California Civil Procedure Heise

California is a code state, based on code originally created by the Field brothers. Most law is codified, there is a statute that will govern the basics of almost every procedural questions.

Code of civil procedure identifies the written law and the unwritten law. CA can develop what procedural requirements it wants, but they must comply with the Fourteenth Amendment.

California Code of Civil Procedure. Most basic procedural questions can be answered with reference to the code of civil procedure. Important procedural law is contained in other codes—Family Code, etc.

California Rules of Court—Judicial counsel has the authority to develop the rules of court and to augment the code of civil procedure, but also to cover things that are not covered in the code. Most current are the rules dealing with the publications of current Court of Appeals decisions.

Basic rule is that you cannot generally speaking cite to an unpublished opinion. If you do that, you may be sanctioned (you can do it for exceptions, such as res judicata or collateral estoppel). As precedent, unpublished opinions have no persuasive value.

When can you cite to an opinion of the court of appeal? Some opinions may be in limbo for a while. What do the rules say about that? See rule 8.1115—Once a court of Appeals cites an opinion for publication, you can cite it…BUT there is an exception, the Supreme Court can decide to depublish an opinion of the Court of Appeal that the Court of Appeal certified for publication.

There are also local rules of court. Today, local rules do not play quite as significant role as a source of procedural law, in part because the judicial council has made it clear that some state rules will preempt local rules.

There are lots of time deadlines for local rules that won’t appear in state deadline rules. There are local rules

State ex rel. Public Works Board v. Bragg

What gave rise to the sanction? Local rule of the LA Superior court in terms of timing. What is the consequence of not filing a timely and adequate appraisal? The trial court grants the motion to exclude the exhibit. What is the ultimate consequence on the state? They can’t submit appraisal evidence.

Main issue focuses on the sanction, whether or not it is appropriate, the sanction for violating a local rule. There is no question that pursuant to state law, that a local court is authorized to impose sanctions in a proper case for violation of local rules. What is the argument over?

Was there any indication that the state was at fault? Not at all, the court concludes that this sanction is inappropriate, and there was no finding that the client was at fault and it adversely affected the client’s cause of action. The court says, if you are going to sanction somebody, sanction the client. Attorney’s are sanctioned monetarily.

If the attorney doesn’t raise it, is 575.2 raised? Yes, it has to be raised, it is self executing law, it must be raised regardless of if the attorney waives it.

Tliche case:

Plaintiff was unable to serve the defendant within the 60 day period required by another LA Superior Court local rule.

Sanction for not serving in 60 days was dismissal. It was a case dispositive sanction.

Issue: was this sanction of dismissal consistent with the government code and was this consistent with the code of civil procedure? Does the code of civil procedure apply, or does the government code apply?

Does 575.2(b) apply to pure fast-track rules? Yes, this applies.

What does the court say about the propriety of this dismissal? Was the dismissal proper? Why is the dismissal not proper? This sanction was inappropriate, there was no evidence that this was the client’s fault and there was no evidence that a lesser sanction would be ineffective.

The other big category of source of law is unwritten law. Unwritten law is defined as law not promulgated and afforded, but nonetheless is observed and administrated in the courts.

An argument that can be made are that learned treatises are unwritten law. The prevalent rule is that treatises are not laws themselves, they are just persuasive to what the law might be. California courts rely heavily on certain treatises, such as the Witkin treatises.

Earl W. Schott, Inc. v. Kalar

In order to get a default judgment against a corporation, must your complaint have alleged that that party was a corporation? Must the complaint name the business entity in its right capacity? Here the complaint did not identify the defendant as a corporation, but the defendant was a corporation and the default judgment named the defendant as a corporation. In the absence of authority, the court turns to a treatise, Wheel and Brown, they don’t treat it as if it is the law, but they follow the treatise. Footnote 4 on page 28.

Limited v. Unlimited Civil Case

Limited civil case amount in controversy is less that $25,000—it will be considered to be a limited civil case and will be subject to limited civil procedures.

Anything else is an unlimited civil case and will be tried as any other case would.

This makes a difference in appeals. In unlimited you have the right to appeal to a Court of Appeal.

In a limited civil case, you have the right to appeal to the appellate division of the superior court.

Old distinction between municipal and superior are gone, but the jurisdictional distinction is still present.

Few cases are published in CA, only about 15% of civil appellate opinions are published.

Review by the CA supreme court is discretionary.

STATUE OF LIMITATIONS:

1. Which statutory limitation period is applicable to a particular cause of action?

2. At what point does a cause of action accrue such that the SOL begins to run?

3. Whether or not there are any doctrines which toll or suspend the SOL after it has accrued—there are several doctrines.

4. Look at the concept of commencement—the general rule is that a cause of action is commenced when the complaint is filed with the court. Focus on some of the pre-commencement requirements that CA requires for certain types of action, for instance the Government Claims Act.

5. Doctrines in CA which extend the SOL after an action has been commenced.

Statutes of Limitation:

- SOL Primary Purpose is to protect the defendant and the courts from stale claims. Secondary purpose is to require plaintiffs to act diligently if they think they have a COA. Overall the purpose may be to promote certainty. At some point the plaintiffs, courts, and defendants will know that litigation is no longer a possibility.

Missing the statute of limitations is the number one cause of malpractice.

Difficult topic, ascertaining the applicable statute of limitations. Over 1500 separate time limits in the various California Codes. Tricky part is to figure out what cause of action applies to each claim. There is considerable statutory overlap. The language of several statutes of limitations may apply to your particular cause of action or theory of liability, and this isn’t a problem if they all have the same time period, but they often do not, you must figure out which one apply to your case and which do not.

Sometimes more specific statutory limitations will take precedent over the more general.

Many situations where those general rules don’t help and you have to do your best. If you don’t know which SOL applies, you are well advised to use the shorter statute of limitations.

In any lawsuit you are going to have various theories of liability, and after each theory of liability or remedy you are seeking there might be a different SOL. In any case that is reasonably complex, it is typical to have multiple SOL. Multiple theories of liability can be covered by different SOL. Look at a case based on the overall theories of liability rather than as an overall case.

Contractual Modification of Statutory Limitation period:

CA statute does allow consensual extension by contract of SOL for up to 4 years.

CCP 360.5.

Why is that important, by the way? What is the primary situation where parties will want to extend the SOL? If they are working on a settlement.

Can you contractually shorten the statute of limitations? Yes, look at p. 83, there is case law authority and some statutory authority for parties to agree to a shorter SOL, so long as that time is reasonable. Even though the SOL may be 4 years, the parties may contractually agree to shorten it to 2 years or 1 year, so long as it is considered to be reasonable.

Specifically in regards to insurance, the insurance code authorizes most insurance companies to shorten the SOL to one year in the insurance policy. There is specific statutory authority for this.

LEGISLATIVE MODIFICATION OF SOL:

What is the effect of the legislature modifying the statutory time period? What is the effect of an abridgement by the legislature of the statutory period by the legislature? They have the power to do this, and so long as the effective parties still have a reasonable period of time to commence the action, the shorten time will be applied.

What about statutory enlargement of the statutory limitations? CA legislature is constantly making larger certain SOLs.

-The question is can it be applied retroactively with regard to claims that have been not filed in court yet, but barred under the old statute of limitations? The answer generally speaking is yes, they can do so. What if the time has run out? In that situation the question is one of statutory construction. If the time has already expired on this claim, can the legislature revive it? Yes, so long as there is a clear expression in the amended statute of limitations to make it apply retroactively. This is true even if the case is in litigation over the statute of limitations issue. I.e. defendant raises SOL, court dismisses action on demurrer and the case is on appeal via plaintiff over this issue and the legislature modifies that SOL to make it longer-- again, if the legislature intended the statute to act retroactively, the answer is yes. More difficult question, can the legislature revise a cause of action by revising the statute of limitations when the court has already dismissed an action as untimely under the former statute of limitations. No, not after it is dismissed.

Supplement, Perez v. Rowe, Court of Appeal, held that no, a legislature cannot revive a COA that had already been previously dismissed by court based on the former SOL. To do so would violate notions of separation of powers. (ask about appeal for this, what distinguishes this dismissal from the appeal case above).

The question of accrual, when does the COA accrue so that the SOL begins to run?

General proposition is that accrual has been left to the courts. There are some statutes which specify the specific COA—i.e. child molestation, but generally this has been left for the courts.

Jolly v. Eli-Lily and Company

case which is on page 86.

FACTS: Case typical of a number of cases brought in across the country. DES birth defect case.

When did the plaintiff start to experience injuries? 1972. In 1972, there were some pre-cancer cells. The injuries became more acute from 1976 to 1978.

She then engages some activity to start a lawsuit, but she doesn’t bring a lawsuit until 1981. Why did it take her so long to file this lawsuit? The main problem is that she did not know who to sue. DES is manufactured by several companies across the country and she did not know who to sue.

What had happened that cause her to commence an action against defendant Lily and some others? What happened in 1980. Sindell v. Abbott laboratories was decided, bringing fourth the market share liability doctrine. Based on who produced the drug and on their market share, that producer could be liable. It shifted the burden to the defendant to prove that their DES was not the one that plaintiff ingested. Jolly filed her complaint within one year after the Sindell suit.

The question for the state Supreme Court is, is this lawsuit timely? When did this 1 year SOL for personal injury actions accrue such that the one year period began to run?

What is the delayed discovery rule in California? When does a tort cause of action begin to accrue for the purposes of the statute of limitations?

DELAYED DISCOVERY RULE:

Page 89—Under the discovery rule, the SOL begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone had done something wrong to her.

First question, the court uses the concept of ‘wrong’ and ‘wrongdoing’ what do they mean by this? How is wrong/wrongdoing defined? Don’t have to know wrongdoing, you just have to be suspicious. You don’t have to know all the facts, you just have to be suspicious. How does the court define wrongdoing, must you be suspicious that what the defendant has done has violated a statue or common law? No, if you look at footnote # 7, wrong, wrongful, etc., are used in their lay understanding. This is significant because you don’t have to meet some legal definition of wrongdoing. You don’t have to know if it is a tort, if you suspect wrongdoing in a lay sense, that is sufficient.

So far: the COA accrues for the delayed discovery rule when the person has noted or discovered the injury and you suspect that your injury has been caused by wrongdoing in the lay sense.

Under the CA discovery rule, is accrual delayed until you know who caused your wrongdoing? Who caused your wrongdoing is not an element of wrongdoing. Why is this? What is the policy reason behind this? In CA they let you have the DOE rule. What is the policy behind the rule (it was developed before the DOE rule)? It is to encourage vigilance on the part of the plaintiffs. Once you know you are injured and you suspect wrongdoing, a diligent plaintiff will go out there and try to find who did it, at least enough to file a lawsuit against that defendant in good faith. Another example of a policy standpoint of making sure the plaintiff is diligent in filing the lawsuit in a diligent manner.

Here, the plaintiff was diligent, but she could not sue, and did not sue within one year of her injuries. So did she file this action within one year after she knew of her injuries and suspected wrongdoing on the part of someone?

Question is--When did Ms. Jolly know her injuries and suspect that they were caused by wrongdoing on the part of somebody? 1978. See footnote 9 on page 90-91—excerpts from her deposition. Q: In 1978 did you feel like you had some sort of recourse? A: Yes. Q: Did you feel someone had wronged you? A: Yes.

Questions about accrual are always factual questions. Should be asking defendant questions like were asked in this case to try to get a factual record of when plaintiff suspected wrongdoing.

She makes two arguments—the argument in the immediate case is based on the Sindell decision.

The effect of Sindell on the accrual of the current action—

Her argument: Sindell creates a new cause of action in 1980, and that is significant because it is a new cause of action and you can argue that this is a new accrual point. It is not a horrible argument, but it does not prevail. Why does it not prevail?

Did Sindell create a new cause of action according to the state Supreme Court? Court said that Sindell did not create a new cause of action, it just demonstrated the legal significance of facts already known to the plaintiffs. It just took known facts about market share and created a new legal significance to those facts.

Why is this significant? This fits in to another **general rule** about SOL and accrual, which is that the statute of limitations accrual is not delayed simply because the plaintiff doesn’t understand or appreciate the legal significance of facts that are known to her.

Ms. Jolly knew all the facts before Sindell was filed, she just didn’t know the legal significance of the facts until after Sindell was decided. Just like Ms. Sindell, Ms. Jolly could have argued the market share theory. Action properly dismissed on summary judgment.

Note that as the notes point out afterwards, the statement of the accrual, has both a subjective and an objective component of it. The rule is that under the discovery rule SOL begins to run when the plaintiff suspects, or should suspect that someone has done something wrong to her. If the plaintiff has actual suspicion of wrongdoing, even though a reasonable person wouldn’t, that would be sufficient to commence the SOL. Look at actual subjective suspicion, as well as objective. If a reasonable person would have actual suspicion of wrongdoing, the SOL will accrue, even though the plaintiff did not have actual suspicion. Notes that cover this on page 104 and 105.

Kitzig

case on the bottom of page 104—actual suspicion doctor was not treating her properly, secondary opinion says first doctor is doing fine. Does the COA accrue when plaintiff has suspicion that doctor is doing something wrong and making her consult another doctor? Majority says no, this is not actual suspicion of wrongdoing. Appeal case, this issue is still up in the air.

Another note case that has proven to be quite a significant case.

Bristol-Meyers Squibb v. Superior Court

pp 102-3. case: breast implants had ruptured during a bar fight and they were migrating down her arm and causing injury. Consulted an attorney in 1984 about a possible malpractice action against her doctor and suits against her assailant and against the manufacturer of her breast implants. Decides not to sue, but in 1990 reads that implants may be defective and files a suit against the implant manufacturer in 1991.

Post Jolly case-so they are applying Jolly rule, the question is whether or not as with regards to the manufacturer, this lawsuit was timely filed. The court said the action was barred, you clearly suspected wrongdoing in 1984, when you consulted an attorney. Her argument was that she suspected wrongdoing on the part of the doctor, not the part of the manufacturer, I did not suspect wrongdoing on the part of the wrongdoer until 1990. The court said that based on Jolly, when you suspect wrongdoing on the part of “someone” the COA accrues on part of all potential defendants. Thus, the lawsuit was barred by the SOL.

Bristol harsh application.

Fox v. Ethicon

case in the supplement on page 8 (supreme court takes a closer look at Bristol Meyers Squibb case):

The plaintiff, miss Fox had a gastric bypass surgery and soon after she had the surgery she realized that something was not quite right with the gastric bypass. She was aware of her injury in April of 1999. She then files a lawsuit on June 28, 2000. She sued the doctor and the hospital for negligently putting in the gastric bypass staple. She also comes through with DOE accusations as well.

How was the action against the hospital and doctor timely? There is a special statute applicable to medical malpractice actions which requires you to send a note to the doctor to put them on notice that they are being sued, and if you do this, it will suspend the SOL for 90 days. That is why the initial lawsuit against the doctor was timely, because of this special statute (notice that more than a year had elapsed from finding of wrongdoing and filing).

She engages in discovery and then begins to suspect that there is another wrongdoer, and that wrongdoer is a manufacture of the stapler, and she then amends the complaint to add in this new defendant on the theory of product liability. This is Ethicon Endo. This amended complaint is dated Nov. 28, 2001. Adds a theory of products liability.

Ethicon says that this action is untimely, you are bringing us into the lawsuit.

Why can’t she use DOE defendant practice to bring in the new defendant? If you use DOE you must commence the action in a timely fashion, and as to DOES that may be responsible for products liability there is a one year SOL and there is no tolling provision. The second reason is that the DOE allegations are crafted poorly and are not broad enough, they seem to only apply to agents of the hospital.

Because of the only analysis for the court is whether or not the amended complaint is timely as to the manufacturer. The question is when does the cause of action for products liability accrue? The trial court says that based on Bristol Meyers Squibb, in April 1999 you suspected wrongdoing by someone, so therefore, the cause of action accrued to all defendants, including the manufacturer.

What does the CA Supreme Court say about that doctrine? Does the court conclude that the amended complaint was properly dismissed? No, the court does not conclude that.

What is the new rule that the court adopts here? How is this consistent with the Jolly case—and the statement that the COA accrues when you suspect cause of action on the part of someone. The court suggests that a reasonable person would not suspect wrongdoing on the part of the manufacturer. How does this weave in to the basic Jolly doctrine?

One of the key things here is that the rule will only apply where the plaintiff can allege and prove that they could not have found out about the other kind of wrongdoing through diligent investigation. If you can allege and prove that you could not have found out about this products liability action within one year through reasonable diligence and investigation, then we will let you take advantage of this new doctrine. Now there is going to be a second accrual point as to this manufacturer, this is difficult for the plaintiffs to prove. Policy—plaintiff should be diligent.

How would you assess Ms. Fox’s chances when the case is judged on the merits?

How does the court further limit the Fox doctrine? Not only does the plaintiff have to establish that they could not have found out about the wrong doing, but what else about the wrong doing must exist? In addition to being diligent there must be a situation where there is tortious conduct of a wholly different source, see quote on p. 13. How else do when know when the conduct will be different? There is no guidance on this point, and lower courts have had to struggle with this.

2-things to satisfy: diligence and toritous conduct of a wholly different source.

Why limit it to instances of wholly different torts? Don’t want to create an exception that is more broad than what exists. Attempt not to let action swallow up the whole rule.

One last thing, they make it clear that the holding in the Bristol-Meyers Squibb case is rejected. They disapprove of it. There are going to be times when the SOL will not necessarily begin to run as to all defendants. There will be times when it will not run.

Supreme Court decides another limitations case. Page 14 of supplement:

Grisham v. Phillip Morris case—

plaintiff is suing one defendant and sues based on multiple theories of liability and also sues for different types of injury.

Break down the complaint into two categories:

1. Economic damages—4 year statute of limitations (plaintiff paid a lot for cigarettes because she was addicted to them)

2. Personal injury—(emphysema and also gingivitis and other disease)

Personal injuries manifest themselves when they are diagnosed, in March and April of 2001 (one year SOL at this time). Commenced/files lawsuit in 2002.

Complaint creates issues for SOL: One is to figure out when the cause of action accrued with regard to the economic damages in regard to the unfair competition law. Factually when did this happen? When did she become addicted? In the early 1960’s, but she discovered she was addicted in 1993, although arguably it was as early as 1991. In other words, long before this lawsuit was filed. Court: These theories of liability are time barred, plaintiff suspected wrongdoing long before this lawsuit was filed, you knew that you were injured economically long before four years prior to filing the lawsuit in 2002.

Court has to deal with a number of doctrines that had been repeated by the CA court, but the court also had to deal with claim splitting. Claim preclusion doctrine—a single tort can be the foundation for but one claim of damages. Phillip Morris argues that this applies to statute of limitations. If you suffer injury via a tort, you have to bring it in one suit. Morris argues that this applies to SOL, so way back when you suffered the economic harm, you were aware of tortious activity and therefore your cause of action for physical injuries accrued way back then. How does the court respond to the longstanding rule that a single tort can be the source of one cause of action?

