Justia Legal Ethics Opinion Summaries

A Public Records Act request in this case was made on behalf of Fowler Packing Company, Inc. (Fowler) and Gerawan Farming, Inc. (Gerawan) in response to the 2015 enactment of Assembly Bill 1513 (AB 1513) codified in Labor Code section 226.2 (Stats. 2015, ch. 754, § 5 (2015 - 2016 Reg. Sess.) eff. Jan. 1, 2016). AB 1513 addressed the issue of minimum wages for employees paid on a piece-rate basis (i.e., paid per task) and included safeharbor provisions that provide employers with an affirmative defense against wage and hour claims based on piece-work compensation so long as back pay is timely made. The safe-harbor provisions contained carveouts that placed the safe-harbor provisions out of reach for several California companies including Fowler and Gerawan. The Public Records Act request at the heart of this case sought in pertinent part: “Any and all public records referring or relating to communications between the California Labor & Workforce Development Agency, its officers, and its staff and the United Farm Workers of America regarding AB 1513;” “Any and all public records referring or relating to the statutory carve out for any ‘claim asserted in a court pleading filed prior to March 1, 2014,’ as codified in AB 1513 section 226.2(g)(2)(A);” and, “Any and all public records referring or relating to AB 1513” and Fowler and Gerawan. The trial court ordered the Agency to produce “an index identifying the author, recipient (if any), general subject matter of the document, and the nature of the exemption claimed” to justify withholding information in response to a request for documents under the Public Records Act. The Agency petitioned for writ relief to the Court of Appeal to prevent disclosure of the identities of the parties with whom the Agency communicated confidentially in formulating AB 1513, the substance of these communications, and communications with the Office of Legislative Counsel (Legislative Counsel) during the drafting process. The Court of Appeal granted a stay and issued an alternative writ to allow consideration. Based on the California Supreme Court’s guidance in Times Mirror Co. v. Superior Court (1991) 53 Cal.3d 1325, the Court concluded the trial court’s order erred in requiring disclosure of matters protected by the deliberative process and attorney work product privileges. Accordingly, the trial court was directed to vacate its order directing the Agency to produce an index disclosing the author, recipient, and general subject matter of documents generated relating to the process of drafting AB 1513. View "Labor & Workforce Development Agency v. Superior Court" on Justia Law

California-American, a water utility, and Marina and Monterey, public water agencies, entered into contracts to collaborate on a water desalination project, stating that the prevailing party of “any action or proceeding in any way arising from [their a]greement” would be entitled to an award of attorney fees and costs. After learning that a member of Monterey’s board of directors had a conflict of interest, having been paid for consulting work to advocate on behalf of Marina, California-American sued to have the contracts declared void under Government Code section 1090. Monterey agreed that the contracts were void. Marina filed cross-claims seeking a declaration that the contracts were “valid and enforceable.” Years of litigation culminated in a holding declaring the agreements void. Marina challenged post-judgment orders that California-American and Monterey were entitled to costs as prevailing parties under Code of Civil Procedure sections 1032 and 1717 and granting them specific attorney fees awards. The court of appeal affirmed, rejecting Marina’s argument that they were not entitled to awards because the underlying contracts were declared void. The illegality exception to the rule of mutuality of remedies applies when the contract's subject matter is illegal but does not apply when the litigation involves the “invalidity” or “unenforceability” of an otherwise legal contract. View "California-American Water Co. v. Marina Coast Water District" on Justia Law

Optional filed suit against DAS and its counsel, Akin and Parker, for conversion and fraudulent transfer. Akin and Parker filed special anti-SLAPP motions to strike all claims asserted against them. The Court of Appeal affirmed the trial court's grant of defendants' motions, holding that Optional v. DAS Corp. (2014) 222 Cal.App.4th 1388, was not the "law of the case" for purposes of this appeal; defendants made a prima facie showing that plaintiff's claims arose from defendants' constitutionally protected petition rights where the gravamen of plaintiff's claims was protected activity, namely defendants' representation of DAS in litigation; and plaintiff did not show a probability of prevailing on its claims where the litigation privilege defeated plaintiff's claims. View "Optional Capital, Inc. v. Akin Gump Strauss, Hauer & Feld LLP" on Justia Law

