Justia Legal Ethics Opinion Summaries

Articles Posted in California Courts of Appeal
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Plaintiff filed suit against Regents after UCSB placed him on interim suspension pending its investigation into an allegation of dating-relationship violence and then delayed completion of the investigation, in violation of its own written policies. The superior court preliminarily enjoined the interim suspension pending completion of the administrative proceedings. Plaintiff was ultimately exonerated in the administrative proceedings. The Superior Court then dismissed plaintiff's action as moot and denied attorney's fees under Code of Civil Procedure section 1021.5. The Court of Appeal affirmed the order of dismissal, but held that plaintiff satisfied the criteria for an award of attorney fees under section 1021.5. The court agreed with plaintiff that the superior court misinterpreted section 1021.5 by focusing primarily on his personal interest in bringing the litigation, as opposed to the significance of the constitutional due process rights that were enforced, and that this misinterpretation "drove the denial of fees." Accordingly, the court reversed the denial of the fee motion and remanded for a determination of the amount to be awarded. View "Doe v. The Regents of the University of California" on Justia Law

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UHI and Lavine, its president, sued five defendants for fraudulent transfer. Following a two-day bench trial, the court held that the transfer was made in satisfaction of an antecedent debt, and entered judgment for defendants. The defendants then moved for costs of proof attorney fees under Code of Civil Procedure section 2033.420(a). A different judge awarded one defendant $35,595 in fees. The court of appeal held that the appeal from the judgment was not well taken and affirmed it. The court rejected an argument that a creditor whose debt is time-barred by the governing limitations period no longer has a “right to payment.” The statute of limitations is an affirmative defense that can be waived. The court struck the costs of proof award as improper. A defendant cannot, at the very inception of litigation, at a time when no discovery had taken place, and no deposition, serve requests for admission essentially seeking responses admitting that plaintiff had no case, and then, if plaintiff ultimately proves unsuccessful, recover costs of proof attorney fees. View "Universal Home Improvement, Inc. v. Robertson" on Justia Law

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The applicable standard of proof for the elements of causation and damages in a "settle and sue" legal malpractice action is the preponderance of the evidence standard. In this case, defendant, the attorney, contends that the element of causation and damages in a "settle and sue" legal malpractice case must be proven to a legal certainty, and that the legal certainty standard imposes a burden of proof higher than a mere preponderance of the evidence. The Court of Appeal explained that no published legal malpractice case using the term "legal certainty" expressly states the default burden of proof is replaced by a standard higher than preponderance of the evidence. Therefore, the court held that the term "legal certainty" is ambiguous and the court resolved the ambiguity by interpreting the statement that a plaintiff must present "evidence showing to a legal certainty that" the alleged breach of duty caused an injury as simply referring to the degree of certainty inherent in the applicable burden of proof. View "Masellis v. Law Office of Leslie F. Jensen" on Justia Law

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After plaintiff settled her civil action as the prevailing party, the trial court set a hearing three months out on an order to show cause (OSC) regarding dismissal, and ordered any motion for attorney fees to be filed and heard before the OSC date. Due to mistake, inadvertence, or neglect by counsel, plaintiff did not file a motion for fees by the court-ordered deadline. The trial court then refused to extend the deadline and dismissed the action pursuant to the settlement agreement. Four months later, counsel filed a motion to set aside the dismissal pursuant to the mandatory relief provision of Code of Civil Procedure section 473, subdivision (b). The Court of Appeal affirmed the trial court's denial of the motion, holding that counsel missed the court-ordered deadline to move for attorney fees and section 473 provides no relief for such error. The court agreed with the trial court that dismissal was not caused by counsel's error. Rather, counsel's error simply caused plaintiff to lose the opportunity to file her fee motion. View "Hernandez v. FCA US LLC" on Justia Law

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Wittenberg and Daniel are the co-owners of Hertzel Enterprises LLC. Attorney Peretz formerly represented Hertzel and now represents Daniel. Wittenberg filed suit asserting claims, individually and derivatively on behalf of Hertzel, against defendants including Daniel and Peretz. Wittenberg alleged that Peretz breached his fiduciary duties of loyalty, care, and confidentiality by representing clients with interests adverse to those of Hertzel; using Hertzel’s confidential business information in his representation of clients with adverse interests; and conspiring with Daniel and others to dismiss with prejudice a cross-complaint that Hertzel had previously filed against Daniel. Peretz filed a special motion to strike under the anti-SLAPP law (Code Civ. Proc. 425.16). The trial court declined to strike the causes of action for breach of fiduciary duty and conspiracy, finding they arose not out of Peretz’s litigation conduct but the alleged breaches of his professional obligations. The court of appeal reversed, finding that Peretz carried his burden to show the two causes of action arise, in part, from protected activity, so that the burden shifted to Wittenberg to show minimal merit on her claims based on the allegation of protected activity, which she failed to do. The act underlying Peretz’s liability for this particular allegation is protected litigation conduct. View "Wittenberg v. Bornstein" on Justia Law