What does the court say about primary rights and res judicata, are the doctrines of primary rights and res judicata relevant to issues of when causes of action accrue for SOL purposes? The court says that the doctrines that are developed for res judicata really are addressing a different question (question of preclusive effect of a prior judgment), and they don’t apply to the SOL and accrual of SOL. This is significant because a lot of lower courts had taken doctrines about res judicata and applied them to SOL points, but the court says that they are developing new rules to deal with SOL questions.

What case do they rely on to analyze this particular situation? The Fox case, they say that here we have personal injury that is qualitatively different than the economic harm. Arises from qualitatively different conduct. This part of the lawsuit dealt with economic damages and the other part dealt with something very different, in the form of personal injury damages. Qualitatively different conduct. They use the basic Fox rationale—discovery of one cause of action does not necessarily mean that plaintiff should have discovered the factual basis for a qualitatively different cause of action.

Can we use it for different kinds of physical injuries? The court declines to address it, and they say that they will leave it for a later day.

Phillip Morris argues that in the Fox case there were two defendants with two different types of wrongdoing. Morris argues that this argument only applies when there are two defendants, but the court says that this is irrelevant. What is the holding of this case? The economic damages are time barred, because that action accrued long before the lawsuit was filed, but the personal injuries did not accrue until 2001, and so as to the personal injury part, the lawsuit was timely filed, at least based on the pleadings.

How does the court justify this from a policy standpoint? If it were otherwise, it would force plaintiffs to bring unsubstantiated claims into court.

Does this mean that anytime a defendant’s tortious act causes both economic damages and personal injury damages that you can separate the two out into the two different accrual points. What is the qualification that the court put upon this doctrine? As in Fox you have to prove that you were diligent in trying to discover your cause of action, and it limits it to situations where the factual basis for the two causes of action are qualitatively different.

How do you know when they are qualitatively different? Is a double injury qualitatively different?

Lower Court Opinions dealing with the discovery rule.

Evans v. Eckelman

Sexual molestation, plaintiffs alleged abuse in 1968, did not file action until 1987. Even with tolling, they were all adults in 1977 and longest SOL was 3 years. Question is whether or not the pleadings that were filed by the plaintiffs were sufficient to get over the objection of the SOL. First thing the court does is decide whether the delayed discovery rule apply to this statute of limitations. They decide that it does apply and they cite two different factors (often cited by courts to read the delayed discovery into SOL):

1. Apply it when it is difficult for plaintiff to catch or comprehend what occurred.

2. Look at relationship between parties, where one party is superior and owes a duty it comes into play. Analogize parental role to that of a fiduciary.

These two factors are used by pretty much all the courts to rule on the delayed discovery rule.

The allegations of the complaint did not, as a factual matter, provide a basis for the delayed discovery rule. Nonetheless, as a plaintiff, if you are going to use the delayed discovery rule you must anticipate the problem with the SOL, and in your complaint, you must plead facts that will bring your case within the delayed discovery rule. The court says the existing complaint does not contain sufficient facts to come within the delayed discovery rule, but you can amend the complaint to do so.

What does the court say the plaintiff is allowed to allege? The court says that if you were molested as a child you may not know that those acts were wrongful, or you could allege memory repression.

Moreno v. Sanchez

Defendant is a home inspector who was brought out to inspect a home plaintiffs wanted to buy. The inspector did not see anything wrong with the house, and so the plaintiffs bought the house. There is a contract which says that if you bring a lawsuit based on this inspection, you have one year after the date of inspection to bring the lawsuit. The inspection was Aug. 18, 1998. There were serious problems discovered after the inspection, and suit was commenced 14 months after inspection.

Issue: Whether this action is barred by the one year limitation in the contract.

Court decides whether or not the statute that governs this should be read to include the delayed discovery rule. The court concludes that yes, the statutes dealing with breach of duty by a home inspector are subject to the delayed discovery rule. The court reasons that this is a person who is holding themselves out to have special skills. And you are dealing with a type of injury that is difficult for the ordinary person to detect and defend. Good case to show how the discovery rule can be extended away from its classic doctors and lawyers and other professionals, now it is used for all kinds of people who hold themselves out to have special skills, particularly where it is difficult to detect injury.

The majority reads the delayed discovery rule into the statute. One statute in particular deals with this, business and professional code 799.

What is the argument that the delayed discovery rule should not be applied to the statute of limitations? This is not a statute of limitations that is vague about the accrual point, which many are. Business code: “Shall not exceed four years from the date of inspection.” Pretty clear about what the legislature thinks what should be the accrual point. Majority thinks that delayed discovery rule has to be read into it, and it does so.

Next question, what to do with the contractual provision which shortens the SOL to one year, within one year of date of inspection. The court says that it is unreasonable. Why is this particular clause unreasonable? The Court is unwilling to allow a contractual waiver of the delayed discovery rule. As a matter of public policy, it is unreasonable to waive that in a contract that says you have one year from the date of inspection to bring the action. That is the majority’s conclusion.

Dissent says that parties have the right to contract for a shorter statute of limitations and there is no reason why parties can’t contract out of the delayed discovery rule, for less than the statute of limitations. Freedom of contract.

What countervailing policy reasons may support the dissent?

-if you don’t like the contract, hire somebody else.

What countervailing policy reasons may support the majority.

-Put it into context of lots of other situation where the delayed discovery rule has applied, medical malpractice, etc. You could be guaranteed that every doctor would put in a contractual waiver shortening the SOL and getting rid of the discovery rule, and this would be something that would be contrary to public policy.

What really makes this contractual provision unreasonable according to the majority? Do you think it would have been unreasonable if the time hadn’t changed? If it was a 4 year SOL in the contract, but the K made it very clear that the accrual point was the date of inspection? Would this be unreasonable?

What happens if you have a K where you have a 2 year SOL, from the point of discovery? So you keep the point of discovery. What about if it was 1 year from the discovery of injury/breach of duty. These are tough questions. Long line of authority saying that you can shorten the SOL. As long as you don’t contractually negate the discovery rule, there is a good argument that you can shorten the time itself.

A good argument could be made that you could shorten the time, if you don’t remove the delayed discovery rule.

Legislative modifications of the discovery rule.

One way in which they have responded to this is childhood sexual abuse. Statute 340.1 is a long statute. Essence in terms of accrual points is that the time limitation is open. Statute, literally you could be 50 years old and if you were a victim of childhood sexual abuse and you didn’t until age 50 discover that the reason for your illnesses now was due to your childhood sexual abuse, once you discover that you have 3 years of which within to file a statute.

Statute: Child sexual abuse--8 years after you reach the age of majority, or 3 years after which you discover the reason for your illness.

Other examples of legislative nullification Page 117: Sales--Statute actually eliminating the discovery rule? COA accrues when the breach occurs, regardless of the aggrieved party’s lack of breach. Possible mitigating factors—1. it’s a 4 year SOL, and 2. there needs to be some finality with these actions.

Medical and Legal Malpractice:

Page 118—two other important statutes, that to have some degree have adopted, but capped the discovery rule. Those are the two statutes dealing with medical malpractice and legal malpractice. Legislature did adopt the discovery rule, but they put a limitation upon it. CCP 340.5 medical malpractice must be commenced within 3 of years injury, or 1 year after discovery of injury, or whichever comes first.

Legal malpractice 4 years after wrongful act or 1 year within discovery of act, whichever comes first.

DOUBLE INJURY:

The double injury problem in asbestos injury problem is as follows. If you were exposed to asbestos and ingested it, there is a whole progression of diseases which you could possibly get, but not everybody will go through the entire progression. Some percentage of people who get swollen lungs will get cancer, but not everybody. Legislature, how do we construct a statute which will force everybody not to sue at firs sign of lung problems? Special statute-- CCP 340.2 which provides as follows… for personal injury action for asbestos, an action must be commenced within 1 year after plaintiff discovers that he or she has suffered a disability caused by asbestos exposure, and defines disability as follows: loss of time from work, so the accrual point is delayed until you suffer from a condition where you are no longer able to work. Disability—once you are precluded from work. This is the accrual point. Retired people will never be disabled, so they don’t have a statute. Working people don’t have accrual until they are disabled.

The double injury problem, a problem that has confounded many courts/scholars for years and years.

Miller

case on page 132—

Defendant engages in a tortious act, that act causes immediate injury, which is sufficient to bring a lawsuit, but it is not that serious. Then plaintiff suffers catastrophic or really major injuries at a much later date. As a result they bring another suit. Both injuries are caused by the defendant’s tortious conduct, but the really seriously didn’t manifest itself for many, many years. How do we deal with this under the SOL?

Martinez ferrer-case:

plaintiff was taking a drug that initially caused eye problems and rashes, but 16 years later the plaintiff develops cataracts, and the question was whether or not the plaintiff could now sue for the injury that occurred so much later.

In the Miller the plaintiff was in a condominium there was mold in it. By October of 1984 she moved out of the unit, her husband sent a letter to the condominium association saying that his wife has suffered injuries, and therefore there was an injury at that point and wrongdoing. Action brought, but much later than from when harm occurred.

The first thing that the majority does is to say when does a cause of action accrue for personal injury? Does it accrue when you first suffer a minor injury? The infliction of appreciable and actual harm. You must suffer actual and appreciable harm in order to commence the statute of limitations to run, nominal injury not sufficient. Applying the test to the Miller case the majority concludes there was actual harm in 1984, and thus the suit was barred by the one year statute of limitations.

**Important is concurring opinion (not majority, not rule). The opinion recognizes that there is a problem when you have these double injury situations. How would the concurring opinion deal with that situation? Second injury is a second cause of action that carries with it a second accrual point. Is that true of any subsequent injury? Qualifications is that it must be quantitatively (amount wise) and qualitatively different from the first injury. Qualitative and quantitative is a way of saying the second injury is not foreseeable. Says that this approach is consistent with the SOL and other policies.

What would the two accrual point accomplish? Promotes judicial economy, and you are going to have to present evidence about possible future harm. Plaintiff may be overcompensated if that harm develops. If you are not successful, you will be under compensated if the harm develops.

Concurring said, if the two injuries are qualitatively and quantitatively different there should be two accrual points. This is not the majority rule in CA. The majority rule still is that once you have suffered actual and appreciable injuries, you must sue for all injuries that occur.

Concurring opinion applies that rule to the facts of the case and says that it doesn’t help Mrs. Miller, because her injuries were not qualitatively and quantitatively different.

Tolling of SOL:

-Things that suspend the statute of limitations after the accrual point. Is there anything that will suspend the running of the statute of limitations, or toll it.

There are numerous statutes and equitable doctrines that California court’s have applied to this question.

Statutory Doctrines:

General statute CCP 352—

disability (example age of majority). When this statute applies, it tolls the statute of limitations (caveat the disability must exist at the time of the COA accrued). The Disability must exist at the time the COA accrued. This comes into play with certain mental disabilities and competency. Statute is generally applicable to all causes of action, unless a statute of limitations explicitly dictates otherwise. Exceptions are legal malpractice claims, medical malpractice claims.

CCP 351:

Another tolling provision—Absence of Nonresidence of Defendant

-When a defendant is outside of California, the SOL is tolled during that period. Dew v. Appleberry. Court said, if you are out of state SOL is tolled, in addition, If you are not a resident of the state, the SOL is tolled.

This code was enacted in the Pennoyer v. Neff days (can’t serve a person in another state). This statute was a reaction to the inability to sue somebody in another state. Pennoyer v. Neff is no longer the law, and under modern service law you can serve somebody who resides outside the state. The statute makes very little sense today, but it is still on the books, but it is not quite as useful as it used to be. 9^th circuit in the Abramson case, decided that the application of this tolling provision to a non-resident of CA would violate the commerce clause.

When is section 351 still applicable? The application of this tolling provision to residential defendants who leave the state for business purposes has been held to violate the commerce clause. **The only application of this statute is for perhaps when you leave the state for a non-business purpose. What if you sue somebody and they go on vacation for two weeks? Is the SOL tolled for that period? The existing case law so far would suggest that it is tolled.

Does this make sense?

What argument can you make that even when you go to another state for vacation that it implicates the commerce clause? Going to Vegas is interstate commerce, but until they do, this is a tool you can utilize when the defendant leaves the state for purely non-commercial purposes.

Special statutes may exclude 351.

Looking at a couple special statutes:

Medical Malpractice statute. See case book on page 147. Outside cap of 3 years, but the legislature did provide some tolling provisions (see the Belton case). There are three tolling provisions that apply.

Legislature did provide some tolling provisions:

CCP 340.5—Time for legal action shall not exceed 3 years unless tolled for any of the following:

-proof of fraud

-proof of intentional concealment

-presence of a foreign body

None of the other tolling provisions apply.

There was some question as to whether those tolling provisions applied to minors, but the State Supreme Court said that they do apply to it. Belton v. Bowers Case—340.5 provides the only basis to tolling in regard to the 3 year period, but does not provide the only basis for tolling in regard to the 1 year period.

Legal Malpractice-

The accrual point for legal malpractice is the wrongful act, but note the tolling provisions, at the top of page 148. 4 year maximum is tolled during the time the plaintiff has not sustained actual injury, or if the attorney continues to represent the plaintiff.

At one point do you incur actual injury so that the tolling provision is no longer applicable?

The question of actual injury has troubled the State Supreme Court, and they hit upon finally in the Jordache case, a somewhat workable definition.

When does a client suffer actual injury caused by legal malpractice? When the client suffers any loss or injury cognizable as damages in a legal malpractice action based on the asserted errors or omissions. Two classic examples, first is with regard to a case where a case goes to trial and the plaintiff loses and the plaintiff believes it was due to some wrongful acts of malpractice on the attorney, but the plaintiff takes an appeal. If the plaintiff wins the appeal, the question is when does the client suffer actual injury such that the SOL begins to run. The fact that you have to spend some money to process the appeal means that you have suffered an injury. If you have the same attorney handling the appeal for you, the action will still be tolled because you have continuous representation by the attorney.

The second classic example that has troubled the courts is in the following scenario: When is there an actual injury where an attorney has missed the statute of limitations. When has the client suffered actual injury? Is the injury when the SOL has expired?

The client is the plaintiff and the attorney failed to file the suit in the statute of limitations when has the client suffered actual injury?

You could file a complaint after the SOL has expired, BUT the defense must raise this since it is an affirmative defense. If they don’t raise the defense, then they waive it, AND there is no harm.

Let’s say that they file a demurer raising the SOL? What will you have to do? The plaintiff’s attorney will have to respond to that. At that point the client is sustaining some actual injury. They are paying for something that they ordinarily would not have to pay for if they missed the SOL, so most likely the injury in fact would take place when the client starts to have to spend money, this when he suffers injuries.

Continuous representation has also created a lot of issues.

Most recent decision is on supplement on page 26.

Field Bank case…

When an attorney leaves the firm and takes a client with them, does the tolling provision still apply to the former firm? The Supreme Court concluded that such tolling does not continue, because when the attorney leaves and takes the client with them, the representation of that client ceases.

Page 150: A couple of other tolling provisions—

Soldiers‘and Sailors’ Civil Relief Act- Federal statute which tolls while the person is in the military (applies to both federal and state limitations).

Federal Savings Statute-28 USC 1367(d)-Supplemental Jurisdiction statute. Congress tells a court what cases Federal courts can hear, even when they have no independent jurisdiction.

Part of that supplemental jurisdiction statute is a Federal Savings Provision that (reproduced on page 151) basically says that if a Federal court decides to not assert supplemental jurisdiction, and that claim is therefore dismissed—any state statute of limitations will be tolled for at least 30 days. Effect, anybody who went into Federal court mistakenly thinking they had a federal claim, and the court decides not to do it, now they have at least 30 days to file in state court.

Tolled while the action is in Federal court and then for a period of 30 days, unless state law provides for a LONGER period.

EQUITABLE TOLLING: Court Made Doctrines

What really distinguishes CA from other states is that the willingness of the CA court to adopt equitable tolling doctrines.

Several different equitable tolling doctrines, but they all hinge around one core case and have core elements to them.

Garabedian case on page 151:

Plaintiff is Garabedian and the plaintiff is a real estate agent, he is showing property to a potential buyer and he falls into an empty swimming pool. The property is owned by HUD, and there is somebody who manages the property and that is Skochko.

Federal Tort Claim Act-

June 3^rd, 1987: Plaintiff is injured.

May 6^th, 1988: Plaintiff files claim with HUD. Because this is a tort claim against the government, who is named as the defendant? The United States is the defendant.

HUD denies that claim in July of 1988, and the reason for the denial is that Skochko is an independent contractor, not an employee of HUD.

Garabedian files a lawsuit in August of 1988, and it is filed in Federal Court and it names who as the defendants? HUD and Skochko.

The claim against Skochko (state based negligence claim) is dismissed because of a then operative SC decision which said that there was no basis for supplemental jurisdiction for a new defendant Federal Tort Claim Act.

Finally Garabedian files in a CA Superior court in September of 1989. There is a one year statute of limitation in regard to a negligence claim such as the one being brought against Skochko in a Superior court.

Is the claim brought against Skochko timely, filed within SOL? Well, no the injury was in 1987, there is a one year SOL, so it is more than one year after the accrual point and it is not timely. The only way this case is timely is if a tolling provision applies. There are no statutory provisions, so he relies on Equitable tolling doctrines, or court made doctrines and there are two of them.

1. Several remedies doctrine: Applies when a person has various legal remedies available to them, and they in good faith and reasonably choose one of them the doctrine will toll the SOL during the time you chose the one avenue that didn’t pan out. The classic example is the Elkins v. Derby case on page 154.

Elkins: the plaintiff was on a job and was injured and was unsure whether he was an employee in which case he got relief from the workers compensation process, or whether he was considered not an employee whereby he could sue in court.

The plaintiff decided to file a claim through the workers comp system only to find out later on that the workers comp board decided that he was not an employee, he was an independent contractor. Then he had to file a lawsuit against the employer. The question there was more than the applicable SOL after the injury occurred, and the court said that it doesn’t matter because you acted in good faith and therefore we will equitably toll the SOL for the Workers Comp. period so your subsequent action in court is timely.

Policy behind this is multifold, but one clearly is that you don’t want to force people to choose two avenues of relief because they are unsure of jurisdiction, this would just be a waste of resources.

Garabedian argues that it applies in this case, how does the court respond to this argument? Garabedian argues that he didn’t know if Skochtko was an employee or independent contractor. One of the basis for the court rejecting the doctrine, was that based on the facts, you didn’t really know you had alternative avenues to seek relief, you always thought Skotchko was an employee, you did not make conscious choice, you went with the only avenue you had. That by itself is a basis for precluding the equitable doctrine. There is also another possible basis that the court also mentions. The first time that Skotchko was going to be sued was in August of 1988, that was more than a year after the injury occurred, all the equitable tolling provisions require that you put the defendant on notice within the SOL.