Francisco Diaz was employed as a tree trimmer by Professional Community Management, Inc. (“PCM”) for many years. He filed his complaint against it in October 2014, stating various causes of action arising out of PCM’s alleged failure to reasonably accommodate the workplace restrictions imposed by his doctor, its alleged retaliation, and its alleged wrongful termination of his employment. PCM answered the complaint in December 2014, denying the allegations and pleading 24 affirmative defenses. The 24th affirmative defense alleged that Diaz’s complaint “and each cause of action, is barred by [his] failure to exhaust contractual remedies available to him, including, but not limited to, the grievance and arbitration procedure under the collective bargaining agreement between [PCM] and [Diaz’s] collective bargaining representative.” PCM unilaterally orchestrated the issuance of an appealable order by: (1) applying ex parte, a mere 11 days before trial, for an order shortening time to hear its motion to compel arbitration; (2) voluntarily submitting a proposed order to the trial court that not only reflected the court’s denial of the ex parte application (the only ruling reflected in the trial court’s own minute order) but also included a denial of the motion on the merits; and (3) promptly appealing that order, which then stayed the scheduled trial. The Court of Appeal concluded PCM carefully tailored the order it proposed the trial court issue, incorporating what it characterized as the trial court’s reasons for rejecting the summary judgment motion, and excluding any mention of issues that might distract from that analysis. PCM continued its aggressive strategy on appeal, contending Diaz was precluded from arguing that PCM had waived its right to compel arbitration. According to PCM, Diaz could not make that argument because the trial court’s premature denial of the motion to compel (at PCM’s request) meant Diaz never argued waiver in an opposition to the motion; and because the order PCM drafted did not reflect the trial court had relied on it as a basis for denying the motion. Instead, PCM claimed Diaz was relegated to defending the court’s ruling based solely on the analysis PCM crafted in its proposed order, and that the Court of Appeal assess the propriety of that order based solely on that analysis. The Court of Appeal concluded that PCM invited the trial court’s alleged error when it proposed the court issue the very ruling it now challenged on appeal. “By doing that, PCM won the battle - it got the court to issue the appealable order it sought, prior to trial - but it lost the war.” A party that invites the trial court to commit error is estopped from challenging that error on appeal. The Court concluded PCM and its counsel acted in bad faith, generating an appealable order they knew the trial court had not intended to issue at the ex parte hearing, for the purpose of obtaining a delay of trial. It imposed monetary sanctions against PCM and its counsel for bringing a frivolous appeal. View "Diaz v. Professional Community Management, Inc." on Justia Law

The Court of Appeal reversed the trial court's order granting attorney fees to respondent after the trial court entered an interlocutory judgment of partition in her favor. In this case, the trial court found that an attorney fee provision in an earlier settlement agreement applied to the partition action, and awarded all fees to plaintiff under Civil Code section 1717 rather than apportioning the costs of partition under Code of Civil Procedure section 874.040. The court held, however, that the partition action did not fall within the terms of the attorney fee provision. Accordingly, the court remanded for further proceedings. View "Orien v. Lutz" on Justia Law

Denton sued his employer, San Francisco, alleging workplace retaliation, disability discrimination (disparate treatment, failure to accommodate, failure to engage in the interactive process), defamation, violation of the Confidentiality of Medical Information Act (Civ. Code 56), hostile work environment harassment, and failure to prevent harassment, discrimination, or retaliation, and against his supervisor, alleging defamation and hostile work environment harassment. After defendants moved for summary judgment, negotiations led to a settlement ($250,000). Denton’s then-counsel filed a notice of conditional settlement. A week later, after Denton discharged his attorney, defendants’ counsel successfully applied ex parte to have the settlement set aside, despite Denton twice assuring defendants’ counsel that he was not backing out of the settlement. Four days later, at the hearing on defendants’ summary judgment motion, Denton, appearing in propria persona, requested a continuance to oppose the motion. The trial court denied the request and granted defendants’ motion as unopposed. The court of appeal reversed. The trial court abused its discretion. To the extent the court implied that Denton was not diligent, the implication is not supported by the record. Defendants’ counsel acknowledged as much at the hearing. View "Denton v. City and County of San Francisco" on Justia Law

The dispute underlying this appeal was between a contractor (respondent) and subcontractor (appellants). The parties sued each other for alleged damages arising out of a construction project on California State Route 91. Respondent moved to disqualify Pepper Hamilton LLP and its individual attorneys (collectively, Pepper Hamilton) from representing appellants in this action and to issue additional injunctive relief pertaining to confidential documents. Respondent claimed that appellants’ litigation counsel, Pepper Hamilton, had improperly accessed documents made available by respondent solely for mediation sessions that preceded the commencement of the action. The court granted the motion, finding disqualification was appropriate to eliminate the possibility that Pepper Hamilton would exploit the unfair advantage. Appellants filed a petition for writ of supersedeas, arguing: (1) their appeal of the disqualification order resulted in an automatic stay of all trial court proceedings; or (2) if there was no automatic stay, the Court of Appeal court should exercise its discretionary power to stay all trial court proceedings. The Court indeed issued a temporary stay of all trial court proceedings and invited further briefing by the parties on the issue of whether an appeal of an order disqualifying counsel result in an automatic stay pursuant to Code of Civil Procedure section 916? If so, how far does the automatic stay extend: solely to enforcement of the disqualification order or to all trial court proceedings? As a matter of first impression, the Court of Appeal concluded the appeal automatically stayed enforcement of the order disqualifying counsel, but not all trial court proceedings. The Court declined to address appellants’ request for a discretionary stay of all trial court proceedings pursuant to section 923. View "URS Corp. v. Atkinson/Walsh Joint Venture" on Justia Law