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After an attorney representing a grieving family was fired, the family's new attorneys asked the attorney for the case files, which he refused. Instead, the attorney demanded $308,000 in attorney fees. The trial court awarded a lesser amount. The attorney contends it was an abuse of discretion for the trial court to refuse to apply the written terms of his retainer agreements. The court cannot say, based on the record the attorney gave to the court, that the trial court did any such thing. Rather, it appears that the trial court properly judged the attorney's evidence to be weak and discounted it appropriately. The court held that the $17,325 award was reasonable where the attorney never hired a court reporter and thus there is no record of the hearing; the attorney never gave his files to the new attorneys; and the attorney never explained the discrepancies in his supposed recordkeeping. The court published to underline that contemporaneous time records are the best evidence of lawyers' hourly work. The court wrote that they are not indispensable, but they eclipse other proofs. In this case, the trial court was entitled to discount the attorney's belated and contradictory claims about his time on the case. The court held that the remaining issues are insubstantial. View "Taylor v. Traylor" on Justia Law

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Spikener purchased a car under a credit sales contract; the seller did not inform Spikener that the car had been in a major collision. Before Spikener learned about the collision, the contract was assigned to Ally. The Contract complied with the Holder Rule, 16 CFR 433.2, which requires consumer credit contracts to include a notice: “ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.” Plaintiff sued Ally under the California Consumers Legal Remedies Act (CLRA). Ally agreed to rescind the contract and refund the amount Spikener had paid: $3,500. Spikener unsuccessfully sought $13,000 in attorney fees under CLRA’s fee-shifting provision. The court cited “Lafferty,” which held a debtor cannot recover damages and attorney fees for a Holder Rule claim that exceed the amount the debtor paid under the contract. The FTC construes the Holder Rule in the same manner. In response to Lafferty, Civil Code 1459.5, was enacted, providing that the Holder Rule’s limitation on recovery does not apply to attorney fees. The court of appeal affirmed. The FTC’s construction of the Rule is entitled to deference; to the extent section 1459.5 authorizes recovery of attorney fees on a Holder Rule claim even if that results in a total recovery greater than the amount the plaintiff paid under the contract, it conflicts with, and is preempted by, the Holder Rule. View "Spikener v. Ally Financial, Inc." on Justia Law

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Noe hired attorney Dorit to evaluate the medical records of Noe’s deceased mother for a potential medical malpractice suit. Noe agreed to pay Dorit a $10,000 non-refundable retainer fee, intended to cover Dorit’s time spent evaluating the claim, plus “the costs of additional medical records and/or expert medical review if indicated.” The agreement stated, “Should there arise any disagreement as to the amount of attorney fees and/or costs, Client agrees to enter into binding arbitration of such issue or dispute before the Bar Association of San Francisco.” Ultimately, Dorit said he did not think a malpractice claim was viable. Noe later asked Dorit to return some or all of the retainer fee. Dorit refused. Noe filed a request for arbitration. An arbitrator awarded Noe nothing and allocated him the entire filing fee. Because neither party requested a trial de novo, the award became binding under the Mandatory Fee Arbitration Act MFAA). Months later, Dorit sued Noe for malicious prosecution based on the initiation of arbitration. Noe filed a special motion to strike under Code of Civil Procedure section 425.16, the anti-SLAPP statute. The court of appeal reversed the denial of his motion. A malicious prosecution claim cannot be based on an MFAA arbitration. View "Dorit v. Noe" on Justia Law

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The Court of Appeal held that the trial court abused its discretion in awarding any attorney fees to plaintiff. Labor Code section 218.5 mandates an attorney fee award in any action brought for the nonpayment of wages, if any party requests them at the initiation of the action. Furthermore, Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1255, held that a plaintiff cannot obtain attorney fees in an action for failure to provide rest breaks or meal periods. In this case, there was no basis for the trial court's award of fees where the only wage and hour claims alleged and litigated were for rest break and meal period violations. The court held that plaintiff's claim that it must affirm the judgment because defendants presented an inadequate record for judicial review is unfounded. The court also rejected plaintiff's contention that the predicate misconduct of her wage and hour claims was not rest period violations, but rather failure to pay earned wages. The court explained that this theory was reflected nowhere in the record of the attorney fee proceedings—until plaintiff filed her reply papers. In those reply papers, plaintiff cited no evidence of any work performed before the settlement that referred to or suggested the existence of a claim or cause of action for failure to pay earned wages. Accordingly, the court reversed the judgment to the extent it awarded attorney fees to plaintiff, remanding for entry of a new and different judgment denying recovery of attorney fees. View "Betancourt v. OS Restaurant Services, LLC" on Justia Law

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Nguyen worked as a dentist until she was terminated. Nguyen hired attorney Ford, who filed a discrimination lawsuit. The federal district court entered judgment against Nguyen. Ford’s retainer agreement with Nguyen specifically excluded appeals. Nguyen hired Ford to represent her in an appeal and signed a separate retainer agreement. Nguyen alleges that during the appeal to the Ninth Circuit, Ford charged exorbitant fees and costs, and caused unnecessary delays. In April 2015, Ford successfully moved to withdraw as counsel. The Ninth Circuit affirmed the judgment against Nguyen. Nguyen sued Ford for legal malpractice and breach of fiduciary duty, stating “Although [Ford] continued to represent [Nguyen] in the district court tribunal, [Nguyen] had to retain new appellate counsel” and that, but for Ford’s untimely filing of a brief in the district court case, summary judgment would not have been granted against her. The trial court dismissed the action as untimely (Code Civ. Proc., 340.6(a)). The court of appeal affirmed. No reasonable factfinder could conclude it was objectively reasonable for Nguyen to believe Ford continued to represent her in the district court action. Once Ford filed notices in that case describing herself as Nguyen’s former attorney and stating she was placing a lien for on any judgment in Nguyen’s favor, any objectively reasonable client would have understood that Ford was no longer representing Nguyen. View "Nguyen v. Ford" on Justia Law