Core of all equitable tolling doctrines comes from the Addison case: (plaintiff had both state and federal claims, took case to federal court, federal court did not assert supplemental jurisdiction over state claims, it dismissed the state claims, and so Addison tried to file claims in state court, but the SOL had expired) 3 elements to the equitable tolling doctrine that must be present. Came up before the Federal Savings statute was enacted. As a matter of equitable doctrine SOL will be tolled during the time he pursued the state claim in federal court so long as 3 general conditions are met:

2^nd-General Equitable Tolling:

1. Must timely notify defendant w/in statute of limitations (must notify defendant within SOL)

2. lack of prejudice

3. reasonable and good faith conduct on part of plaintiff.

This is the core doctrine.

Garabedian argues that based on Addison tolling, defendant on notice, no prejudice, and reasonable efforts.

What does the court say about the application of general equitable tolling to the Garabedian facts? The federal lawsuit was after the statute of limitations had expired. This was the first time Skochko was put on notice in a way that equitable tolling would apply. This is not considered timely for the purposes of equitable tolling.

This case stands for the proposition that you have to have the same parties (i.e. person you sue in Federal court must be same person you are suing in state court). Just being aware of the fact that somebody filed a claim against HUD that might involve you in the long run is not sufficient notice to tell you that you should start marshalling evidence for your defense. Is Skochko’s knowledge of this tort claim sufficient to trigger tolling? No, knowledge isn’t notice. You have to have the same parties involved in whatever it is that you have chosen to do which is incorrect and your chosen lawsuit. The first claim has to be timely and just being aware that a claim has been filed against HUD is not sufficient notice to tell you that you better start marshalling evidence to prepare for a defense against this claim.

2^nd element: Lack of prejudice interpreted to be prejudice beyond the mere passage of time.

Prudential Commercial Insurance v. Superior Ct.

Illustrates how equitable tolling can be applied in different (other) settings. This has to do with an insured plaintiff who has a property insurance policy with Prudential and there is a claim resulting from an injury to the property. (Cracked foundation)

Insurance policy requires a number of provisions, one is that the insured must file that claim within 60 days after the inception of the loss. Also has a statutory provision that any lawsuit has to be commenced within 12 months after the inception of the loss. The court addresses a number of issues, all of which are influenced by the delayed discovery rule.

Has to decide what inception of loss means, and the court follows the delayed discovery rule, i.e. once you discover the injury, that is when the inception of loss occurs. There is also a substantive issue here as to which one of multiple successive insurers are going to be on the hook for this loss. Insurer who was insuring the property at the inception of loss is the insurer, when there are multiple insurers. For our purposes there is this tolling issue.

The plaintiffs discover this crack in the foundation, they file a claim within 60 days and of course what happens is that the insurance company doesn’t act on this claim until after the 1 year SOL has expired, and then the plaintiffs file in the court. The insurance company then says the action is barred by the SOL.

Court decides to apply the equitable notion of tolling to this action.

Is the lawsuit timely or is it barred by the statute of limitations? Why is this timely? The court takes Addison like equitable tolling and says that the SOL will be tolled as long as plaintiff acted on the claim with insurance company and until the insurance policy rejects the claim in writing.

How is this equitable tolling?

There is timely notice to the defendant.

The action by the plaintiff was in good faith and reasonable.

There is no real prejudice to defendants.

This application of equitable tolling is consistent with timely notification. This is a perfect situation to apply equitable tolling. There are lots of situations where there will be notice claims filed in this lawsuit.

There is something else that the court does here that is useful, it explains how equitable tolling operates here? How does it operate in respect to the 1 year of statute of limitations? Runs from injury to time of filing, then tolls until there is a written response by the insurance company. So in this case, the person had 11 months of which to bring the action because the statute of limitations has been suspended during all this time. So if you didn’t file the lawsuit until December of 1987, it would still be timely, and that is another key part of this ruling.

Implied Tolling:

Lewis v. Superior Ct.

Page 168. attorney hit by car on way to file complaint.

-Doctrine of implied tolling, impliedly tolled because your attorney is incapacitated and could not file the complaint. Problem is how do you distinguish this between other cases where the attorney has just missed the deadline out of negligence.

Doctrines the toll the SOL after the COA has accrued:

Equitable Estoppel as it applies to the SOL:

How is Equitable Estoppel different from the Equitable tolling doctrines that we have discussed?

Equitable tolling suspends the running of the SOL during the time a plaintiff has sought another forum or avenue to seek relief reasonably, with good faith, and timely notice to the defendant.

Equitable estoppel: it simply estopps a defendant from raising the SOL, so it has a different impact, in some respects more dramatic that equitable tolling:

Marioca v. Budget: case:

Plaintiff injured on by another driver, other driver was driving a rental car. Plaintiff entered into discussions with rental car company, how does equitable estoppel arise in the Marioca case?

Settlement negotiations and plaintiff believes case will be settled and so doesn’t file a lawsuit, the SOL expires and the plaintiff raises equitable estoppel.

Does this mean that anytime there is settlement negotiations, it raises grounds for equitable estoppel. What do you have to show?

-elements on bottom of page 171, does require that certain elements be satisfied, including activity or representations on the part of the defendant that are designed to induce the plaintiff not to file a lawsuit, when the defendant knows they will not pay the claim, and so forth. There has to be some misrepresentation of intent on the part of the defendant.

Does this require, according the court, that the defendant act in bad faith? Must you prove bad faith to invoke the doctrine of equitable estoppel? Very clearly the court says that you don’t have to. Actual fraud is not essential to create estoppel. You do have to have an intent to mislead, intent that plaintiff rely on the assertion.

What do the courts say about the propriety of settling the issue on demurrer? The court says that it is inappropriate. Sufficient to sustain a COA, meaning that the plaintiffs complaint alleged allegations of equitable estoppel. It would be inappropriate to resolve those factual questions on demurrer. Court says that it may not be resolved until you are at trial. Once again, this case demonstrates the need for a plaintiff’s attorney to anticipate problems with the SOL.

Burnson case: CA Supreme Court:

-the plaintiff eventually brings a defamation action, the defendant is alleged to have published this defamatory document back in 1988. In 1990, the appellant became aware that the Browning-Ferris may be been the author of this report. Told point blank that Browning-Ferris did not author this report. Not until may of 1991 that plaintiff becomes enlightened to who wrote the report, and it was Browning-Ferris. 1991, plaintiff knows defendant was the author. Less than one year later, an action was commenced.

What is the accrual point for a COA for defamation? The accrual point is when the allegedly defamatory material is published, this would be 1988. Plaintiff didn’t file until much later. Why was there a delay? Plaintiff did not know who to sue. Does this prohibit the lawsuit? Jolly COA accrues even if the plaintiff doesn’t know who to sue. If you apply that general rule, the action is time barred, but what we see is that the court grants an exception to the general rule. This is a case where the defendant intentionally conceals his/her identity, so it becomes a basis to invoke equitable estoppel, but is this enough? DOE defendant practice not available, but if it were available, then you have to use DOE defendant practice and take advantage of formal discovery and that will make it difficult to say that you couldn’t discover who the other defendant’s were through reasonable diligence.

What did the court do with this case? What is the actual impact of this case on the parties? Does not mean the plaintiff will succeed, the case is just remanded and court must look at all the elements and see if the facts are satisfied.

**KEY TO THE DOCTRINE**: There is an intentional concealment of defendant’s identity that you can’t pierce through diligent investigation, and it’s a situation where you can’t use DOE defendant practice.

Certain SOL carry with them their own tolling doctrines, and sometimes that means that more general tolling doctrines aren’t applicable and equitable tolling is not available, but courts have held that equitable estoppel will apply if it is a proper case for it. Even though equitable tolling won’t apply, equitable estoppel will. CCP 340.6 the legal malpractice statute is an example of this.

The Supreme Court decided to resolve this case based on the notion of equitable estoppel. Why not just simply have changed the accrual rule and say that the cause of action does not accrue due until you know your injury, you know the factual cause, you suspect wrongdoing and suspect who the wrongdoer is? Why not jettison that general rule? Want to encourage people to act, and also DOE defendant practice comes in here. In most cases you will be able to know at least one defendant, engage in formal discovery and then find out who the proper defendants are.

Equitable tolling in the context of a class action:

-Here this is the Jolly case again, and she is arguing now that for 6 years she was a class member of a putative class action brought by Ms. Sindell. And for 6 years that case had been pled by a class action, and she was a class member she argued and it wasn’t until her class membership was denied that her class membership began to run again. Tolled until class action is certified and then the SOL begins to run. This is from the SC decision of American Pipe v. Utah, and some federal courts have construed this broadly to mean that when class action is denied for whatever reason, the SOL has been tolled. Question is how broadly to apply this to the set of facts of Ms. Jolly.

Significant points to be made:

-CA does not have a class action rule or statue that applies to all COA, so they do borrow from FRCP 23 and its interpretations.

-Ms. Jolly cannot take advantage of the equitable tolling provision. The actual reason why the court decides that she can’t benefit from the doctrine, even assuming that the tolling doctrine applies to a mass tort class action: Fundamental reason, Sindell class did not seek personal injuries, only sought informational remedy as to danger of DES, and even though you are a member, that class allegation did not put Eli Lily on NOTICE of your personal injury claim.

-Even if the Sindell action had alleged personal injury claims, would that have helped Ms. Jolly? Because there are individual damages, etc., individual issues would dominate over common ones and class action would be inappropriate (not good for Mass tors), so you can’t claim that being a member of a mass class action tort lawsuit precludes the SOL from running. The other limitation the court talks about is that the court suggests that perhaps the CA notion would only apply in limited to situations were the class action is not certified for lack of members (not enough people).

AMENDED COMPLAINTS AND CA’s RELATION BACK DOCTRINE:

Page 623 of the casebook:

File a timely complaint, plaintiff may engage in some discovery and find out that there are additional causes of action, so they amend the complain and allege these new causes of action, but the amendment took place after the SOL had expired, the amended complaint will relate back to the filing of the original complaint for the purposes of the SOL, so long as the amended complaint and the original complaint relate to the same transaction or occurrence (this is the federal rule). CA DOES NOT FOLLOW THIS DOCTRINE, THEY HAVE ADDITIONAL LIMITATIONS.

CA Doctrine: Relation back—amended complaint will relate back to filing date of original complaint if the amended complaint (1) rests on the same set of facts, and (2) refers to the same accident, AND (3) the same injuries as the original complaint.

HYPO: So under the CA doctrine: if you have an original complaint that alleges negligence from a car crash and you seek property damage, and then your amended complaint against the same defendant is also for negligence, and also seeks property damage plus personal injury damages. If this amended complaint is filed after the SOL expires it will not relate back as to the personal injury damages because it refers to a different injury.

CA Doctrine is more restrictive than the federal rules.

Another problem with CA’s relation back doctrine, what does it mean when you say you have to allege the same general set of facts in both the original and amended complaint? Not an intuitively obvious standard.

Honig case (page 623):

-the plaintiff was employed by defendant bank, and he felt like he was being harassed, threatened and humiliated (in January 1987), and he filed a lawsuit in February of 1988. He is still an employee, so he has all the causes of action on page 623, and he seeks damages. After the complaint is filed, in April of 1988, he is fired. He wants to add a claim for wrongful discharge and defamation.

The question is, can this amended complaint relate back to the original complaint? If it doesn’t relate back, it will be barred by the then 1 year SOL. First thing the court does is allow whether any amendment should be permitted (within a month of the trial). Court permits this amendment, because the defendant is informed of all the things alleged during the complaint. The next question is, is it timely? Is it barred by the SOL, or will it relate back to the original date to which it is filed?

What does the court of appeal conclude? Is it the same general set of facts? They conclude it is, so the relation back is okay. Court: all these things were foreseeable that these things would happen, tells the rest of the story in terms of defamation. The court says that this tells the rest of the story, so it is the same general set of facts. Interprets the same set of facts standard pretty broadly.

Lee v. Bank of America: case on page 629:

-Lee was a branch manager at a bank, she is demoted in 1988, and in 1989 she files an action for wrong demotion, she is then fired (she filed lawsuit while still employed), she amends the complaint in 1991 to allege wrongful termination. She doesn’t repeat claims of wrongful demotion, she only alleges wrongful termination. Does this complaint relate back to the first complaint? No. The court does not allow it and says that it is not the same general facts, being demoted and being fired is not the same set of general facts.

Which of these two interpretations do you think is the better one, and why? The more liberal Honig, or the Lee case? The alternative could be to have 2 lawsuits, one for demotion and one for wrongful termination, this would not be economical, but what about the defendant? Which decision better furthers the policy of protecting the defendant?

Professor like Honig case. Professor says: What is key is that the defendant be notified in a timely manner, that the defendant has gathered its facts in a timely way. Defendant knew all the facts, they fired him, so it is hard for them to say that they haven’t had time to develop and discover facts. Doctrine should reflect whether defendant has taken steps to protect their interest, gather facts, etc.

Situation dealing with relation back of cross-complaints, amended cross-complaints.

SOL OF CROSS COMPLAINTS:

Syndey case on page 186:

-Relation back on amended cross complaints. December 1985 is the crash and injury. Feb 1986, the plaintiff files the complaint for personal injury and property damage against the defendant, who was the driver of the other car.

April of 1986, defendant files a cross complaint for property damage. Cross-complaint against plaintiff and brings in a new party, Al Manari produce, who is set to be the owner as well as the employer of the defendant. In April 1987, Sydney wishes to amend the cross-complaint to add in a claim of personal injuries.

Question, does this amended cross complaint for personal injuries relate back to the filing date of the original cross complaint for purposes of SOL.

If this was a complaint and not a cross complaint, the amended complaint for personal injuries would not relate back to an original complaint for property damage in CA because the injury is different. Remember CA does not take a transactional approach to it, it must be the same set of facts and injuries and property damage and personal injury are two different injuries.

Does it relate back because we are dealing with a cross-complaint and an amended cross-complaint and here the court says yes it does. Why is that? Why does an amended cross-complaint relate back whereas an amended complaint would not? The court looks at the statute governing cross-complaints, and the statute requires that you plead all cross-complaints back against the plaintiff that arise out of the same transaction or occurrence against the plaintiff, so the court uses the transactional approach for the amended cross-complaint and the relation back doctrine.

Why treat cross-complaints different than complaints? The posture of the defendant is different than the plaintiff, particularly with regard to a compulsory cross-complaint, they have no choice about being in court they must bring their compulsory-cross complaint.

Broader issue, much more important notion, to get at that—change the facts a little bit: Assume that the original cross complaint filed in December of 1986, and a 1 year statute of limitation for personal injury. Assume original cross-complaint was filed more than a year after COA accrued, would it then be barred by the SOL? What does the court say about this? It would not be barred, but why? Any cause the defendant has against the plaintiff is tolled so long as it was not barred by the SOL at the time the plaintiff’s original complaint was filed. So if the plaintiff files the complaint within 1 year, it tolls the SOL as to all causes of action the defendant would have against the plaintiff that were not barred at the time the original complaint was filed. Therefore the court’s analysis is the harder way to resolve the case. The easier way is to say look, the SOL had not run when the original complaint was filed, therefore the SOL was tolled for the remainder of the litigation.

Hypo on page 190 (4): If the SOL has already run, it is barred as a cross-complaint at least so far as the plaintiff is trying to get relief for personal injuries. Can’t benefit from the tolling doctrine. But all is not lost CCP 431.70 which authorizes a cross-demand. What that means is that you can’t get affirmative relief because the SOL has run, but if you can establish your personal injury as the fault of the plaintiff you can use that as a set-off for what the plaintiff will receive for his property damage claim. MC question.

NOTE: There is no tolling or “relation back” to save cross-complaints against 3^rd party brought into the action by the defendant. No waiver can be inferred as to a 3^rd party. See footnote 4 on page 190.

CA DOE defendant practice.

Notion of adding in new defendants after the SOL has expired, and a notion of relation back, but most of them basically incorporate the requirements of FRCP 15(c)(3). This rule provides a very narrow basis to add in new defendants after SOL has expired. CA practice is far more liberal than the federal approach.

Basics of CA’s DOE defendant practice:

-Genesis of this practice based on three different statutes, CCP 474, which authorizes use of fictitious defendants, the other is CCP 350—which says a COA is commenced when a complaint is filed, and the other is various rules that deal with time of service. Really, DOE is a court made doctrine.

There are several basic requirements of CA’s DOE defendant practice and they are reproduced in the casebook on page 652:

1. Plaintiff must file an original complaint must be timely filed (filed before SOL expires)

2. Plaintiff must be ignorant of “the name” of any name designated by fictitious names designated in the complaint.

3. Plaintiff must plead this ignorance in original complaint

4. Plaintiff must allege a COA against fictitious defendants in the original complaint and to get relation back, having alleged a COA, it must be based on the same general facts alleged later against the same defendant in the later complaint

5. Plaintiff must serve the amended complaint naming the actual defendants within 3 years of filing the original complaint, and make a timely return of service within 60 days within service of the amended complaint and summons. 3 years is the outer limit, the rules of court and local rules may shorten this dramatically. In most cases we are talking about an additional year, but in theory it could be up to 3 years before you have to amend the complaint and serve it on the actual defendant.

Difficult to meet those requirements? No. To make it even easier, most of the pleading forms that have been approved for use, contain DOE allegations. It doesn’t take much to comply and paragraph 6 of that form complaint simply says the true names and capacity of defendants sued as DOES are unknown to the plaintiff—see page 666-7.

Stryker v. Thomas Electric Co. Case on page 667:

Facts: plaintiff was in a construction site and was injured by a garage door that opened at a construction site and he fell off scaffolding. Took place July 16, 1979. Plaintiff files original complaint October 4^th, 1979, well within 1 year SOL in effect. Plaintiff names a number of defendants who are in charge of the work site and alleges negligence on their part causing his injuries, maintaining that they maintained an unsafe workplace. Plaintiff includes DOE allegations.

Case proceeds through pleading and discovery, and realizes that another proximate cause of his injuries could be from the garage door opener. Plaintiff wanted to add in Tommy’s and other defendants on a products liability theory.

This amended complaint is sought to be filed in May 1982, well after the SOL has expired. Question is whether or not this amended complaint is barred by the one year SOL.

New defendant (Thomas) makes 2 basic arguments as to why this amended complaint should be barred:

1. He didn’t substitute in for the DOES a new defendant. In the amended complaint there was not a reference added in to replace a DOE with Thomas, rather he just added Thomas, this is a procedural argument.

2. During the pleading stage there was a cross complaint that added in Thomas as a new party on an indemnity claim, so the argument is—that the plaintiff was alerted to Thomas’s electric involvement early on in the pleadings stage. The argument was that the plaintiff was not diligent in amending the complaint in a timely fashion after they knew of Thomas’s involvement.