Defendants Steve George and Real Estate Portfolio Management, LLC (REPM) appealed a trial court’s order granting the motion of plaintiffs Angelica Lynn and Angel Lynn Realty, Inc. (ALR) to disqualify counsel. George and REPM were represented by attorney Kevin Spainhour and his law firm, Spainhour Law Group (SLG), who were the subjects of the motion to disqualify. Spainhour represented George for over 15 years and REPM for several years. Lynn and ALR alleged in their complaint that they had formed a partnership with George and REPM for buying and selling real property. Lynn and ALR moved to disqualify Spainhour and SLG on the ground they had represented the alleged partnership and had provided Lynn legal advice relating to a proposed sale transaction. Alternatively, Lynn and ALR asserted they had a confidential non-client relationship with Spainhour and SLG. The trial court expressly found that neither Spainhour nor SLG had represented Lynn or ALR in their individual capacities, nevertheless, the court found there had been a confidential non-client relationship between Lynn and ALR, on the one hand, and Spainhour and SLG, on the other, and a “potential attorney-client relationship with the alleged partnership.” Based on those findings, the court granted the motion to disqualify. The Court of Appeal reversed, finding the evidence did not support the trial court’s finding of a confidential non-client relationship. View "Lynn v. George" on Justia Law

Defendant Anice Plikaytis appealed an order awarding her attorneys' fees in a breach of contract action brought by plaintiff Debra Roth. In the published portion of its opinion, the Court of Appeal agreed with Plikaytis's contention that the trial court erred when it declined to consider previously filed documents she incorporated by reference as part of her motion. In the unpublished portions of the opinion, the Court discussed Plikaytis's arguments that: (1) the court failed to apply the lodestar method; (2) erroneously denied fees for equitable and cross-claims and for obtaining relief from bankruptcy stays; and (3) substantially reduced her award without explanation. The Court of Appeal concluded the trial court erred by denying fees for obtaining bankruptcy stay relief that related to the breach claim and failing to provide an adequate justification for significantly reducing the number of hours allowed. Accordingly, the trial court was affirmed in part, reversed in part, and the matter remanded with directions. View "Roth v. Plikaytis" on Justia Law

Defendants Beachcomber Management Crystal Cove, LLC (Management) and Douglas Cavanaugh (collectively, Defendants) challenged a trial court’s order disqualifying the law firm of Kohut & Kohut LLP (Kohut) from continuing to represent Defendants in the underlying matter. In March 2016, Plaintiffs filed this lawsuit on behalf of Beachcomber at Crystal Cove, LLC as a shareholder derivative action against Defendants. The complaint named the Company as a nominal defendant and alleged claims for fraud, breach of fiduciary duty, abuse of control, gross negligence and mismanagement, breach of duty of honest services, unjust enrichment, declaratory relief, and accounting. Plaintiffs alleged Defendants abused their position as the Company’s managers by diverting Company funds to other Cavanaugh entities, paying themselves unauthorized management fees, misallocating expenses the Company shares with other entities, and refusing to provide Plaintiffs complete access to the Company’s books and records. Defendants hired Kohut to represent them in this lawsuit, and the Company hired independent counsel, the law firm of Corbin, Steelman & Specter, to represent it in this lawsuit. In May 2016, Plaintiffs filed a motion to disqualify Kohut “from any further participation in this case” based on conflicts of interests arising from its past and present representation of the Company and Defendants. Specifically, Plaintiffs argued disqualification was required based on the conflicts of interest arising from: (1) Kohut’s concurrent representation of the Company and Defendants; (2) Kohut’s successive representation of the Company and Defendants concerning the disputes over the Company’s operations; and (3) the need for Kohut to testify in this lawsuit about the services it provided to the Company and Defendants. Here, the trial court concluded disqualification was mandatory because: (1) Defendants and the Company had conflicting interests because the Company is the true plaintiff in this derivative suit that Plaintiffs brought against Defendants on the Company’s behalf; and (2) Kohut previously represented the Company concerning some of the issues raised in this suit, and a substantial relationship therefore existed between that representation and Kohut’s representation of Defendants in this lawsuit. The Court of Appeal concluded the trial court erred because it failed to apply a more specific line of cases that governed an attorney’s successive representation of clients in a derivative lawsuit brought on a small or closely held company’s behalf against the insiders who run the company. View "Beachcomber Management Crystal Cove v. Super. Ct." on Justia Law