphs in quotation marks. He also leaves out footnotes, internal citations, and appropriate ellipses, but gives no indication that anything is left out. Although he cites the cases from which he appropriated the quotes, the pinpoint cites are under inclusive. This unacceptable writing style, even if it was not meant to be deceptive, would have received a failing grade if done in law school.

Counsel for the Rietvelds also fails to substantiate the factual statements made in the brief. In the statement of facts, for example, he recounts the critical facts concerning Jon Rietveld’s agreement with Rosebud. The citation to the record to support these factual statements, however, is to the memorandum of points and authorities in opposition to the summary judgment, not to any evidence. . . .

Lest the attorneys for the defendant (Rosebud) become too pleased with themselves, the Court offers a few pointed criticisms on that side as well:

Not to be outdone, Rosebud’s attorney subtly attempts to influence this court with half-truths and innuendo. . . .

* * *

Further trying our patience, Rosebud baldly asserts the appeal is untimely. This assertion is not accompanied by authority. Rosebud neglects even to reveal why it believes the appeal is untimely.

Counsel owes a duty to this court to be more forthright [citation] and to provide authority for legal arguments [citation], rather than throwing them out off-handedly.

Despite all the problems in the parties’ briefs, we elect to disregard the deficiencies and decide the case on the merits.

The complete opinion in Rietveld v. Rosebud Storage Partners L.P. (July 30, 2004), Case No. C044766, can be read at these links in PDF and Word formats. Only the discussion of the merits of the sanctions award will be included when the decision is published officially.

Get Out Your Calculators: Attorney’s Fees Awarded to Insured’s Attorneys in “Bad Faith” Case May Exceed Policy Benefits Recovered for the Insured

In 1985, in the case of Brandt v. Superior Court, the California Supreme Court held that an insured who successfully sues his or her insurer for damages for “bad faith” may recover, as an element of damages, at least a portion of the attorneys’ fees the insured incurred in the case. Specifically, the Brandt decision holds:

When an insurer’s tortious conduct reasonably compels the insured to retain an attorney to obtain the benefits due under a policy, it follows that the insurer should be liable in a tort action for that expense. The attorney’s fees are an economic loss -- damages -- proximately caused by the tort. These fees must be distinguished from recovery of attorney’s fees qua attorney’s fees, such as those attributable to the bringing of the bad faith action itself. What we consider here is attorney’s fees that are recoverable as damages resulting from a tort in the same way that medical fees would be part of the damages in a personal injury action.

Only the fees relating to recovery of the unpaid benefits can be recovered as damages; additional fees relating to the “bad faith” claim itself, or to pursuing punitive damages, are not to be awarded.

Now, a closely divided (4-3) California Supreme Court has held that an insured who recovered unpaid insurance benefits of approximately $40,000 may be entitled to recover attorney’s fees of $400,000 or more as an element of damages in a related “bad faith” case.

The Cassim family suffered a loss by fire that compelled them to move out of their house. Their insurer, Allstate, initially paid living expenses, but stopped doing so early on when the company began to suspect that the Cassims may have been responsible themselves for the fire. This and other suspicions that the claim was being unduly inflated caused Allstate to delay payment under the policy, and eventually to reject the claim altogether. The Cassims ultimately lost their house to foreclosure. They retained counsel and brought suit to recover the unpaid benefits under their policy and to recover damages for the insurer’s breach of its obligations of good faith and fair dealing.

At trial, the jury found in the Cassims favor, awarding compensatory damages of $3,594.600 and punitive damages of $5 Million. The amount that the insurer should have paid (which was included in the compensatory damages) was found to be $40,856.40. The Cassims’ attorney had handled the case under a contingent fee agreement entitling him to 40% of the total recovery. Allstate argued that the recoverable attorney fee damages under Brandt should thus be $16,342.56: 40% of the policy benefits portion of the overall damages. The trial court disagreed, and awarded Brandt fees of $1,193,533.

The Supreme Court suggests that the amount awarded for fees may be too high, but that the proper amount will likely be much more than the “40% of recovered benefits” urged by Allstate. The court approves a method for determining an appropriate Brandt award:

To determine the percentage of the legal fees attributable to the contract recovery, the trial court should determine the total number of hours an attorney spent on the case and then determine how many hours were spent working exclusively on the contract recovery. Hours spent working on issues jointly related to both the tort and contract should be apportioned, with some hours assigned to the contract and some to the tort. This latter figure, added to the hours spent on the contract alone, when divided by the total number of hours worked, should provide the appropriate percentage.

An example of this calculation, with numbers similar to the instant case, illustrates the point. Suppose the compensatory damages are $3,594,000. Suppose further that the attorney and the client have a 40 percent contingent fee agreement. The total legal fee for the compensatory award is thus 40 percent of $3,594,000, or $1,437,600. Now suppose counsel spent 1,500 hours on the case, and can prove this breakdown: 200 hours on issues related solely to the contract, 500 hours on issues relevant to both the contract and the tort, and 800 hours on issues related solely to the tort. The trial court could reasonably conclude that half the hours spent on the joint contract/tort issues are fairly attributable to the contract (i.e., half of 500 hours, or 250 hours), and thus 30 percent of the hours worked (200 hours plus 250 hours, divided by 1,500 total hours) is attributable to the contract recovery. Thirty percent of the total legal fee (30 percent times $1,437,600) is $431,280. This is the amount a trial court should award as Brandt fees in this hypothetical situation.

The three dissenting justices are not persuaded that the majority’s approach makes either legal or practical sense. Summarizing the dissenters’ doubts, Justice Baxter writes:

Brandt entitles the plaintiff insured to full recovery of policy benefits, undiminished by the attorney’s fees incurred to recover those benefits. In this case, where the attorney was retained under a contingent fee agreement of 40 percent, the correct award is 40 percent of the recovery under the policy. The method proposed by the majority is not only inconsistent with Brandt but will also burden the system with bitterly contested litigation over which contract issues are intertwined with the tort claims and how legal work on such issues should be apportioned. Because this method is predictably unwise and unworkable, I respectfully dissent.

The opinions in Cassim v. Allstate Insurance Company (July 29, 2004), Case No. S109711, can be read at these links in PDF and Word formats.

The Ills the Flesh is Heir To: Continuance is Mandated by Attorney's Emergency Hospitalization

Whatever else they say about us, most attorneys are only human, and the forces of mortality occasionally interfere with our ability to serve our clients as vigorously or punctually as we might wish. A case in point:

There are times when respect for the human condition dictates a compassionate response to a request for a continuance. This is one of those times.

I reported this past February on a decision finding that the sudden death of a plaintiff's attorney provided good cause to continue a trial date. Now, the 4th District Court of Appeal provides another, non-fatal, example of circumstances in which granting a continuance is just the Right Thing To Do. As before, the defendant's attorneys (and the trial court judge) come off as cold fish indeed, in the face of a fellow advocate's frailty.

The appellate Court's introductory summary, quoted above, states the case plainly (all emphasis is added). The grisly details follow:

In the case before us, plaintiffs’ counsel was served with a motion for summary judgment on the day he was admitted to the hospital to have his cancerous bladder removed. The attorney was unaware that he had been served with the motion until the day after he was released from the hospital. He then had two business days in which to obtain affidavits, and prepare and file an opposition to the motion, or lose his clients’ case. Even though the attorney was in no condition to work, he managed to timely file a perfunctory opposition, together with a gut-wrenching request for a continuance. He was largely nonspecific as to the particular affidavits he might file, and the explicit facts he might adduce in opposition to the motion, if only he had the time to do so. He was, however, painfully specific about the reasons why he was in a position to be no more complete at that moment in time.

The trial court [denied] the continuance request, and thereafter put an end to the plaintiffs’ case, by granting summary judgment in the defendants’ favor. . . .

The defendants argue that the attorney should have already had on hand all evidence necessary to oppose the motion, and that, therefore, a continuance should have been unnecessary. The defendants seem to overlook the fact that, even if all the necessary evidence was contained in files located only 10 feet away from the attorney’s desk, there are times when walking those 10 feet, lifting each individual file, and searching through documentation to find each specific item of evidence, is simply beyond human ability. The fact that the incapacitated attorney filed anything at all was nothing short of heroic. The request he filed unquestionably showed good cause for a continuance and the court abused its discretion in denying the request. We reverse and remand.

The decision in Lerma v. County of Orange (July 13, 2004), Case No. G032120, is available at these links in PDF and Word formats.

Good, But Not Good Enough: Successful Class Action Attorneys Potentially Liable For Not Pursuing Additional Claims

Proving once again that there’s no pleasing some people, the Court of Appeal has permitted a suit for legal malpractice to proceed on a theory that the attorneys should have been even more successful than they were in an earlier case. The court summarizes the claim and its holding:

Plaintiff seeks to impose liability on attorneys who produced a class action recovery of some $90 million, claiming they were negligent because they failed to obtain a still larger recovery. While we may share the attorneys’ dismay that their efforts have been rewarded with this lawsuit rather than with the kudos they no doubt expected, and perhaps deserve, we are nonetheless constrained to hold that plaintiff’s claim cannot be rejected out of hand. While it may well be that the attorneys did not breach their duty of care in failing to proceed under an alternative theory that would have produced a greater recovery, we cannot say, as did the trial court, that there simply was no duty for the attorneys to breach.

In the prior litigation, the attorneys represented a class of claims representatives for Farmers Insurance Exchange, who claimed (successfully) that they had improperly not been paid overtime compensation. In the current case, one of the members of the original class is suing the attorneys for malpractice, claiming that a different theory -- under California’s Unfair Competition Law -- would have yielded an even larger recovery. The trial court dismissed the malpractice case, on the ground that the attorneys can have had no duty to pursue claims that were not included in the class certification order in the previous case. The Court of Appeal has ruled that the malpractice case should be allowed to proceed on the ground “that the attorneys’ obligations may extend beyond the claims as certified to related claims arising out of the same facts that class members reasonably would expect to be asserted in conjunction with the certified claims.”

The court declines to hold that a class action attorney can build a fortress of the class certification order, and thereby be relieved of considering the pursuit of other theories, drawing an analogy to an attorney’s obligations to bring to a client’s attention legal problems or issues that fall outside the explicit scope of a retainer agreement. While the court accepts that there may have been perfectly good reasons for the attorneys to decide not to pursue the alternate theory, so that the attorneys may not in fact be liable for malpractice, it concludes that it is not possible to find as a matter of law that the attorneys were not negligent, so that a dismissal at the pleadings stage is premature. The case is remanded to the trial court to move forward on its merits, whatever they may ultimately prove to be.

The opinion in Janik v. Rudy, Exelrod & Zieff (June 22, 2004), Case No. A102513, can be read at these links in PDF and Word formats.

Update: Additional comment on this case in the context of California's Unfair Competition Law (Business & Professions Code 17200, the claim what was not pursued) is available at Overlawyered.

An Attorney Divided -- Long-Time Coverage Lawyer Disqualified From “Bad Faith” Suit Against Former Client Insurer

The Fifth District Court of Appeal has held that an attorney who provided ongoing coverage advice to an insurer for thirteen years must be disqualified from representing the claimants in a “bad faith” suit against that insurer.

Attorney James Wilkins provided insurance coverage advice to Fireman’s Fund Insurance for some thirteen years before leaving the law firm at which he had done that work and starting a new firm of his own. At his new firm, Wilkins took on the representation of the plaintiffs in a suit for breach of contract and “bad faith” against Fireman’s Fund. The bad faith case involved questions concerning coverage available under a Fireman’s Fund policy. Fireman’s Fund moved to have Wilkins and his firm disqualified from acting in the case, based upon Wilkins’ former representation of Fireman’s Fund. The trial court denied the motion. Fireman’s Fund appealed, and the appellate court has ruled that Wilkins must be disqualified, placing its principal reliance on its own earlier decision in a similar case:

In Jessen v. Hartford Casualty Insurance Company, 111 Cal.App.4th 698, we held that, ‘when ruling upon a disqualification motion in a successive representation case, the trial court must first identify where the attorney’s former representation placed the attorney with respect to the prior client. If the court determines that the placement was direct and personal, this facet of Ahmanson is settled as a matter of law in favor of disqualification and the only remaining question is whether there is a connection between the two successive representations, a study that may not include an ‘inquiry into the actual state of the lawyer’s knowledge’ acquired during the lawyers’ representation of the former client.”

Rejecting the attorney’s arguments that his former representation of the insurer in providing coverage advice for thirteen years was not “connected” to his assertion of “bad faith” claims against that same insurer, the court risked stating the obvious:

Wilkins advised and assisted FFIC in making coverage decisions when he acted as FFIC’s California coverage counsel. An insurer’s acceptance or denial of coverage necessarily raises legal issues about whether the insurer conducted an adequate investigation, whether the insurer gave sufficient consideration to the interests and expectations of the insurer, whether the insurer reasonably construed and applied the relevant policy language, and whether the insurer’s construction and application of the relevant policy language was consistent with its treatment of other similarly situated insureds. . . . Coverage disputes are substantially related to bad faith actions for the purpose of attorney disqualification because they both turn on the same issue -- whether or not there is coverage under the terms of the policy.

Under the circumstances, the appellate court concludes that the trial court had no discretion in the matter: disqualification was mandatory.

The opinion in Farris v. Fireman’s Fund Insurance Company (June 17, 2004), Case No. F043531, can be read at these links in PDF and Word formats.

Because I Could Not Stop for Death: Trial Court Abused Its Discretion in Refusing Continuance After Death of Plaintiff's Attorney

The Court of Appeal for the Second District has ordered the continuance of a trial for six months and the reopening of discovery after the trial judge refused to do so. The opening paragraph of the appellate court's decision begins with a firm statement of the obvious:

If plaintiff's counsel's serious physical illness and its debilitating effects culminating in death during the final stages of litigation are not good cause for continuing a trial and reopening of discovery, there is no such thing as good cause. A plaintiff in a personal injury action is not chargeable with the continued good health of his or her attorney. Forcing such a plaintiff to trial without counsel or adequately prepared counsel is not likely to ensure fairness, the overall policy of the law.

Briefly, counsel for plaintiff in a personal injury case was suffering from advanced pancreatic cancer. Based on his ill health, he obtained an order continuing trial for three months. Counsel died one month later. The plaintiff sought and obtained new counsel, who needed time to prepare for trial. When new counsel made that request, the trial court refused to grant any but the briefest of continuances -- the new date conflicted both with counsel's schedule and with plaintiff's own impending surgery -- and refused to reopen discovery to permit new counsel to prepare for trial. In granting plaintiff's petition for a writ, the Court of Appeal finds that the trial judge abused his discretion as a matter of law.

Perhaps the most remarkable portion of the appellate decision is the description of events at the hearing on the second motion to continue the trial. Both the judge and defense counsel are portrayed as almost irrationally firm in their positions, refusing to grant any quarter in light of the plaintiff's unusually difficult position.

Real party [i.e., the defendant] opposed the continuance, arguing the trial date had already been continued once to accommodate [attorney] Stewart's illness. Real party asserted he would be 'at a disadvantage' if petitioner designated additional experts because costs would increase. He also claimed petitioner had unreasonably delayed finding new counsel. Real party concluded by asserting: '[I]t is obvious that plaintiff would not be injuriously affected by denial of the continuance. The time of the court should not be wasted by failure of plaintiff and counsel to be prepared and for plaintiff to shop around for attorneys.'

At the hearing, the trial court noted that it continued the first trial date for three months due to Stewart's illness and said: 'And now a month after he dies, you come in and ask for more time. That could have been done better.' Petitioner explained that he learned of Stewart's death on September 29, 2003, and that he started looking for a new lawyer that day. He denied real party's claims he had 'known for months' that Stewart was terminally ill. Real party contended petitioner should not be permitted to supplement his expert witness list because the terminally ill Stewart had missed the deadline to do so: 'That was his decision as attorney. You can't change that after you die. That will prejudice my client.' Without requiring real party to provide any additional explanation of the potential prejudice, the trial court continued the trial date to January 26, 2004, and denied the request to reopen discovery. The trial court apparently did not consider that Rosenberg was unable to start trial on that date, or that petitioner was scheduled for spinal surgery December of 2003.

Tough crowd.

The decision in Hernandez v. Superior Court (February 23, 2004), Case No. B171030, can be found at these links in PDF and Word formats.