Court addresses the concept of being ignorant of the name of the defendant. What is the relevant time at which to assess whether or not the plaintiff is ignorant of the name of the defendant? Actual knowledge at the time of original filing of the complaint. Was the plaintiff ignorant of the actual name of Thomas at the time of filing the complaint? Yes, he was truly ignorant in July 1979.

Does it matter that be became unignorant of the name afterwards? Is there any requirement that the plaintiff be diligent in finding the actual name of this party to be added in place of the DOE. Is there any obligation to find out the name of this person before the complaint is filed? No obligation that the plaintiff exercise any diligence in order to try to find out the name of this defendant (Thomas) before the original complaint is filed.

What about after the complaint if filed? Does the plaintiff have to be diligent after the complaint is filed? No general requirement that the plaintiff be diligent after the complaint is filed, there is somewhat of an obligation because there is an outer limit, you must serve the complaint within 3 years (as short as one year via local rules).

Must the plaintiff be diligent once they discover the name in amending the complaint? All court says is that it must be reasonable. Actual defendant must show specific prejudice beyond just the passage of time—it would be very hard to show this in a normal case. You shouldn’t wait too long once you do know the actual name of the defendant. How did the court rule on this point? How was the issue raised? It was raised on demurrer, and that is significant because the court has to assume the pleadings are true as plead, so the court can’t really ascertain, so the court can’t grant the demurrer. A better strategy would be to use a summary judgment motion, because at least then you could get into the facts more. The plaintiff here has satisfied the requirement of the DOE defendant practice.

What about the procedural issue? Plaintiff did not replace a DOE with Thomas? Not a problem, this is a minor mistake, and plaintiff could amend the complaint to fix this. This doesn’t change the COA and there is a strong public policy to resolve a case on its merits, so for policy reasons courts are eager to allow amendment. Not exactly what the court focuses on—what PRECISELY does the court, what makes this an insignificant problem to the court, one that can be easily corrected with no harm through a second amended complaint? The court looks at is from the standpoint of Thomas’, and from that standpoint, does it really matter to them if they are sued straight out, or whether they are sued by an allegation in the complaint that they are being substituted in for a DOE, it is of no real significance to Thomas’, it is really just a minor thing, the new defendant is not prejudiced. And this ruling has been useful in other settings.

Is there a relation back question? None of this means anything if it doesn’t relate back to the complaint. What does the court say about relation back here? It is the same general set of facts, the same accident, the same injury, so it meets the general requirements of the relation back doctrine.

Comparing to Federal Rule 15(c)(3): Reproduced at pages 635-6: Is the part of the FRCP that deals with relation back that adds new defendants. In order to have relation back in federal court, what must you be able to establish or prove? Timely notice, within 120 days of filing the complaint, the new defendant must have notice, that is one requirement; AND also the new defendant must know that the reason why they weren’t named in the original complaint was because of some mistake. So those two things must be satisfies, PLUS the relation back doctrine—arising from the same transaction or occurrence.

How is this different from the CA practice. Does the CA practice depend on whether or not the defendant had notice of the lawsuit in some kind of timely fashion? No, the only requirement is that they get notice within 3 years, doesn’t require that they knew about the action anytime before that.

Does it require that the defendant know that they plaintiff made a naming mistake, and that is why they were left out of the original complaint? No, this has nothing to do with the new defendants state of mind, that is irrelevant, the only thing that matters is the knowledge of the plaintiff vis a vis the unnamed defendant at the time the original complaint was filed.

CA has a much broader doctrine than most states have.

Do note rule 15(c)(1) on the bottom of page 635. In context that rule says that the amendment of the pleading relates back to the original pleading when relation back is permitted by the law that provides the SOL applicable to the action. Means that CA DOE defendant practice will apply in federal court in any case where CA law supplies the SOL. Most likely a diversity case, but could be a federal question case, in many cases you could utilize it in federal court.

General Motors v. Superior Court case on page 652:

Here we have a car accident on November 5^th, 1992. The plaintiff, Ms. Jeffries is injured, her seatbelt doesn’t hold her, her face hits the steering wheel and she suffers serious injuries as a result. She goes to see a doctor and apparently, she told the doctor that the seatbelt failed and that’s why she was injured. In October of 1993, she files her original complaint, so it is timely. In this original compliant she sues the original driver as well as several DOE defendants and argues that the defendant driver was negligent. Then she associates with a new attorney, and this new attorney has expertise with GM and seatbelts and based on his input, he convinces the plaintiff to amend the complaint in 1995, to add in General Motors the manufacturer of plaintiff’s seatbelt as one of the DOE defendants. The question that is raised by the defendant is whether or not the complaint is barred by the 1 year SOL or does it relate back via DOE defendant practice.

What are the arguments that GM makes?

-At the time of the action she indicated that the seatbelt failed and at the time she filed the original complaint she was not ignorant of her COA, i.e. the name of General Motors.

-Second argument deals with diligence: She told the doctor the seatbelt had failed and so she was not diligent in searching for the facts of what happened and therefore not diligent in naming GM in the original complaint.

We know from the delayed discovery rule that a plaintiff must be diligent because once the COA accrues you must be diligent once you suspect wrongdoing on the part of the defendant.

Defendant is arguing that plaintiff was suspicious of wrongdoing or they should have been, and she didn’t act diligently to bring them in within the SOL. How does the court respond to this argument? What is the relevance of the delayed discovery rule and DOE practice? Court says that delayed discovery rule doesn’t have anything to do with it. Court says that it doesn’t apply to other potential defendants who have been sued as DOEs.

Why not? Courts want to avoid forcing plaintiffs to be diligent as to all possible defendants, i.e. having to sue them within the SOL. They don’t want to force plaintiffs to do that, but why not? This is the best way to be fair to both plaintiffs and defendants. If you required the plaintiff to bring in everybody who MIGHT be liable, you would sue everybody under the sun, that is not thought to be a desirable way to proceed.

What is desirable is that you only need one defendant, but then we will let you use formal discovery to find out a lot about the case, including what other defendants appear to be the cause of injury/grievance.

Doctrinally it lets CA continue with its tradition doctrine that says a COA will accrue even though you don’t know who the wrongdoer is. The theory is you will usually know one wrongdoer, and then you can do formal discovery once you file the formal complaint to discover who the other wrongdoers are.

Page 649-distinguishes between actual facts that the plaintiff must know to be unignorant v. the suspicion of wrongdoing that triggers accrual point for the delayed discovery rule.

Was the plaintiff actually ignorant of the name of GM at the time she filed the actual lawsuit? She admitted to her doctor that the seatbelt had failed. How does the court dispose of this issue? It is not something that the average person would know about.

**Ignorance doesn’t just mean that you don’t know the name of the defendant in the general sense, it means more than that, IT MEANS that you don’t know you have a cause of action against that defendant. It is actual knowledge, not suspicion of wrongdoing.

In an unusual situation where the law has changed between filing the original complaint and the amended complaint and the change in the law allows you to have a COA against a new defendant, you can bring suit. You were ignorant that you had a COA as to the new defendant. This is permissible.

What to do about the negligent/forgetful plaintiff who at one time knew everything about the defendant before the original complaint was filed, but then they forgot about it. Courts are divided on your obligation to refresh your memory. Some courts say, no, you don’t have an obligation to refresh your memory. (hype page 653—55 discuss relevant hypothetical situations and precedents).

CALIFORNIA COMMENCEMENT:

**Generally speaking, an action is commenced for purposes of the SOL when the complaint is filed.

One caveat, choice of law borrowing statute:

Borrowing statute,

that when it applies, it will borrow a statute from another state. Not only would the SOL would be borrowed, but notions of commencement might be followed, so you may not have commencement until the complaint is served on the defendant. Heads up on the fact that not only is the SOL borrowed, but notions of commencement are also borrowed.

Prerequisites to filing a complaint:

1. Medical Malpractice

2. Claims against local state agencies or officials (CA tort claim or government claim act)

3. Broad notion of exhaustion of administrative remedies.

Medical Malpractice

CCP 364

requires that plaintiff in a medical malpractice action serve on defendants a notice, at least 90 days prior to initiation of law suit, of the intent to file the suit. The service can be through the mail, it does not have to be formally served, but it must be done at least 90 days before you commence suit. Not a jurisdictional requirement, court won’t kick case out court for failure to do this, but it will result in disciplinary action against the attorney. The court will not kick you out of court for failure to comply with 364, but there may be other penalties.

What is the purpose behind this notice? It gives the defendants notice and the hope is that they will investigate a bit and enter into some settlement negotiations and head off a lawsuit. It also carries with it a tolling provision which shows up in a lot of different cases and contexts: 364—if the notice is served w/in 90 days of the expiration of the applicable SOL, the time for commencement of the action shall be extended 90 days from the service of the notice. Woods v. Young: Has been construed to mean, that if you delay the service of the 364 notice to within 90 days of the SOL, that 90 days will be tacked on to the SOL. You only get the 90 day addition if you wait too long to send the 364 notice. If you send the 364 notice long before the SOL period expires, you get no benefit. In a sense it rewards the plaintiff’s attorney who waited a long time to send the notice.

Claim filing requirements of the CA Tort Claims Act: Applies not only to torts, but also to contract actions. Refer to this as the Government Claims Act.

This does apply to torts and does apply to express contracts where the defendant is going to be either a state agency, a state official, a local agency, or a local official. If you are going to sue a government entity, you must assume that the Tort exception applies.

**This act requires that you file an administrative claim with the appropriate entity within 6 months after the cause of action has accrued. The act doesn’t define accrual, but you must file the administrative claim within 6 months.

Why this requirement? It pretty much has the same purpose that the 364 requirement has.

The 6 month limitation though, is not as strictly applied as a true SOL might be because the statutory scheme itself sets up some flexibility. There are certain content requirements for the claim, and if you don’t satisfy all of the requirements there is this doctrine of substantial compliance, if you substantially comply we will treat it as a claim. Also, if you file the claim late, what are the possible things that might happen? Statutory authority for a petition to get permission to get a late claim. Statute set up to favor the claimant.

What else might happen? Say you file the claim late, what obligation does the entity have? If you file it late, they have to notify you that it is late. If they don’t notify you within 45 days, they have waived the objection to lack of timeliness. Same thing with content requirements. If they don’t notify you lack of compliance with content requirements, they waive their right to defenses based on lack of compliance.

Own tolling provisions, by in large they preclude the use of other statutory tolling provisions and those tolling provisions are not as generous as some of the other provisions that are out there. If you have filed a claim that is out there and is timely and has appropriate content, the next thing that will happen is that they will review the claim and consider when to deny or grant it. When it is denied, you then have 6 months of when to file a lawsuit and that 6 month period is a true, bright line SOL.

Phillips v. Desert Hospital Case:

Page 196: Plaintiff commenced an action in court. Went into the desert hospital and had surgery and there were allegations that it was not competently performed.

October., 1983: Injury.

Plaintiffs did not file their Government Claims Act, why, they didn’t know the hospital was a public entity. The plaintiff served a 364 notice on the hospital and some of the employees and this was in April of 1984.

Nothing happened as a result of the 364 notice, so plaintiff commenced their suit in July of 1984.

When this action was commenced, the defendant demurs because there is no allegation of compliance with the State Tort Claims Act (Government/State are interchangeable). Practical tip, clearly a situation where the SOL is not considered to be procedural, this is an example of a situation where it is a prerequisite to sue, so plaintiff must allege compliance with the State Tort Claims Act. Plaintiff must allege compliance with the statute. Back then you had 100 days to file these claims (now it is 6 months).

First the court tries to decide what to make of the 364 notice, is it possible that a 364 notice can be viewed as an administrative complaint under the State Tort Claims Act. The court says that a 364 notice can be an administrative claim. Does it matter if it was intended to be such a claim? What matters is whether or not the public entity is notified that the plaintiff intends to file a lawsuit. It satisfies the administrative purpose, it puts the agency on notice, so it is consistent with the overall purpose.

Did this 364 notice comply with the content requirements for an administrative claim? No, it didn’t state the amount of the damages being sought.

What category does this claim falls into? This is a defective claim, sometimes referred to as a claim as presented and it triggers off the notice requirement as regards to content and the obligation then shifts to the defendant hospital to point out what the content defects are, or this defense is waived. Did the hospital object, no, so they waived it. Why didn’t the hospital do this, they probably didn’t think a 364 notice is a claim, so they thought they did not have to respond. Court: you have waived any objection based on the content of the claim as presented.

What happens next? Timeliness. The defendant raises that as a basis for demurrer, and what does the court say about that? The court also waived the timeliness argument as well. The defendant hospital never notified the plaintiff without the requisite period of time that it was not timely.

The end result was that the demurrer was inappropriate.

A question that has troubled the courts after this case: There seems to be different categories of claims.

3 Categories of Claims:

(1) A proper claim which satisfies the requirements, then there is (2) a complaint that substantially complies with the contents. Then there is the kind of claim we see in this case, which is a (3) defective claim or a claim as presented. Well presumably there is something below that, an attempt to file a claim considered no complaint at all. It won’t even raise the level of a defective claim. Seems to be a minimum that you have to meet to be considered a defective claim.

What seems to be the essential minimum that you must present in the content of your claim? You must present a return address. The court is has been pretty lenient on how you describe the incident. The Date the place, that type of thing, what is what they are not lenient about? The key thing is that you must put them on notice that litigation is imminent, if you don’t do something about this, we are going to sue.

Fresno city college case

on page 204, because it does actually indicate that there are personal injuries, the date of the accident, it is a little vague about the nature of the injuries and how it happened, so it probably satisfies the requirement as to what the COA is about. What is lacking is a clear indication if the college does not do anything, then they will be sued.

A few more things to mention about the government claims act:

Page 205, the bottom—note about new allegations in the complaint.

Supplement page 27-28:

Stockton v. California Water case.

The supplement shows courts taking a pretty lenient view. There is kind of a lenience standard, but you still can’t totally change what you are alleging between the administrative filing and the complaint. When you craft the content of a complain claim, you need to be specific and general, you need to leave yourself wiggle room. You can’t totally change what you are alleging or claim, you can’t talk about different events or people. This is in respect to notice and new allegations in the complaint, unrelated to what was stated in the notice.

Equitable Tolling and estoppel: Long series of cases dealing with equitable tolling that says that equitable tolling will apply to cases brought under the tort claims act. The Addison case, and that is where the equitable tolling doctrine was developed in the CA courts.

Treat this the same as you would treat the filing of a complaint, treat this very seriously.

Wurts v. County of Fresno—

page 208—files a timely and competent tort claim which is reviewed by the hospital and denied. Once it is denied, you have 6 months to file a lawsuit. Plaintiff attorney realizes it’s a medical malpractice lawsuit, and realizes he has to send out a 364 notice, which he does, and since the 364 notices extends the SOL, he waits to file his official complaint. Question is was the lawsuit filed by the SOL? Hospital’s argument is that you can’t get the 90 day tolling under 364 because you filed an administrative claim that contained the exact same thing the 364 notice does. Sending another 364 notice to tack on another 90 days. The court said that here intent does matter and the plaintiff didn’t really intend for the administrative claim to serve as a 364 notice and therefore we will give the plaintiff the benefit of the 90 day SOL.

HOW TO RAISE SOL:

Final thing to say about SOL, is how to raise them.

Most SOL are viewed as things that have to be raised by the defendant or they are waived. I.e. they are treated as if they are an affirmative defense.

Page 215, there are different ways to raise it.

One is to simply allege the facts as an affirmative defense in your action.

Second way is by statute, CCP 4458—just refer to the statutes as your answer and allege that it is barred under the statutes. If you use the method under CCP 4458, make sure you don’t misidentify the appropriate statute, or more commonly there might be more statutes that apply, so don’t leave any out. Once raised the resolution of the SOL issue is a question of fact. We have seen over and over again that it is sometimes difficult to raise on demurrer, unless the complaint on its face indicates noncompliance, the more typical way is to raise via summary judgment. Plenty of cases where this is not resolved until trial. There is authority for a separate trial. You go to the trial and the first part of the trial focuses solely on SOL.

Expectations from this material:

How to deal with finding the proper statute, that statutes overlap, that you can modify SOL, accrual question, delayed discovery rule, actual and appreciable injury or harm is the kind of harm that will trigger the SOL. To be aware of the nuances that the supreme court has given to the Jolly rule. To be aware of the problems created by the double injury scenario. Tolling of the SOL, generally conversant on some of the statutory tolling provisions. To be generally conversant with the special tolling provisions. To know about equitable tolling doctrines, equitable estoppel, including DOE defendant practice. Prerequisites to commencement and general to know the fundamentals of the tort claim act procedure that we talked about. Final thing is the exhaustion of administrative remedies.

Exhaustion of Administrative Remedies: on page 216:

It also applies to some private organizations that have internal procedures. It is not just applicable to government entities.

Don’t forget that exhaustion requirement applies to private organizations that have internal procedures, it does not just apply to government agencies.

Department of Personnel Administration v. Superior Court

Salary cuts case.

Court of appeal spends the first part of it opinion dealing with its exhaustion requirement. It concludes that the PERB is a proper agency to have resolved this dispute at the administrative level. Why as a general rule do the courts require that you submit your suit first to an administrative agency?

-Agency has more expertise in the matter than the court does. This is just a legal question, agency has no expertise.

-Separation of powers is not an issue because they have indicated that they do not want to hear the case.

-Let the agency develop the factual record. The court says that there are really no facts in dispute so there will be no savings of time in the dispute.

The court goes behind the policy of exhaustion and says they don’t apply. The court just has to find some exception of the exhaustion doctrine to hang their hat on.

Exceptions (two exceptions, irreparable injury and futility):

(1) Irreparable injury—will be an irreparable injury if one is forced to go through the administrative process. There really is no issue here. There is a short time frame and things must be resolved to get the budget balanced within a year period. Need a judicial remedy before the end of the fiscal year, so state would suffer an irreparable injury if we didn’t resolve this case quickly.

(2) Futility exception which means that it is futile to exhaust the remedies because you know how they are going to resolve the case. I.e. agency has seen 100 case just like yours and they have always ruled one way and therefore it is futile to exhaust because you know they will rule against you, this is how it usually applies. The court uses this also to excuse exhaustion, is this going on here? Is it futile for them to go through the PERB, no it is not, we don’t know how they will rule on the merits. Not a good case for futility exception to apply, but what is going on, the policy so favors the plaintiff not having to exhaust its remedies that the court applies exceptions.

CALIFORNIA CONFLICT OF LAWS DOCTRINE—CHOICE OF LAWS DOCTRINE—

Tort cases, contract cases, and statute of limitations are where conflicts arise.

Whenever a dispute touched upon one state, there is a potential for choice of laws problem.

Allstate case noted on page 235 of the casebook—constitutional test, and imposes a very minimal limitation.

CA has adopted the government interest analysis for torts, in contract cases it has adopted a hybrid of the second restatement and the government interest analysis.

A handful of states have adopted the better law approach, which lets courts assess which law is better when a conflict arises.

California takes a unique approach with procedural doctrine.

The CA doctrine on conflict appears to be relatively simple: See bottom of page 235 and top of page 236.

The goal is to apply that doctrine in context and see how it plays out in cases.

The First Restatement:

This again is the traditional view, it is still in effect in 10-12 states for both tort and contracts. The centerpiece in this is the vested rights theory.

What is the vested rights theory—when a wrong occurs, or a cause of action occurs, it creates a right that travels with the person. The important thing is at what point and where does the right vest. Means that in tort cases, the COA is where the injury occurred.

The key thing to understand about the First Restatement is that it is simple, it has a few broad rules and some exceptions. It looks to a single contact to decide where the right vested. Secondly, these are jurisdiction selecting rules. You simply decide where the rights vested and apply the following law. If the right vested in South Dakota, you apply the law of South Dakota. There were some escape devices drafted into the restatements by the courts. In torts you apply the law of the place of wrong, or at the place the injury occurred. In regard to contract formation issues, you look to where the contract was made. For issues of performance, you look to the place where performance is supposed to take place.

These are very simple rules, and they are easy to apply (virtue).

Problems: it is too simple. Operates without any regard to the interest at stake in regard to contracts and tort.

The courts begin to develop some escape devices such as recharacterizing something as a contract case instead of another type of case.

What is the criticism of recharacterization? It doesn’t follow the rules that are set up, it is just an unprincipled way of having to change the rules. What the court is doing is not very transparent.

It is against that background that the restaters developed the second restatement, which is the most prevalent among the states.

The second restatement took a very different approach. The approach is first of all, extremely flexible. Secondly it does take into account all sorts of things besides where the last cause of action occurred. See page 246: Most Significant Relationship Approach—a number of different factors, policy, interest, uniformity, all these to be considered in making the choice of law analysis, without any indication as to which things are important. Very flexible, judicial free for all approach.

The second restatement does contain a number of very specific rules to govern various issues that raise a presumption as to whose law is to be applied. This presumption can be overcome by more general rules or by a different decision a court could make on the § 6 considerations, but a lot of decisions could be make just on these presumptive rules. It is not quite accurate and there are specific rules that govern.

What is the problem with that approach? What is the main criticism of the Second Restatement’s approach? It’s not very predictable. Another criticism is that it favors forum law. A state that is comfortable with its forum law will weigh the factors in favor of applying its forum law. The other criticism is that it is amorphous.

What are the benefits of the Second Restatement, particularly as compared to the First Restatement?

-It reflects a concern for basic policies behind state laws and interests that the states have.

-It allows the court to address the substantive law directly, to see how the law plays out, it is not blind to the laws that are competing.

-Another benefit of not being bound by jurisdictional selection allows the choice of law to be made on an issue by issue basis. There may be a conflict as to some issues but not others, or there may be a conflict as to multiple issues and you may solve them differently.

In terms of the second restatement in contract cases—

California’s doctrine: Although CA followed the first restatement it decided that wasn’t the proper doctrine, and the CA Supreme Court developed the government interest analysis.

Government interest doctrine is based on Brainerd Currie’s writing. There are very few choice of law statutes, and most courts rely on secondary sources to develop the doctrine.

How would Currie go about resolving a conflict of law question? What is interest analysis? Scrutinize the law, whether it be a court decision or a statute, and you try to ascertain the policy behind that law, and once you ascertain the policy, you determine based on that policy whether or not the state that created the law has an interest to applying the law at hand. The basic question about interest analysis is—how do you go about deciding what the policy is behind a state’s law on a particular issue.

In doing this it is like any other interpretation where you try to ascertain the legislative intent. Look at the legislative history, etc. What did the legislature intend to do. What policy considerations drove the court to develop this particular rule when it resolved this case. It sounds simple, but it is not quite as simple as it sounds. Who gets to decide what the policy is? The court does. Also the statute may embody different policies.

4 different areas of conflict (true, apparent, false…):

1. False Conflict-

2. Apparent Conflict-

3. True Conflict

4. Unprovided for Case

At this general kind of abstract level, what is a false conflict? When you do the interest analysis and only one state has an interest, then you apply the law of the state having an interest. These parts of Currie’s writing make the most sense.

What about the apparent conflict? Do the interest analysis, develop policies behind the laws, both states have policy interest, and you take the interest that prevails.

True Conflict:

Two more states have interest at hand, two or 3 states all of whom have an equal interest to applying the issue at hand. Currie would resolve a true conflict by simply saying that the court should apply the law of the forum. Would just default to the forum state’s law (CA does not follow this approach to resolving true conflicts).

Unprovided for case—you do the interest analysis and determine that neither of the competing states has an interest in applying their law to the issue. You have to go beyond the policies and interests. How did Currie resolve this? He didn’t, he died before he figured it out.

Hurtado v. Superior Court:

(unprovided for case)

Car crash in CA, results in death, decedent is from Mexico. Next of kin bring a wrongful death case in CA.

How California resolves a false conflict—the issue here has to do with limitation of damages.

Plaintiff v. Defendant and plaintiffs are from Mexico. The Defendants are CA residents. The death takes place in California and we are in a California court. It is a wrongful death action.

If Mexican law is applied to this case, what is the impact on the plaintiff’s recovery? It will be limited to around $2000. If California law applies, what is the California law on the measure of damages? There is no limit.

It is wise to look at the opinion very closely because a substantial part of the opinion is dicta. How does the court go about resolving this conflicts question, this choice of law question?

Whose law does it look at first in making the policy determination? Mexican law—the policy behind the damage limitation is to protect defendants form excessive damages. Which defendants are protected? Mexican defendants. Policy is to protect Mexican defendants. Do we have a Mexican defendant in this case? No. Therefore, Mexico has no interest in applying it’s limitation of damages to this case. This is basic interest analysis.

Dicta, false conflict, CA law will apply, court looks at CA’s interest anyway. Note what the court does next? Does it proceed to look at the CA interest? Basically the court says that in the absence of proof or showing that some other state has an interest in applying its law to the issue, then forum law applies. On page 258, at the end of the beginning of the partial paragraph.

Important because of how the court will resolve the unprovided for case. How would the Hurtado court deal with the unprovided for case? If neither state has an interest, then they would go with the forum law, or California law. We will see if this withstands the test of time as we go through other cases.

The Court does not want to stop there because it wants to deal with some of the arguments dealing with this.

What is the policy behind CA’s law? One of the policies is to deter wrongful conduct in California. Deter negligent driving. What other policy does unlimited damages reflect? It is designed to compensate plaintiffs fully for their loss. Does CA have an interest in compensating all plaintiffs fully for their loss? No, they only have an interest in compensating CA residents. So this is not a basis for applying the law…BUT the deterrence policy does apply because the wrongful conduct took place in CA by CA defendants. More importantly the deterrence policy is to deter actions within the state. The court ultimately concludes that this is a false conflict because of the interest in deterrence.

Reveals that laws can have more than one interest (depending on plaintiff v. defendant’s viewpoint, etc.).

The court wants to drive home another aspect of interest analysis, that is that it is done on an issue by issue basis. Here the issue is limitation on damages, but there could be another choice of law issue as to liability. What is the policy behind recognizing a wrongful death kind of action? From the plaintiff’s viewpoint—the interest is to compensate and protect “widowers and orphans.” What widows and orphans is the Mexican law designed to protect? Mexican widows and orphans and the plaintiffs are from Mexico. What about CA, does it have an interest in applying its standard of liability? What is the policy behind CA recognizing a wrongful death statute? To deter wrongful conduct in CA. It wasn’t raised here as an issue so you can assume the liability standards are the same. May have been a true conflict if laws were different.

Hypothetical:

What if the laws were different? What if the Mexican law was for intentionally torts only, and the CA law is for negligence. Now there are different laws, on the issue of liability, whose law would prevail here? Policy behind Mexican law is to protect widows and orphans, but only from intentional torts, but policy behind CA law is to deter wrongful conduct within borders of CA. May be considered a false conflict were CA law would apply, professor not sure how courts would treat this. Point, this is an issue by issue analysis, you might get one law applying to one issue and another law applying to another issue.

Reich v. Purcell

Plaintiff (Ohio) v. Defendant (CA), we’re in a CA court and the death or the injury is in Missouri.

3 possible state’s laws that are applicable here. CA, Ohio, and Missouri. This is another limitation of damages case. Missouri has a limitation of damages of 25,000 dollars. CA and Ohio have no limitation.

Whose law should be applied? What is the policy behind the Missouri damages limitation? The policy is to protect Missouri defendants from large financial judgments. Do we have a Missouri defendant here? No. Does Missouri have an interest? No. What about CA, purpose is to fully compensate CA plaintiffs. We don’t have a CA plaintiff. The other policy is to deter wrongful conduct within CA. No interest here. The injury took place in Missouri, so CA has no interest. What about Ohio? How does the interest analysis play out in regards to Ohio? Fully compensate plaintiffs, therefore Ohio does have an interest in applying its law to its case, so we have a classic false conflict. Only one state has an interest, and that state is Ohio.

Note: If the first restatement law applied, Missouri law would apply, since that is where the tort took place.

Hernandez v. Burger

Hernandez is an example of how a court can manipulate interest analysis to get to the result they want.

Plaintiff is a resident of Mexico, who gets struck by a car driven by defendants (from CA) and the defendants were CA residents and US citizens. The damages limitation is again at issue. If Mexican law applies, you have 2,000 cap on damages, if CA law applies, you have no cap on damages.

Does California have an interest in applying its unlimited damages law to the case? No, there are no California plaintiffs to compensate. Also the deterrent interest does not apply. There is no interest in the part of CA.

From Hurtado the Mexican law is designed to protect Mexican defendants, which we don’t have here. You would think that this is an unprovided for case (no interest), and so it would default to the use of California law. It wants to have Mexico be the only interested country, and they hit upon one. Mexico is an interested state and Mexican law applies. What is Mexico’s interest? The interest is that the damage caps encourage tourists to go to Baja. It does reflect an interest in reflecting conduct. This case is viewed as a manipulation of the court.

True Conflicts—

If there was a true conflict, Currie would always apply the law of the forum.

What is the problem with always applying the law of the forum in this interest? It encourages forum shopping. It also lacks primary predictability for primary analysis and outcome. Primary predictability: you can tell without knowing anything more than where the accident occurred what the law is, according to Currie CA law lacks this.

Comparative Impairment,

how do you undergo deciding what state’s law should apply in this true conflict situation? This is reasoning according to Baxter at least (although it came from a couple of scholars). Look to see what state’s interest would be most impaired. Do not weigh policies or make super value judgments.

Look to see what state’s interest will be most impaired. How do you go about determining what state’s interest will be most impaired. What according to Baxter are you not supposed to do? You are not supposed to weight the policy to see what policy is stronger or better. You are not supposed to make a super value judgment as to which law or policy is better. That is prohibited under pure comparative impairment analysis.

What do you do? When you are doing this comparative impairment you want to look at the focal purpose behind each state’s law as applied to the particular issue at hand and which states law is geared to the focal point of the issue.

If the focal point of the law is to cover a specific issue, then you apply it, if the state’s law is not geared to the problem, then you don’t use it.

How have the CA court adopted and employed this:

Bernhard v. Harrah’s Club-

Plaintiffs injured in a car crash in CA, by third party Meyers, who drove from CA to Nevada to go to a casino.

Meyers drove from CA into Nevada, went to a Casino, drank excessively and then drove back into CA and got into a crash that injured the plaintiff. The lawsuit is by the injured plaintiffs vs. the defendant casino, Harrah’s.

Allegation is that there was negligence in continuing to serve minors alcohol, an action recognized in CA at the time, Nevada law, however was different.

Nevada law said no, there is no cause of action against a tavern for serving alcohol to someone who is drunk and then causes injury to a third party. The question is, which law applies, CA or Nevada? And this requires the court to undergo an interest analysis.

Does Nevada have an interest in this case? Yes. Policy of their law is that they are trying to protect their tavern owners from liability. Nevada has an interest.

What is the policy behind the California law? To discourage drunk drivers, protect CA drivers from injury. CA has an interest here as well. Therefore, we have two interest at stake and we have a true conflict.

How does the court go about resolving the true conflict here? They say that California’s interest would be more impaired if it was not applied. This is the focal point of CA law, what happened here.

It’s not really going to significantly impair people in Nevada. Doing that the court says, it will not significantly impair the interest in Nevada, limit the application of CA law to a few tavern owners. To not apply CA law would impair it at its focal point, the focal point of the CA law is to prevent what happened here.

The Cable case: The party that was intoxicated was a Nevada resident, passenger was from CA, accident in Nevada. Passenger sued in CA, and Court of Appeal decided that Nevada law should apply. Do you agree with that analysis? Is that consistent with Bernhard? We still have an injured CA resident. Interest for CA’s law was to compensate plaintiffs and protect people in CA. Nevada’s law is to protect Nevada Tavern owners. CA’s law focal point is really focused on people from CA.

When you have a tavern owner that doesn’t appear to have advertised in CA, that makes it not quite so much at the focal point of what CA is trying to protect.

Let’s say it is in Reno, but they don’t advertise in CA? Then what? Would the result in Bernhard be the same? No advertising, no solicitation of business in California? Argument, you know that if you are on a border, that a lot of business is going to come from CA. Is being close to the border sufficient to put you at the core of CA policy? You can’t really tell from the Bernhad case, they do make that solicitation to CA. It is hard to predict how that would come out. Almost justify any answer (essay).

Offshore Rental Case on page 279:

This is the California Supreme Court’s next significant application of the comparative impairment test:

Plaintiff is Offshore rental, which is a California company, and they are suing the defendant, Continental, which is not a California company. Employee of Offshore goes to Louisiana and gets injured by the negligence of continental. The vice president who is injured is fully compensated, but Off-shore sues Continental in a CA court under what theory of liability? Negligently injuring a key employee and what is the nature of the remedy they are seeking for that transaction. Lost value to Off-shore due to employee’s injury.

If CA law applies, there is a COA, if Louisiana law applies, no cause of action.

You have to do an interest analysis: What is the policy behind the CA law? Compensating CA businesses for loss of a key employee caused by a third party. CA has an interest in applying its law here.

What is the policy behind the Louisiana law? To protect Louisiana businesses against the financial burden against this type of liability to a key employee. Does Louisiana have an interest here, yes, it does.

We have a true conflict. The court says all the right things about comparative impairment.

Policy underlying the law is archaic, isolated, attenuated, incontext etc., and if it is, it may have to yield to the more progressive laws. Which of these laws is archaic, attenuated, and anachronistic? The California law. Louisiana’s law is the progressive one which many other states have adopted. That weighs in favor of the Louisiana law. What else does the court say about the CA law? The court says that the CA law is barely ever utilized. The court looks at if there are other ways of protecting such injury, and the court focuses on insurance. Can that injury be protected against or taken care of another way, by insurance. To what extent can we not be so concerned about a state interest because the parties can protect their interest through insurance. Once they introduce insurance, that is another factor that cuts both ways. The plaintiff could insure against the injury, but the defendant could also insure against the risk. Court puts the burden of insurance on the plaintiff.

Looking at all the factors, the court concludes that Louisiana law should apply, not California law.

What do you think of this analysis. Is this consistent with Baxter’s comparative impairment? There is no question that they are making a super value judgment. They are basically saying that here is the CA law, but the Louisiana law is better. What can we make of this? It is not consistent with Baxter, it is not done in the same manner as Burnhart. It has not been overruled so when you are engaging in comparative impairment analysis you can make arguments as to whether the law is archaic, plus insurance. All these arguments (citing Offshore) are relevant.

Did not assign the entire case, but wanted to make you aware of the newest case. The Kearney case on page 33 of the supplement.

Kearney v. Salomon Smith Barney Inc.

Plaintiffs are bringing class action seeking injunctive relief and monetary damages under CA statute.

The CA statute provides for these remedies. Statute requires that when there are two or more people talking on the telephone to properly be able to record the conversation, you have to get the consent of all parties to the conversation. Problem is that in Atlanta, person was having a conversation with clients in CA and was recording the conversations without getting permission from CA clients, because the Georgia law required that you only needed consent of one party to record the conversation. When this was found out, the Class Action was filed to enjoin this and obtain monetary damages.

What is the policy behind the CA law, which requires that you get the consent of all parties before you record? This is a general right to privacy, and the policy is designed to protect California residents and their right to privacy. CA has an interest in applying its law to the case. What about the Georgia law which says you only have to get consent of one party, what is the policy behind that law? Policy is to keep a record of the conversation and to permit this so that one party consents and it is to protect Georgia residents fro liability, so the protection is to Georgia residents. Thus, we have a true conflict. The court then engages in a comparative impairment analysis. Relying on Bernhardt the court concludes that CA law applies to the injunctive relief. Why would CA’s interest be more significantly impaired than Georgia’s? Court relies on Burnhardt, saying that if we limit the application to when they call CA residents, it will affect the core of CA residents and won’t significantly affect GA residents in all cases (they can apply their law to all people who aren’t CA residents), so this serves CA better and does not significantly impair GA law. It does this interesting thing where it says that CA applies to the injunction, but we are not going to apply CA law to the damage claim, there we will apply Goergia law. Why is the court making that distinction? Until this case was decided, defendant did not know which law would apply, and so they relied on Georgia law. Not abundantly clear why the court would make this decision.

Conflict of laws can be decided on an issue by issue basis.

The Note cases are kind of self explanatory, policy, does that reflect an interest, etc. It is just more examples of that, they raise more questions than we have already seen.

CHOICE OF LAW AND CONTRACT CLAIMS:

Basic structure:

Is there a substantial relation and reasonable basis? If yes, does CA has a fundamental policy that would be violated? If no chosen law applies, if yes, doe sthe state witht the policy have a materially greater interest than chosen forum?

How to CA courts treat agreements between parties to apply certain law to issues in cases. You can waive your right to the proper choice of law, you can waive it by not raising it at the trial court level and You can waive your right in advance via a contract.

To what extent can parties waive these rights by providing for it in a contract?

CA Approach to K claims: hybrid approach using interest and second restatement. First want to check if there is a choice of law clause.

Nedlloyd case:

Joint venture between Seawinds, principle place of business in CA, incorporated in Hong Kong, the other party is Nedllyod lines whose principle place of business is in the Netherlands.

Shipping agreement, includes a choice of law clause that agreement will be construed in accordance with Hong Kong law. Submits to jurisdiction and service of process to HK courts

Seawinds v. Nedlloyd, brought in a CA court, and the forum selection clause is not exclusive.

Seawinds alleges breach of contract claims and tort claims.

Procedurally Nedlloyd raises the question of choice of law through a demurrer. Ultimately the court rules that CA law applies and the demurrer is denied and Nedlloyd takes an appeal that goes all the way to the Supreme Court.

Question, whether or not the choice of law provision is enforceable by the court?

How does the Supreme Court go about deciding if the choice of law clause is enforceable? The court turns to the restatement (2d) section 187 subdivision 2.

Under what circumstances will a choice of law provision be enforced under the second restatement?

Generally speaking a choice of law clause will be enforced, unless either

1-there is no substantial relationship between the parties choice of law and the parties to the transaction, AND (2) no reasonable basis for the parties choice. Does that mean the clause will not be enforced? No, it will be enforced unless there is (1) no substantial basis for the parties choice and there is (2) no reasonable basis for the parties choice.

Nedlloyd gives easy application for these terms mean.

Under what circumstance will a party have a substantial relationship between choice of law and the transaction or the parties? So long as one party is incorporated, that satisfies the substantial relationship. A lot of courts were requiring a lot more of a connection, and this suggests a low threshold. This was satisfied here, Seawinds was incorporated in HK< so the choice of HK law had a substantial relationship.

What about the second prong, that there be a reasonable basis?

How is it interpreted by the Supreme Court in Nedlloyd. They did this by residence, when you reside there, you have a reasonable basis to choose the law, but nobody resides in HK. Once again the court says that the mere incorporation of one of the parties in HK would provide a reasonable basis for the parties choice of law. Once again an easy threshold to satisfy. Strong presumption in favor of enforcing choice of law.

Even though you satisfy one of those two things, we know that a choice of law clause might not be enforceable.

Section (b): doesn’t refer to the fundamental policy of the forum, some fundamental policy which makes the clause unenforceable. State which has a materially greater interest…may look to the forum, but it may be some third state.

There is one small exception to this approach. When a choice of law chooses CA and the action is more than $250,000 then you don’t have to show any substantial relation or reasonable basis, CA will be applied. Comes up when CA law is chosen.

The court has to decide whether it is applicable, and there is no real significant issue with regard to the breach of contract claims. Because Seawind is incorporated in HK, it provides a reasonable basis and a substantial connection for the parties choice of contract law, pretty easily the HK law will be applied to the breach of contract.

The more difficult issue for the court is in respect to the tort claims. The clause says that this agreement shall be governed by and construed in accordance with HK law. Is the scope of this clause broad enough to cover both K claims and tort claims. The clause is poorly written. Majority concludes that it is broad enough to cover both tort and contract claims.

Two sophisticated parties, they clearly intended arbitration to be applicable. The court basically reads the clause as being broad enough to cover tort claims between two commercial parties. This generates a concurring and a dissenting opinion.

Better language would be “governing any matters arising under or growing out of this agreement.” No question then that the parties intent is to cover tort claims and all claims generally that arise out of the contractual relationship. Use the language from the Valentino case.

Interesting part to the case: when the court focuses on the scope of the clause, as to whether it applies to tort claims, it basically has to interpret that language in light of California precedent. What is the argument that CA law should not have applied? Indeed under proper circumstances, the court should use the parties chosen law as the law to construe the scope of the chosen agreement. Why didn’t the court apply HK law here to decide the scope of choice of law clause? Footnote 7: the parties did not request judicial notice or supply the court with the content of HK law.

Guardian Savings and Loan Ass’n v. MD Associates

At the time of the transaction, parties were all from Texas, it has to do with the purchase and development of a piece of property in San Francisco. Defendant defaults, Guardian starts foreclosure proceedings in CA court.

Contractual relationship to buy and sell the property and so forth. The defendant MD defaults on the loans and Guardian savings and loan starts foreclosure proceedings in CA.

In a CA court, and CA choice of law doctrine will apply.

Choice of law clause that was agreed to when this transaction was entered into, and that chooses Texas law to apply.

Under Texas law, but if CA law applies the result would be the opposite, CA would not authorize a deficiency/sufficiency judgment in that type of setting.

No problem with the parties or the choice of law, no problem with that, all parties are from Texas. Next they have to figure out whether there is some fundamental policy that would make that clause unenforceable to see whether or not California’s anti-deficiency law.

Does the CA law reflect a fundamental policy? Yes, it does. There is a fundamental policy expressed in the statute. It notes another attribute of the anti-deficiency statutes—that statute itself includes an anti-waiver provision. There is a fundamental policy of CA here that is not going to be applied if Texas law applies. Does that mean that the choice of law clause is unenforceable, no? That is not the determining factor, what is determining is the remainder of that part of the restatement—whether CA has a materially greater interest than the chosen state in the determination of the particular issue. How does the court go about resolving this question? Texas has a greater interest in applying its law here, CA does not have the greater interest in this set of facts. The end result is that the parties choice of Texas law is upheld. CA interest not that strong, but Texas interest is strong, because you are dealing with parties from Texas, etc.

Why this is interesting is because it is a lower court case where the court has had to struggle with whether or not a fundamental policy of CA that does exist arises in a context that will allow a court to not enforce a choice of law clause.

Note on page 312:

Application Group, Inc. v. Hunter Group, Inc.

Maryland law, which would enforce a non-competition clause should be applied, or whether CA law, which would not enforce a non-compete clause should apply. Interest analysis: CA law reflects a fundamental CA policy, has a materially greater interest, it’s policy trumps the choice of law clause. Engages in an interest analysis, and decides in that analysis that CA does have a materially greater interest, therefore its public policy will trump the enforcement of the choice of law clause.

America Online v. Superior Court

Where there was a choice of clause in a consumer contract that designated Virginia law as governing, and the plaintiff brings an action against the defendant of Virginia under the CA consumer remedy act. Two grounds for the court’s decision to not enforce the choice of law clause, the second ground is typical, i.e. apply the restatement, but the first ground is that the court decides that the CA consumers remedy act reflects a fundamental policy of CA because it has an anti-waiver provision. The statute itself says that you can’t waive the rights under a statute, if court enforces the waiver, this means you can contractually void the waiver, which goes against the law. This could have been used under the Guardian Savings case, but it wasn’t made as an argument. Argue that they are violating the anti-waiver provisions. Not under restatement.

Contract Provision When There is No Choice of Law cCause in the Contract:

Stonewall Surplus Lines Insurance Company v. Johnson Controls, Inc.

Jumpstarting car and battery explodes. Battery manufactured by Johnson controls in CA, the battery explodes and causes injury to Mr. Jones. Files lawsuit against Johnson Controls, and obtains a judgment for 2.5 million in compensatory ad 6.5 million in punitive damages. Johnson Controls has a huge judgment against them and they are insured by Stonewall Surplus Line Insurance company. What becomes the choice of law issue then? Whether the insurance company must pay the punitive damage judgment entered against Johnson controls. If CA law applies, no insurance coverage for punitive (want companies to pay). Johnson controls headquarters is in Wisconsin, if Wisconsin law is to be applied here, then Johnson can recover, because primary purpose of damage rule is that the policies cover against punitive damages and it favors enforcement of contractual expectations.

Conflicts situation where there is no choice of law clause.

Insurance company wants CA law to apply so they can escape punitive damages. Very typical declaratory relief action. Want them to declare that CA law applies and therefore the insurance companies have no obligation to cover the fee.

The CA court then has to resolve this choice of law question with a K claim, whether or not the K will be enforced. There is neither a choice of forum nor choice of law clause.

In the absence of choice of law provisions, what type of analysis do we engage in? CA will use both the second restatement and also interest analysis.

Case shows you how the second restatement operates.

2nd RESTATEMENT: Under §193 of the second restatement, what is the choice of law rule that comes out of this? In general with an insurance policy you will apply the law of the state where the risk is located. The problem here is that Johnson Controls is an international company, so they are insuring risk all over the states and the world. So how does the second restatement do with the multi-state, multi risk insurance policies? What the second restatement does in the comment, it says that when have an insurance contract that serves multiple risks in multiple locations, you should treat each risk as a different policy. So California law applies because that is where the insured risk was.

Government Interest Analysis: True conflict between CA and Wisconsin and engages in a comparative impairment analysis. How does the court resolve the comparative impairment analysis? This case is at the core of California’s interest. It is at the core of CA’s interest, whereas Wisconsin’s interest won’t be impaired, and Wisconsin should not expect that its law will be applied when its risk is being insured and injury is taking place in CA. That is the conclusion that the court comes to. Great case to show you the methodology that the court uses in the absence of a choice of law clause.

Why is this an interesting case: The insurance company chose to file in CA. This was not an accident. They probably realized that by filing in CA there was a good chance that CA law would apply there. Wisconsin has the so called better law approach. Which law would they apply if a Wisconsin court was applying its better law approach? It would apply Wisconsin law. Attorney saved the company 6.5 million dollars based on choice of law.

See Note (5) on page 327 for additional info—

Choice of Law Doctirne and Statute of Limitations:

California for many years followed the first restatement, that SOL was procedural and followed the SOL of the forum. CA now follows interest analysis in deciding which SOL applies if there is more than one competing state. There is also a borrowing statute.

Ashland Chemical Company v. Provence

Ashland is from Kentucky and they loaned money to defendants, who were residents of CA, and the residents did not pay the loan and the company eventually file a lawsuit in the CA courts to recover on these loans. The K also contained a choice of law clause stating that disputes would be controlled by KY law. Plaintiff files suit in CA court. Plaintiff is from Kentucky, defendant is from CA.

CA law-SOL is 4 years.

If KY applies-15 years.

How does the court go about its interest analysis? Court concludes that it is a false conflict: CA has an interest in protecting CA residents that are CA defendants. Who else is protected by the CA statute of limitations? The court is protected from stale claims. CA clearly has an interest in this case.

Policy behind KY law—no interest because they do not have any defendants in this case.

McCan Case:,

plaintiff worked on installing a boiler in Oklahoma 50 years ago. The plaintiff was exposed to asbestos, so 50 years later the injury from his asbestos exposure manifested itself an in the meantime the plaintiff had moved to CA. Plaintiff sued manufacturer of boiler, manufacture argued that Oklahoma SOL should apply. Plaintiff argued that CA statute apply, which gives you 1 year from the time you are disabled, so it would be timely filed in the CA court because the injury did not manifest itself. In doing the interest analysis, the court said that generally speaking SOL are defined to protect defendants and courts, but for these long dormant injuries, long SOL probably reflects the policy of protecting plaintiffs moreso than defendants. The argument about a long statute of limitations might reflect a pro plaintiff policy has been picked up in some cases, especially when there is such a disparity.

There is a choice of law clause, but the court decides not to apply it, why? They say that it is against public policy. What is the public policy that would be violated by it? Court says that this is a fundamental policy that invalidates the choice of law clause and they also find that there is no substantial connection or reasonable basis for the application of Kentucky law, and those bases have been severely criticized and are pretty much not followed by other courts.

What is wrong with the courts substantial relationship analysis? IS there a substantial relationship? Cases recognize incorporation as a substantial basis. KY corporation would be a substantial relationship for all purposes, what about public policy argument that choice of law violates public policy because it would ignore CA SOL? What about the SOL, and the ability of parties to contractually alter the SOL?

CA courts will engage in interest analysis in SOL cases. Why didn’t they file in Kentucky, probably because they thought they did not have personal jurisdiction.

Problem: parties can contractually extend SOL, so clearly if you can do it directly, you can do it indirectly through a choice of law clause. Interesting case, faulty analysis of courts, CA courts will engage in interest analysis with regard to SOL.

CA’s Borrowing statute:

Page 336,

CCP § 361.

If you are a non resident plaintiff when the COA accrued and you file in the CA court but the action would be barred in the state where you are a resident, CA will borrow that shorter SOL and preclude the suit. CA will also borrow commencement from another state. Might require to satisfy the SOL that you not only file the complaint, but that you serve the complaint on the defendant.

Will not apply if plaintiff has held the COA from the time it accrued. McCan case. Defendant argued that the borrowing statute should apply. Court said no, because in terms of asbestos the COA does not accrue until you are disabled and plaintiff wasn’t disabled until plaintiff moved to CA and became a resident. At the time of accrual, plaintiff was a CA resident.

Class actions and how if you have nationwide class actions the choice of law problems can make it difficult to maintain.

Federal Court will apply the choice of law doctrine in the state where the court sits.

Waiver—choice of law issues can be waived if they are not raised at the trial court level. If you don’t raise at the trial court level, it is generally considered to be waived.

THE PROPER COURT:

If your case is for less than $25,000 it will be considered a limited civil case, it has some special discovery options, and you also have limited appeal to the appellate division of the Superior court.

Personal Jurisdiction-

CA interprets Due Process a little different than federal court does. CA takes a broader view of specific jurisdiction.

Section 418.10 deals with how your raise a personal jurisdiction objection. Used to be if you argued anything else you waived your personal jurisdiction and submitted to general jurisdiction, that has changed as of 2003.

How must you raise the personal jurisdiction question now, under the current statute? When must you raise it? In the time you answer the complaint. At the same time you raise it, can you raise other defenses, including defenses as to the merits? Yes. If you raise the objection properly and the court rules against you ,how do you seek appellate review? An extraordinary writ or writ of mandamus, generally speaking within 10 days of the ruling, if you don’t do that you have waived your right to raise the issue. In CA you must raise it right away through extraordinary writ.

if you don't raise lack of jxdn when you answer, it's considered waived. a motion to quash must be raised separately from the answer.

What is the proper manner in which to raise an objection to personal jurisdiction? It is not sufficient to raise it in a timely answer in your first appearance. In your first appearance you have to raise it in a separate motion to quash. Not enough to raise it as a defense (which is the federal way to raise it). Must file motion to quash on first appearance.

VENUE:

Something that is surprisingly important in CA litigation.

A lot of the actions have to do with bringing action in the proper county? Why is this so hotly litigated? What really drives a lot of this litigation is the attorney’s, if you are a smaller firm, you don’t want to have to litigate outside of Fresno, etc.

The resolution of venue questions in California has become quite complex, in the first instance they are governed by statutes, but because there are so many statutes and overlaps, special statutes, etc., that you get a lot of overlap and to figure out what is the proper venue has required a lot of court made doctrine.

CCP 395 expresses the general venue rules. Default: Defendant is entitled to have an action tried in the county of his residence, unless there is a statutory exception.

Brown v. Superior Court

Plaintiffs (Alameda residents) bring suit against individuals that reside in Sacramento County. Incident took place in Alameda county.

The action is filed by the plaintiff in a CA court in Alameda county. What complicates this case is the nature of the causes of action and the theories of liability brought by plaintiffs.

1. Claims brought directly under the FEHA; and there are

2. Non-statutory claims for wrongful discharge

Once this action is commenced in Alameda county, the defendants moved to change venue to Sacramento county. (Motion for change of venue)

What is the defendant’s main argument? Based on the general venue statute CCP §395-- except as otherwise provided by law, the county in which the defendants or some of them reside at the commencement of the action is the proper venue for this action.

Section 395: Except as otherwise provided by law county in which defendant resides is proper…see footnote 4 on page 372.

Does 395 determine venue as to the FEHA claim? No, there is an exception where law applies otherwise, and the law that applies otherwise is the FEHA, which contains special venue provisions (example of special statute being applied) FEHA says venue is proper in a number of places, including where the unlawful action has been alleged to have been committed, which makes Alameda a proper place.

What about the wrongful discharge claims? That is initially subject to 395, and county of defendant’s residence would be proper, and under this statute, it would be Sacramento.

Have what is called here a mixed action action, for purposes of venue, two causes of action that are subject to different venue rules. If the court followed the mixed action venue rule, how would this case have been resolved? It would have been resolved in favor of 395. Mixed statute venue rule, if defendant entitled to change of venue on any ONE cause of action, then change of venue would be granted for the entire lawsuit.

Page 376-cases with mixed causes of action…

Mostly the rule has been applied in a way that favors individual defendants being sued in their own home county. The mixed action rule would say that this whole case is transferred because defendant is entitled to a transfer under certain causes of action.

Does the court uphold the change of venue? No they hold the venue to the FEHA. All these strong policies behind the special venue provisions of the FEHA, this statute and public policy will trump the mixed venue statute. FEHA venue provision will be the operative statute. With regard to any non-FEHA claim arising out of the same transaction, the FEHA will be the operative venue provision (because of strong public policy). Doesn’t mean all special venue provisions will carry this important public policy weight, but in light of the unique circumstances plaintiffs find themselves in, it makes sense. Legislature must have known there were all these non statutory causes of action raised at the same time FEHA claims were raised, and it would be silly for 395 to provide venue because it would mean that special venue provision of FEHA would never operate.

Footnote 6 on page 373: Another venue statute that deals with corporate defendants. Section 395.5—a corporation or association may be sued in the county where the liability arises. Plaintiffs argue that as to defendant’s corporation, action was proper in Alameda under 395.5 (but mixed venue exception, well recognized that…see book).

Other court made venue rules-venue statutes that deal with rights to real property are called local actions, everything else is referred to as a transitory action. Sometimes a single cause of action will seek two kinds of relief. Court will invoke the main relief rule. If the relief local, dealing with the property, or is it transitory—dealing with other rights not having to do with requisite rights in property (personal injury).

Main relief rule, is the main relief being sought local, or is it transitory?

Venue Puzzles page 381:

Turlock Theater case:

Lesor brought action against lesee for unpaid rentals in Stanislaus county. Action commenced in Stanislaus and defendants moved to transfer venue to SF, should motion be granted to transfer, and why? Is it a transitory action, apply 395.5, or is it local so that venue applies as to where property is located?

-The primary object is to receive money and it is a transitory action and venue is appropriate in SF county. Point, hard to predict how these things turn out.

Gallin v. Superior Court:

Plaintiff alleged defendants used deceptive consumer practices. Defendant moved to transfer venue to LA county on the basis that he resides there and none of the defendants reside in SD. Plaintiffs argue that venue in SD was proper under special provisions of Consumer Sales Protection Act. Should motion to transfer be granted?

What would be plaintiff’s argument? Consumer Legal Remedies Act and special venue contains a strong public policy to protect consumers. This policy trumps the mixed action venue rule and this action is appropriate, this seems like a good argument, but that public policy is not important enough to trump the local rules, and this argument did not work. Not analogous to the FEHA and therefore transfer was appropriate. Since defendant was entitled to transfer on one cause of action, he was entitled to transfer on all causes of action.

These venue questions are difficult for the court.

Even though CA generally speaking will enforce forum selection clause dealing with INTERstate forum selection clause, CA courts will generally not enforce INTRAstate forum selection clause. Generally can’t designate San Diego as venue if SD is not appropriate venue for suit to be heard. Court says that this is void and against public policy, odd, since if you don’t raise venue change at proper juncture, you lose your right, you waive it, so funny that you can’t waive this via a contract.

Preliminary notions about service statutes. Really vary as to what’s an authorized method of service based on who the defendant is (individual company public entity), and where you are serving, out of state, etc.

SERVICE OF PROCESS:

Many service options in state courts manner of service and how you do it depends on who you are suing and where that person is located.

Bein v. Brechtel-Jochim Group, Inc.

Breach of K action brought against several defendants. Brechtels as individuals, Jochims and individuals and Brechtel-Jochim group as a corporation. One of the Brechtels was the president and they operated the business out of their home.

There is an attempt to serve these various defendants, the defendants made no response. The plaintiffs try to serve the defendants several times, they mail a service of process to the address.

Court spends a lot of time on the corporation and the individual Brechtels.

There were attempts to serve, but the process server could not get passed the guard, so he ultimately serves the guard. The question is whether or not these methods of service were proper under the CA statutes.

In order to serve an individual, you cannot resort to substituted service to serve an individual. You have to first attempt to serve that defendant personally. CA requires you to attempt personal service.

Statute, you must attempt to serve using personal service with reasonable diligence, before you can result to alternate methods of service (i.e. substitute service). First question, what constitutes reasonable diligence under this context? It doesn’t require any exhaustive attempts, but the court here says that this satisfies the reasonable diligence requirement. Reasonable diligence means 2-3 reasonable attempt to serve. (It would not be reasonable if you knew they were on vacation and not home). Since the process server did try and was stopped by the gate guard, personal service was achieved.

The plaintiff was authorized to use substitute service, but did the plaintiff properly utilize substitute service? What about the individual Brechtels? Substituted service can be made by delivering a copy to the house or to a person’s usually abode in the presence of a competent member of the household. That would be substituted service, what does the court say about what the plaintiff’s actually did here?

The gate guard is a competent member of the household in this setting and it was reasonable that he would pass this on to the proper defendants. What about service on the corporation which can be done by service on the president. Was this proper service by serving the gate guard. Must be by a person who is apparently in charge of the office. Court says yes it was. Service to a corporation must be done to a suitable person in charge of the office, court says gate guard is a suitable person in charge of the office so that constituted proper substituted service upon a corporation. The house was the office.

Defendants say that the plaintiffs did not make an attempt to serve the registered agent. In CA corp must designate a registered agent and plaintiff must try to serve registered agent first. What does the court say about this?

Must you serve the registered agent first, and if you can’t do that then use an alternative method of service—the court says NO, that this is just an alternative method of service, plaintiff properly served corporation.

For individuals in CA, you must use reasonable diligence to serve them before you resort to substituted service. All the arguments on the merits weren’t properly raised at the trial court level. What should the defendants have done to both contest the priority on the merits and the service? Bring a motion to quash. Raise it in your first appearance and if you lose then you can always seek immediate appellate review through extraordinary writ. By defaulting and not doing anything, they waived their right to appeal on the merits.

Olvera v. Olvera

-Constructive service by publication.

-parents suing son for not paying on a note. The defendant gets aware of the fact that the case was actually filed. Here there is an inability to make personal service and substituted service because the plaintiffs claim they don’t know where the plaintiff resides, so they seek constructive service via publication.

Paula does not see the notice of publication and the defendants get a default judgment against her. Her motion to set aside is granted and it goes on appeal.

Court: determine whether notice by publication is proper, or if there is another basis for setting aside default.

CCP § 473.5—

authorizes a court, in its discretion, can set aside a default where service of the summons has not resulted in actual notice in time to defend (two year limit). Does 473.5 require that the service be improper? No, the service can be good. The question is did the method of service result in actual notice to the defendant? What the court has to do is construe the term “actual notice.”

Paula was aware of the lis pendens, does that disqualify her? Doe she have actual notice?

Does being aware of the pending suit disqualify her from the statute. When will a defendant have actual notice such that they are disqualified from using 473.5? The court says that you must have actual notice of the complaint and summons. Actual notice is going to be fairly narrowly construed. For publication you can actually see the publication in the newspaper, but part of the public service process requires you to mail the summons to the defendant’s last known address.

Actual notice will be fairly narrowly construed. It may require that you actually have received and seen the complaint and summons.

Trial court did not abuse its discretion. The court goes in to discuss an alternative basis to set aside the default. That is because the judgment was void because the service was defective because the statutes that authorize service by publication require that you, in your affidavit, that you show that you made reasonable diligence to locate the defendant. The starting position in CA is that if it is an individual defendant located in CA, that you first attempt personal service. Not only must you show it in the affidavit, but you must show that you can’t locate the defendant with reasonable diligence and obviously here reasonable diligence means something different than the last case. Here is has to do with constructive notice for setting up a publication, what does reasonable diligence mean in this context? What type of reasonable diligence must you undertake and then show in your affidavit? Check tax records, phone books, etc. Plaintiff did not take these steps, nor did the affidavit show these steps. Steps are listed from LA Superior court document. Ultimately, the default judgment is void.

Service by mail within California:

-CA statutes do authorize service by mail on individuals who reside within California. Note that it is somewhat limited. You can’t just send summons in the mail, you must also send a notice of acknowledgement of service and prepaid envelop. Service is only complete when the defendant has actually signed the acknowledgment and returned the form.

Service in another state:

Here a plaintiff has several options that don’t exist with regard to in state service. One of the differences is that you are authorized to serve the complaint in the mail. The service will be proper where the person to be served has signed a return receipt. There has to be a return receipt or some other evidence that the defendant has received the notice. So service is not complete once mailed, there must be a signed acknowledgment or other evidence.

In re the Marriage of Tusinger

-Wife serves the husband in Arkansas by mail. Unfortunately the person who is actually served is not the defendant, but the mother.

Was there any other evidence that demonstrated that the defendant actually received the summons and complaint? His attorney wrote a letter in reference to the complaint. This letter is other evidence that the actual defendant did receive the complaint and summons. This is an easy way to serve people who are out of state by mail.

Is service to the mother sufficient? No, not by itself. Was there any other evidence that showed the defendant actually received notice? Yes, the attorney wrote a letter which referenced the compliant. Letter from attorney is other evidence that defendant did receive. Defendant doesn’t has to be the one that received the mail, so long as there is other evidence the service was received by the defendant.

Taylor-Rush v. Multitech Corp.,

sent to wrong apartment. Street address right, but apartment number was wrong. Somebody signed the return receipt and checked the “agent” box, but it wasn’t clear who it was. Was this proper service? If the mother signs the return receipt then an unknown person who is not formally authorized is not sufficient. Was there any other evidence that the defendant did receive the complaint and summons? Plaintiff argues there was because there was a declaration submitted with regard to this case by the defendant, making a reference to matters alleged in the first amended complaint. Court says that this reference to the amended complaint is not sufficient other evidence. How is this case different from the Tusinger case?

Dill Case:

Plaintiff attempts to serve two non-resident corporations via service by mail. Here they simply sent complaint and summons to corporation itself at corporate address, did not sent to a corporate officer, there was evidence that someone signed for it, and employee but—was this other proper evidence of knowledge? Court held that service was invalid, the wrong address or wrong person seems to indicate to the court that service is invalid.

Common thread between Dill and Rush? Dill wrong person (corporation not officer, and Taylor-Rush is the wrong address) this seems to be the deciding factor.

Cruise (Cruz) case

they said that was proper evidence of service on the corporation and they distinguish the Dill case and the Taylor-Rush case. Sent to an out of state corporation, president didn’t sign and return the receipt, but was able to show that person who signed the receipt was the person in the corporation who normally received mail. Court said okay, this is proper other evidence. Distinguished from Dill and Rush via wrong person/wrong party lines.

You can also serve a non-resident by the law where the defendant resides. Can do by CA law or by state law in which defendant resides.

Corporations are required to designate an agent for service or process, if they fail to do so, then proper service can be made to the CA secretary of the state.

If the defendant resides outside the US, then service can become more complicated, however the US is a signatory to two multilateral treaties that govern service of process. Hague and InterAmerica convention. When you serve a defendant who resides in one of the other countries (in the convention), then you must follow the procedures that are set forth in the convention.

PROCEDURES FOR ASSERTING LACK OF SERVICE:

Timely motion to quash must be filed at your first appearance. Can be filed along with challenge on the merits, so long as it takes place during your first appearance.

Time limitations: Mandatory dismissal rules, you must serve within 3 years or action is dismissed. By statute there are also discretionary dismissal rules, if you don’t act diligently, then pursuant to both statute and court rule you might be subject to dismissal after two years. Generally speaking you must serve within 60 dyas after filing the complaint (Fast Track has accelerated the time in which you must serve).

Forum Non-Conveniens—

Can be utilized even though CA is the proper court based on personal jurisdiction, this motion says that this is the proper court for jurisdictional purposes, but there is a more convenient jurisdiction for which to try this case. As used in the state courts can mean that the alternative is another state or another country.

Stangvik v. Shiley Case:

Primary case in CA (heat valve case).

From the defendant’s standpoint it is the most powerful weapon, particularly when you are seeking another country for a forum. Why? Courts in CA are very good to litigate personal injury actions, liberal pleadings, expensive discovery, juries. Another country will have few of those benefits, by getting this motion granted, you can almost automatically saved your client 50%, or 90% of the damages they would be possibly submitted to in CA court.

When you move for a forum non conveniens, you can move for a stay or a dismissal. Dismissal means it is totally out of CA courts. Stay means that CA courts will retain jurisdiction solely for the purposes of monitoring jurisdiction while the case is going on.

Case: Heart valve implants that failed. Two Swedish men died. Allegation was that these implants were ineffective and that is what caused the deaths of the two men. Case filed here, personal jurisdiction is appropriate because Shiley is from CA. A stay is granted by the trial court with seven conditions that are set forth in paragraph 2 on page 414. These are all things that the defendant agreed to.

CA Doctrine very similar to Federal Rules. (1) First trial court must make sure there is a suitable forum to hear the case.

Suitable forum to hear this case—normally only requires that the other forum be able to assert personal jurisdiction over the defendants, and that the case not be barred in the other forum by statute of limitations. Those two factors never preclude a forum non conveniens motion because the defendants always agree to those things.

(2) Is an alternative forum suitable when the substantive law is much more adverse to the plaintiffs than the law of CA? Court says no, that does not make an alternative forum unsuitable. What weight does CA give to that change in law? No weight whatsoever as long as some remedy is provided by the other forum. As long as they recognize some action and some damages, even they can’t get punitive or all damages available in CA, they can still get some remedy.

(3) Next question for the court is what weight to give the residents of the parties? The court says that when the plaintiff is a resident of CA, the CA courts will give great deference to the plaintiff’s choice of forum. When the plaintiff is not a resident of CA, there really is no deference given to the plaintiffs forum. They are not choosing the forum based on convenience, they are doing it for more favorable law. Next the court looks at the defendant’s residence and that gives rise to the presumption that CA is a convenient forum. How strong is this presumption, how easy is it to rebut that presumption. Doesn’t amount to much of a presumption. Here the court looks at ease or proof, witnesses, documents, and indicates that basically it is more convenient to litigate in Scandinavian court, particularly since the plaintiff has agreed to eliminate much of the cost and evidence associated with the Scandinavian courts.

(4) Next the court looks at public interest factors—court congestion—that one always weighs in favor of granting the motion. The court is quick to say that it can’t be given determinative weight, since it means the motion will always be granted. The other factor is more interesting and that factor is the state’s interest in hearing this case because of the fact that the defendant is a resident of CA and their interest is to deter wrongful conduct and regulate CA business. How does the court apply those interests to these set of facts. CA resident plaintiffs have brought suit and so plaintiffs concern will be vindicated on the defendant by these other suits. There are 35 other suits going on right now, those cases are likely to stay in CA, and so these cases will vindicate the interest.

Court concludes that the trial court properly granted the forum non-conveniens doctrine. The residency of the plaintiff appears to make a big difference. There have been several cases where courts have forced a CA plaintiff to litigate outside the US—the great deference given to a plaintiff only applies when the motion is a motion to dismiss and not a motion to stay. If you are representing a defendant, you are well advised to emphasize the stay part, it will increase your chances dramatically of winning the motion (at least until the Supreme Court straightens this out).

FORUM SELECTION AGREEMENTS:

Generally speaking CA courts will enforce a forum selection clause. Clause will be enforceable as long as it is reasonable (no fraud or doesn’t violate public policy).

What might make a clause unreasonable under CA law? If there is not only a contract of adhesion, but if there is such disparity in bargaining power, then that would perhaps be grounds for finding the clause unreasonable and unenforceable. This is one thing the court will look at, but it usually isn’t enough, must be fraud (see Carnival Cruise lines case).

What else would make a clause unreasonable and unenforceable? If it is contrary to public policy. There have been a fair amount of these cases.

Public policy case example:

America Online case—

may get different results on the public policy depending on the laws of the other states, etc. Consumer contract that designated Virginia to settle disputes, on 2 grounds court of appeal found it to be unreasonable. 1 was that choice of law clause would result in a waiver of consumer’s rights because there is an anti-waiver provision in CA Consumer Act. (2) Also another reason because Virginia law did not allow this to be brought as a class action and this was a significant policy which would be violated if the clause was enforced. If you change the facts a little bit, you would get a different result.

What about inconvenience? What about the fact that the forum selection clause would cause inconvenience to one of the parties. What role does this play? It doesn’t play a role at all, you bargain away your convenience rights when you agree to the contract and forum exception clause with one slight exception. If the convenience is so severe that you are denied a day in court, then gross inconvenience may make the forum selection clause unreasonable. Recent case follows that holding, a CA consumer entered into an agreement with an internet provider from Georgia. Couldn’t access service, sued GA defendant in CA court. Agreement had a forum selection clause that indicated that GA was the exclusive forum. The CA appellate court said that because the amount of money was so small, it would be unreasonable to go all the way to Georgia to limit the dispute. Both cases are in the supplement on page 56.

There seems to be a requirement for a nexus between the parties and the action and the action. Must be a reasonable basis for the forum chosen.

Cal-State Business Products & Services, Inc. v. Ricoh-(applies the nexus doctrine)

Here we have a contract, a franchise agreement between Cal State and Ricoh products. Ricoh is located in New Jersey, Ricoh is supposed to supply things to Cal State and it didn’t. In the agreement there was a forum selection clause that designated New York. Question for the court is whether or not to enforce that forum selection clause. Procedural interest points: One is the motion that is used to enforce it, it is a forum non conveniens motion.

Is the clause unreasonable? What did the court say about this? Was there any negotiation over this clause by the parties or was this a form contract? No negotiation. This did not make a difference to the court. Not really any public policy.

The only concern here is whether or not there is a sufficient nexus between the parties and the transaction and the chosen state which is New York. Is the clause reasonable in the sense that there is a reasonable rational basis for the choice of the New York courts? Courts say that NY is reasonable and NY is thought to have experienced courts and laws in commercial transactions, it is also close to NJ. Court decides that choice of law clause should be enforced.

One more argument by Cal State: since this has to be raised in CA as forum non conveniens motion, all those other factors should enter into the analysis. Court says that: Other factors non relevant to the question of whether or not the forum selection clause should be enforced or not. But see professor’s comments.

Professor: Court should still look at the public interest factors, not private, but public court congestion, etc. Why should the public interest doctrine still be relevant in that context? With a selection clause the parties are waiving certain things, so the question becomes what can private parties to a contract waive? They can waive whatever affects them, but they have no power to waive the public interest factors of the sovereign states. Rare, but professor thinks a court has granted a forum non conveniens on these grounds.

Each state is free to develop its own standards.

The question is whose law should we apply, how would you go about resolving that question? Why does this come up? In most K’s there is a choice of law clause in addition to choice of forum. First look at choice of law clause, if that applies, then apply that law to the interpretation of the contract.

PRECLUSIVE EFFECTS OF PRIOR JUDGMENTS (Chapter 8)

CA doctrine of claim preclusion is unique—2^nd restatement.

Sometimes older cases will use res judicata to refer to claim preclusion and issue preclusion.

Claim Preclusion:

-Very general level CA has a similar doctrine of claim preclusion to that of the Restatement (Second) of Judgments. Bottom of page 475: a valid and final personal judgment is preclusive as to parties (except on appeal) to the following effect, if plaintiff wins the claim is extinguished, if in favor of defendant, action barred for subsequent action on that claim. This restatement is close to what the CA law is, but CA defines claim different. CA-primary rights doctrine.

CA defines a claim (cause of action) in terms of a primary right. If a defendant’s wrongful act violates one primary right possessed by the plaintiff, that gives rise to one cause of action that the plaintiff must bring in one lawsuit. If a defendant’s wrongful act violates two primary rights possessed by the plaintiff that gives rise to two cases of action. Plaintiff may join actions into one lawsuit, BUT does not have to. (this is where CA law differs). To know if prior suit is binding, must know primary rights.

If precedent doesn’t control, you must do your best to figure out how primary right doctrine applies.

Holmes v. Bricker—1969—

there was already by that time one precedent and set of rules that were settled, and these are still settled today. A tortious act of a defendant that injures the plaintiff in person and property violates two primary rights possessed by the plaintiff (one for personal injury and one for property damage), and therefore gives rise to two causes of action, so plaintiff can bring either one or two lawsuits. So if one suit settles, claim preclusion will not bar second suit (although issue preclusion may apply)

Plaintiff bought used car, express warranty that the car was fine, after the purchase and within the warranty, the Holmes get into an accident and crash the car and are injured and they bring two lawsuits.

Holmes— First they bring a lawsuit for personal injury damages, they base it on several theories of liability including breach of K, and negligence, case goes to judgment and they win.

They subsequently bring a second lawsuit, this time for property damages and allege breach of contract. The defendants raise claim preclusion as a defense to the second action. Case goes to SC to see if judgment on first action bars second action. Did the alleged wrongdoing violate one or two primary rights? Did it give rise to one or two causes of action? It gave rise to one cause of action because it wasn’t tortious. Because tort wasn’t alleged in both lawsuits, only contract alleged in both lawsuits, so there is only one primary right violated, so there is only one cause of action and you cannot split it into two lawsuits.

Why? If a tortious act gives rise to two different primary acts with respect to property, why not a breach of contract? The court is saying that if the plaintiffs had continued to pursue their tort claim, their tort claim would not be barred. Because torts can be alleged in both actions, but not the same for the K claim. What authority does the court rely upon for that distinction? It doesn’t really. There isn’t really authority for this. It does cite to the then operative code provision dealing with permissive joinder of claims (footnote #2). K claims you can combine in one action, but for tort you can’t join action for injury to person and property. It adds something to our current knowledge, now if plaintiff’s wrongful act is due to breach of K and it gives right to personal injury and property it gives rise to one primary right and you have to bring it in one lawsuit.

Tort can bring in two primary rights, one for property damage and one for personal injury.

Contract on the hand is one primary right, you cannot bring one suit for personal injuries and one suit for contract.

Slater v. Blackwood:

Car accident case.

-1^st action plaintiff is to recover her personal injuries. At the time of the first lawsuit, the guest statute said that passenger could sue a driver, but could only recover from personal injuries if they resulted from intoxication or willful conduct.

Plaintiff loses because she can’t produce evidence of intoxication, etc., so she loses. CA changes law on the guest statute allows action based on simple negligence. Plaintiff thinks she can prove simple negligence, so she refiles another action against the driver. Defendant then raises the defense of res judicata. What does the court conclude? The court concludes that there is res judicata, there is only one primary right violated and plaintiff has split that into two lawsuits so her second suit is barred. Plaintiff argues that they were arguing intoxication in first suit, but now we have a totally different theory which is simple negligence and therefore it is not the same primary right. What does the court say about that? It does not find that argument persuasive, and why not? One possible approach to deciding if you have one or two primary rights, look at the harm suffered. Here, because the harm suffered was personal injury damages in two lawsuits, the court can say that only one primary right was violated, right to be safe in your person. If the harm suffered is the same, then it is likely to be that there is only one primary right.

Attorney’s and courts will use the word cause of action to mean different count, means something very different than the res judicata use of cause of action.

Why isn’t there two primary rights, there are two very different theories of liability here. It shows the importance of a harm suffered approach, even where there are multiple theories of recovery, one injury gives rise to only one cause of action. Distinction made between legal theories and primary rights, just because you have different legal theories, doesn’t mean you have different primary rights.

Plaintiff argues public policy exceptions, how does the court respond to that one. Court responds “probably not,” but even if it were one, it wouldn’t apply here.

Sawyer v. First Financial Case:

Demonstrates some of the problems of applying the basic rules that come out of previous Supreme Court cases.

Plaintiffs are the Sawyers, they are sellers of some property in La Jolla. Sold to some developers. Price was 1.1 million, they were paid 500k in cash, and took a deed of trust for 670k secured by a promissory note. Sawyer agreed to subordinate their deed of trust to the deed obtained by the development lender, the whole deal falls apart, the property is sold for less than deed of trust, and the Sawyers end up with nothing.

Sawyer are seeking the unpaid balance of the sale price, which is $670,000 and that lawsuit focuses on the validity of the subordination cause, and the court decides that that clause was properly waived by the Sawyers.

Second lawsuit was filed against essentially the same defendants, this time alleging fraud and conspiracy to defraud. Tort theories of liability. They seek for relief payment of the same unpaid balance of the sale price. Defendants raise the defense of claim preclusion. Judgment in first actions bars litigation on second action.

Good opinion for the basic rules of res judicata—page 485.

All personal injuries that arise from one tortious act gives rise to one primary right.

What does it conclude? It concludes that the second lawsuit is not barred by res judicata, that the defendants violated two primary rights, not one and therefore gave rise to two causes of action. According to the court, there are two factual structures, contract claim and tort claim. That is important because just because a party alleges breach of contract and tortious activity arising from the same set of facts, that does not mean that there is going to be two primary rights violated. Court says because there are two factual structures plus breach of K and tort you have two primary rights not one.

What about the fact that the relief is the same? That would seem to mean that the harm suffered is the same in both lawsuits. Court says the harm is different, here you are being harmed because of breach of K, and here you are harmed from tort, so you are harmed in a different manner. Could you have predicted this outcome? Would you have predicted based on Slater and Holmes that the harm suffered? Could you just say that you have two different theories of liability? Based on what Slater says, aren’t those simply just two theories of liability for one harm suffered? This is a very plausible analysis of the Slater case. Really hard to apply in a new scenario. This difference of facts was different in Sawyer, but not in the SC, so you can rely on Sawyer if you are confronted with a similar set of facts. Whole doctrine is very unpredictable.

RES JUDICATA AND DOUBLE INJURY:

What happens if plaintiff sues for a minor injury, and then 10 years later (same wrongful act causes a much more serious injury). Plaintiff then sues for a much more serious injury? Question, is the injury barred not just by the SOL, but also by res judicata? Traditional rule would say that tortious act that causes tortious injury is a violation of one primary right even though it causes two injuries and the injuries are spread out over time, typical rule would suggest that the second action is barred by res judicata.

If you take a broad view of what is a primary right, that would accomplish the goal of judicial economy. If you take a narrower rule, it does not further judicial economy. Courts have more recently taken a broad view of what constitutes a primary right.

Takahashi case (page 500):

-Plaintiff was a school teacher and school set up process which let her be dismissed for cause, it was based on her not being competetent, and she sets up an administrative hearing before the school board and she presents arguments that she is competent, the school board decides against her and she is dismissed.

She then files an action in Superior Court (administrative mandamus action). She loses at the administrative hearing, goes to court for judicial review. Only thing court can review is the administrative decision—whether it was proper for her to have been dismissed or not. Key to Takahashi, she could not seek damages through administrative processes because administrative process did not have jurisdiction to issue damages. Superior court also had no authority to consider damages. She loses this.

In the second action she raises a number of different theories of liability not presented through the administrative process. She raises a whole variety of statutory and constitutional claims for wrongful discharge (sexual discrimination, age discrimination, etc.) It is in that law suit which she seeks damages.

In that second case that the defendants once again raise claim preclusion as a defense and the case goes up to the CA court of appeal to decide whether or not what happened in the past is claim preclusion as to the first lawsuit.

Question, was the same primary right involved in both arguments? Takahashi says no, she is raising new issues. What does the court conclude? Do these two actions involve the same primary right? Yes, it involves the same primary right—the primary right here is the contractual right of continued employment. What about the fact that she has raised all these civil rights theories? How does the court consider that to be part of the contractual right of employment? What is the court’s reasoning? How does this court distinguish the Aggarwal decision? Defamation, but how is this different from Takahashi’s claim where she seeks damages for emotional distress? You could say that the Aggarwal case dealt with not one, but two wrongful acts. But the Aggarwal decision did not make that distinction—decision said they dealt with the same set of facts in both the state and federal action. This court has a problem distinguishing Aggarwal—this decision seems out of step because it is the court that is most identified with the harm suffered approach, the best thing to say about Aggarwal was perhaps they thought it was two different harms, harm of being dismissed on inappropriate grounds and then a common law action for emotional distress, but doesn’t really distinguish why it’s two harms.

Takahashi says no matter what your theories of liabilities are and no matter what the remedy is that you are seeking, it is all part of one primary right, the contractual right to continue employment. As a result therefore, this first judgment precludes this lawsuit from going further, even thought the plaintiff could not seek damages in the first process—she also had to go through this process because she had to exhaust administrative remedies.

What is the advice the court gives? She could have raised all her theories in the administrative process and therefore even though the administrative hearing could only reinstate her or dismiss her, she could have had a defense to the dismissal, and that is how you can utilize all your civil rights theories and defenses. If she was successful, she could file a separate action for damages. What is wrong with that approach/advice in light of what the Takahashi court has ruled? What they have ruled is that all these theories are one primary right—so the advice the court gives is contrary to the primary rights doctrine and theory that the Takahashi court applies.

Contrary decision in

Craig v. County of LA:

Here the plaintiff sought employment with the Sheriff’s department and was denied a job, the plaintiff then went through the civil service commission and they recommended that they give him the job and the court enforced it and the Sheriff’s department hired Mr. Craig. He then filed a second action for damages, saying that he had been injured via intentional infliction of emotional distress, seeking tort damages. The court said that this is two primary rights, one primary right to get the job and the second to get tort damages for emotional distress. Can you distinguish this case from Takahashi? You can’t really distinguish these cases. Craig takes a narrow view and says that there are two rights, Takahashi takes a broad view and says that there is one primary right.

People v. Damon (**Professor likes**):

Case that is analogous to Takahashi in the sense that the plaintiff files a civil action against Damon to suspend his license. State has to go through an administrative process to do that. All administrative hearing can do is revoke license, can’t fine him or anything, and the tribunal suspends his license. State goes back in second civil action and seeks a fine against Damon. Damon raises the defense of res judicata (claim preclusion). What the court did was say whether this is one primary right or two isn’t really the issue, what we are really concerned with whether letting the second lawsuit through is consistent with the policies of res judicata (see page 509). Two actions were not vexations or time consuming, you couldn’t seek all these remedies in one action, so we are letting the case go forward.

Professor Point: The proper reasoning is simply to rely on restatement which says that if you are forced to go into a tribunal that can’t grant all the relief you seek due to jurisdictional limitations then that becomes an exception to claim preclusion so you can seek relief in a separate proceeding.

Pendant or Supplemental Claims:

Problem in this section has to do with notions of limited jurisdiction. In all these cases what happened here is that the defendants engage in an act which violates both state and federal law (which does not therefore mean that this violated two primary rights). There is no independent basis for federal jurisdiction over state claim, therefore if it is going to be filed in Federal court it must have supplemental jurisdiction. The question is what happens if the federal court declines jurisdiction and rejects the state claim?

Plaintiff decides to stay in Federal court and pursue that claim to resolution, so there is a final judgment.

Plaintiff then files a second action in CA state court and raises the state claims. The question is what is the res judicata effect on the Federal Action on the state claim action? What is the general

Mattson v. City of Costa Mesa rule?

Under Mattson, the state court case would be barred. What is it saying about the primary rights analysis? All one set of facts and different theories of liability, but it is all one primary right. Different theories of liability, but one primary right. First lawsuit will bar second, but how do they justify that? You need to pick a court which can hear both claims. Once you know the federal court will not hear federal and state claims, you have choices to make. If you want to stay in federal court, you must forego your state claim. If you don’t want to forego your state claim, you must dismiss action and re-file in state court.

A more recent trend has been to not follow Mattson in all situations. Only time Mattson rule applies is where plaintiff makes decision not to bring state claim in Federal court, you just filed the federal claim in Federal court, you never asked the Federal court to utilize supplemental jurisdiction—this would preclude your state claim. But these other cases say that if you bring both claims and it is the COURT that dismisses the claim, then you are free to raise that claim itself regardless of what happens in Federal court.

Another nuance, some courts say that it depends on timing of when the court decides to assert supplemental. If it happens early in the proceedings, the Mattson rule applies, but if the court waits until later in the proceedings, say at or near trial, then the case will be allowed to be heard in state court. Mattson is still general rule, but there is a lot of confusion now on how to deal with these pendent (supplemental jurisdiction scenarios).

**Until the Supreme Court resolves this, what advice should you give the plaintiff who has both state and federal theories of liability? File in state court—that is the safe bet.

Koch v. Hankins

case on page 513 which had to deal with a scenario like this:

Here the plaintiff brought an action in federal court under the SEC as well as some state court claims and the Federal court refused to assert pendant jurisdiction over the state claims. The case goes to judgment over the federal claim, and they bring the case in state court.

Question was whether or not state court action was barred by res judicata. Court says that it is not barred, but why not? How is this distinguished from Mattson? This would be a recognized exception to Mattson. This is a case where the Federal claim could not be filed in state court. No one forum that could hear both the state and federal claims because the federal claim could only be held in federal court. (Note: All disputes which are capable of being brought in courts, arising under either state or federal law may be brought in one of the state courts, except in a few narrow cases where federal law specifically limits jurisidiction exclusively to the federal courts.)

Comparison between Restatement and California doctrine:

-The difference is of course CA defines a Cause of Action or Claim via the primary rights doctrine whereas the second restatement defines a judgment as distinguishing all claims as to the defendant as part of the same transaction from which the action arose. Restatement is a transaction approach—whatever rights to relief you have, you have to raise them if they arise out of the same transaction or occurrence, whatever you leave out (as a general rule) will be barred or distinguished by claim preclusion.

Which approach better accomplishes these goals? Restatement—seems more clear, more broad, and more predictable. Why else does the restatement approach further judicial economy more than the CA approach? There is an inherent diseconomy in the CA primary rights approach because it says that 1 act by defendant may give rise to 2 causes of action, whereas the restatement says that you must assert all rights to relief that arise out of that one transaction or occurrence. Professor likes restatement approach.

There are some situations where the CA primary rights doctrine is turned into the restatement approach, and that has to do with compulsory cross-complaints. Typically a defendant’s claim against the plaintiff. CA statutes set forth the situations where a cross complaint is compulsory (you must raise it or you are barred from raising it at a later suit) and the requirement is a transactional approach: a compulsory counter-claim is one that arises out of the same transaction or occurrence as being alleged by the plaintiff.

Page 524 Hypotheticals:

Carrie’s Car collides with Van’s van, both parties suffered injuries and both vehicles are destroyed.

Lawsuit #1: plaintiff Carrie v. Van for personal injuries—negligence action.

Van files an answer, jury finds Carrie 100% negligent and she gets no damages.

Van then files a lawsuit against Carrie seeking personal injuries and property damage for damage to his Van. Moves for summary judgment via collateral estoppel. Carrie moves for summary judgment seeking dismissal for Van’s complaint. What are the appropriate rulings on these motions? Is the second action barred by res judicata? Van would be barred, his action would be dismissed because both of his claims rose out of the same transaction or occurrence that was being sued over by Carrie in the first suit, the car crash, since he did not raise these issues in the first action, he is barred by the compulsory cross-complaint statute. Car crash, both parties injured both cars damages, bring the suit. The statute turns this into the transactional test rather than the primary rights test.

Assume in the first injury, Van also filed a cross-complaint. Plaintiff Carrie v. Defendant Van, she is suing for personal injuries, he files a cross complaint back for personal injuries. Juries find that plaintiff Carrie was 30% negligent, Van was 70% negligent and they award appropriate damages. Carrie then files a second lawsuit seeking damages for destruction of her car. Van cross complains for damage to his van. What is the preclusive effect of the first judgment on the second law suit?

Is Carrie barred by res judicata from bringing the second lawsuit? No—injury in person or property, violates two primary rights, no preclusive effect. But what preclusive effect is there? Clearly we know that Van is going to be barred, because once he is sued, he has to raise all his claims that come out of the same transaction or occurrence, it doesn’t matter if they are property damage or injury. In this first action, once Van files a cross complaint the statute says that you Carrie must file your claim for any actions that arise from the same transaction or occurrence, she is now a defendant for the purpose of the cross complaint statute, so she must raise these issues or be barred IF Van files a cross complaint in the first suit.

Res judicata requires that there be a final judgment on the merits. For claim preclusion purposes, finality is defined as such: judgment is not final until all avenues of appeal or direct relief have been exhausted. Doesn’t mean something will have a res judicata effect until all aspects of the appeal have been exhausted.

Decision on the merits. What is a decision on the merits. Make sure on a summary judgment it is based on the merits of the action, not on something procedural. I.e. if court dismisses on SOL claims, that is not really a ruling on the merits, wouldn’t be res judicata on substantive merits on a SOL summary judgment.

You don’t have to have a court decision to have claim preclusion. An administrative agency decision that is final can have a claim preclusive effect so long as the agency is acting in a judicial or quasi judicial capacity. Think Takahashi. Contractual arbitration can have a res judicata effect.

Claim preclusion must be raised at the trial court level or else it is a waived. You must prove it or it is waived, it is an affirmative defense. If there has been prior litigation, look to see if you can make a claim preclusion defense.

ISSUE PRECLUSION:

Issue Preclusion: CA professes to follow the 2^nd restatement, unlike claim preclusion. You will see lots of opinions that refer to the comments and restatements.

CA Supreme court in the Lucido case distinguished between the threshold issue of collateral estoppel vs. the policy concerns about issue preclusion, so that in rare cases, even when threshold requirements have been satisfied, these policy considerations mean that collateral estoppel won’t apply.

Unlike collateral estoppel there is a public interest exception, so there is a little more flexibility with issue preclusion as compared to collateral estoppel.

What are the basic threshold requirements?

-Use restatement definition of it (page 546). Section 27 of the second restatement—“When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded in the following circumstances…

The main issues that come up have to deal with two of these requirements:

1.-whether the issue sought to be precluded is an identical issue (same issue as previously litigated)

2.-was the issue in the current lawsuit actually litigated and determined in the prior lawsuit

These two areas cause the courts the most trouble.

Basic application of collateral estoppel in its easiest terms:

Car crash and plaintiff is injured and his car is destroyed. Plaintiff driver sues the defendant driver for negligence. Court finds that indeed the defendant is negligent and the plaintiff wins money damages. Plaintiff now has the option of a second lawsuit to sue for property damage. Here there would be offensive collateral estoppel negligence can’t be relitigated in this action. Defendant is foreclosed from re-litigating issue of negligence.

Sutphin v. Speik 1940 SC decision:

Sutphin has a 5% royalty interest in regards to petroleum in land. Defendant Speik owns the entire interest and hasn’t paid Sutphin the 5%. Sutphin sues Speik for royalty interests for the period of 1927-1934. The court in the first lawsuit considers all of the arguments made and finds that indeed Sutphin is entitled to a 5% interest and a royalty payment from the wells that are produced on this land. Court awards damages to plaintiff. Time goes by and Speik still does not pay the royalties, and so Sutphin files a second lawsuit for additional royalties since 1934 and seeks to use the doctrine of res judicata to have the court rule in its favor.

Defendant Speik raises a new argument that was not raised in the first lawsuit, and that argument was that the new wells were “whipstock” wells which are drilled at an angle. Defense would be that this oil is not produced from the same zone as to where the royalty agreement applies.

Plaintiff says that you can’t raise anything; you are barred by res judicata. Court uses the term res judicata to refer to both issue preclusion and claim preclusion.

What does the court say about claim preclusion? In a very general sense there is a transactional notion that applies, court says that this is different time frame and a different transaction, so there is no claim preclusion here. What about issue preclusion? The argument by the defendant is that this whipstock defense was not raised in the first lawsuit, so it is not an issue which was actually litigated and determined. They argued that this is a new issue and therefore it cannot be barred by collateral estoppel.

Court says that this is waived. This is directly contrary to the second restatement. 2d restatement says if you don’t raise an issue it can’t be actually litigated and determined. “Could have been raised.” Is this a proper application of collateral estoppel? To say that it applies not to issues that were raised in the first lawsuit, but that it applies to issues that could have been raised. The whole premise is that it applies to issues that have been litigated and were determined.

What is the further explanation that the court gives? Makes the distinction between issues and theories. The difficulty with the defendant’s argument, the defendant has simply offered another legal theory for which the same issue may be decided. Makes the distinction between issues and theory.

Opinions have caused two different sets of problems. One is that that the main opinion-- issue preclusion applies to issues not raised, has been ceased upon and cited multiple times. This has led to conclusions that are inconsistent with the 2^nd restatement. What are some inconsistencies? For instance CA says that a default judgment is issue preclusion as to any issue that would have been litigated for plaintiff to win on default. Also, a dismissal with prejudice has an issue preclusive effect to issues you could have raised. Same with consent judgment and stipulated judgment. Again you have never litigated these.

The second difficulty becomes how do you distinguish between a theory and an issue? If the issue is a molecule, then the theory is an atom (i.e. the theories make up the issue). At what point do you declare something an issue from a theory?

Decision on the merits:

Sometimes applies to stipulated judgments.

Default judgment is on the merits and is conclusive, SEE PAGE 526.

Summary judgment is a judgment on the merits.

General Demurrer see page 527

Stiputlated judgments see page 527.

Voluntary Dismissal see page 528.

Hypothetical:

Car crash A v. B, A sues B for negligence claiming that B was reading.

#1—A sues for property damage. A v. B, B wins, court finds that he was not reading.

#2--A v. B, plaintiff files a second lawsuit for personal injuries for two counts, one is for negligence because he was disciplining his children and the second count is for intentional tort, he intentionally bumped into A’s car.

What is the issue preclusive effect of the first judgment on the second lawsuit? