Summarizing, explaining and commenting on legal developments impacting California Lawyers and Judges
The Second District holds threats of physical harm against opposing counsel justify terminating sanctions.
Douglas Crawford represented himself a dispute with Chase Bank about accounts held by his late mother. After numerous discovery skirmishes, he appeared for a deposition with a can of pepper spray and a stun gun, and threatened to physically harm opposing counsel.
Chase moved for terminating sanctions, arguing the threat of physical violence was the last straw in a string of discovery abuses. In his opposition, Crawford made extremely disrespectful statements about the judge’s obsequiousness to Chase’s counsel and other insulting characterizations. … Read full Post
The Ninth Circuit holds 28 U.S.C. § 1927 authorizes sanctions only against individual attorneys, not law firms.
Kaass Law attorney Armen Kiramijyan filed a complaint on behalf of Izabell Manukyan against 10 defendants, including Wells Fargo Bank, alleging improper reporting of adverse information to credit agencies. Kiramijyan responded to a motion to dismiss by moving to amend the initial complaint, but filed no opposition to the motion to dismiss.
The district court granted Wells Fargo’s motion to dismiss, and denied Manukyan’s motion to amend. The court ruled the complaint failed to differentiate between Defendants or allege acts by an individual Defendant. The proposed amended complaint did not rectify the deficiencies. … Read full Post
The Ninth Circuit holds factual probable cause can be established even if some evidence supporting a cause of action is fabricated, and legal probable cause can be established by even one supportive reported opinion.
Xcentric Ventures was sued for extortion by Lisa Borodkin’s clients based on its business of encouraging online third party negative reviews and other harmful online activities unless targets would pay high fees. When Xcentric prevailed, it sued Borodkin for malicious prosecution. The case was dismissed when the court found Xcentric could not establish the underlying claims were brought or continued without factual or legal probable cause. … Read full Post
The Supreme Court holds C.C.P. § 340.6’s one-year statute of limitations applies solely where the claim depends on proof an attorney violated a professional obligation.
Nancy Lee hired attorney William Hanley to represent her in litigation and advanced Hanley attorney fees. After the matter settled Hanley notified Lee she had a credit balance. Lee requested a refund but Hanley refused. Lee sued more than a year after Hanley’s refusal.
Lee’s operative complaint specified she was not injured by Hanley’s legal services, and that Hanley had refused to pay money he owed her. The trial court sustained Hanley’s demurrer reasoning C.C.P. § 340.6 applied to Lee’s claim, and the action was untimely. … Read full Post
The California Supreme Court allows an insurer to sue Cumis counsel to recover allegedly unreasonable and unnecessary defense fees and costs.
J.R. Marketing, Noble Locks, and several of their employees, (J.R. Marketing”) were sued for intentional misrepresentation, breach of fiduciary duty, unfair competition, and other counts in California and in other states. Hartford Casualty Insurance Company (“Hartford”), the liability insurer for J.R. Marketing, denied a duty to defend the actions. In a separate coverage action, the trial court entered an enforcement order finding Hartford had breached its defense obligation by refusing to provide independent (“Cumis”) counsel for the insured. The order also established Hartford waived its right to assert the attorney billing rate provisions of California Civil Code § 2860. The order explicitly permitted Hartford to challenge fees and costs in a separate reimbursement action after the underlying suits were resolved.
After the liability suits against J.R. Marketing were settled, Hartford filed an action against J.R. Marketing’s Cumis counsel, Squire Sanders, alleging it charged excessive fees and costs. The trial court sustained Squire Sanders’s demurrer to Hartford’s complaint, concluding the insurer had no legal or equitable claim against non-insureds, including independent counsel for an insured. The California Supreme Court reversed, holding, under the narrow facts of the case, that Hartford could pursue its right of reimbursement directly against Squire Sanders. … Read full Post
The Fourth District holds a shareholder in a non-derivative suit against a corporation does not have standing to disqualify an attorney representing another shareholder and the corporation, and there was no actual conflict of interest between the shareholder and the corporation being represented by the same attorney.
Hart, King & Coldren, Inc. (HKC) had two equal shareholders, Robert Coldren and William Hart. The parties operated under a shareholders’ agreement, and, when Coldren retired, a dissolution agreement. Disputes arose and Coldren sued HKC and Hart asserting causes of action arising out of Coldren’s departure, including an action for involuntary dissolution, and causes of action seeking damages.
After HKC and Hart filed a cross-complaint against Coldren, he obtained an order preventing HKC’s and Hart’s counsel, Grant, Genovese & Barratta LLP (Grant Genovese), from representing HKC based on a conflict of interest. The trial court reasoned it was improper for Hart to direct HKC to sue Coldren, a 50 percent shareholder. The court allowed Grant Genovese to continue representing Hart, but ordered he parties to meet and confer on a neutral attorney for HKC. … Read full Post
The Fourth District holds attorney’s fees for self-representation are recoverable under the Public Records Act.
The Law Offices of Marc Grossman sought, as a member of the public, the amount the school district spent to defend a claim. The Court of Appeal granted Grossman’s writ of mandate, reversing the trial court, and ordered the trial court award fees and costs under Government Code § 6259. The trial court denied fees on the basis that a self-represented attorney cannot recover fees.
The California Public Records Act (CPRA), provides for reasonable fees to a prevailing party, as part of its legislative purpose of providing public access to to information in the possession of public agencies. Given the purpose of the legislation, precedent applicable to contract disputes between attorneys and clients, which held a self-represented attorney does not “incur” fees, did not apply. … Read full Post
The Second District holds the pre-filing gatekeeping statute against civil conspiracy claims alleging an attorney conspired with a client applied to bar non-client claims against an attorney.
Adam Klotz, Richard Spitz, and Stephen Bruce formed SageMill LLC (SageMill) to craft tailored, short-term investment strategies and provide investment advice. SageMill’s operating agreement provided a member could not withdraw without the consent of SageMill’s managers, and prohibited Klotz, Spitz and Bruce from engaging in competitive services.
Klotz and Spitz claimed a lucrative transaction was not consummated because Bruce breached his fiduciary duties to them, aided and abetted by SageMill’s attorney Deborah Festa and her law firm Milbank, Tweed, Hadley & McCloy LLP (“Milbank”). Festa gave Bruce advice about how to terminate his obligations to SageMill, without making disclosures to Klotz and Spitz or obtaining their written consent. … Read full Post
The Fourth District applies the litigation privilege to dismiss a claim a law firm received stolen goods from its clients.
Bidna & Keys, APLC (“B & K”) represented Michael Reeves in a dispute between Reeves and his business partners, John Finton and Daniel Tontini. Reeves, Finton and Tontini owned Finton Construction, Inc. (“FCI”), a custom home builder in Southern California. Reeves sued Finton and Tontini for conspiring to reduce his ownership interest and terminate his involvement with FCI. FCI filed a cross-complaint against Reeves and several former FCI employees who formed a new company. FCI alleged that Reeves and the employees stole FCI’s clients and copied files from FCI’s computers.
When B&K refused to turn over the electronic files it acquired from its client, FCI’s counsel filed a theft report and a State Bar complaint. FCI unsuccessfully sought to disqualify B&K, and depose its attorneys. The trial court ordered the parties to copy and share the files for use in the litigation. … Read full Post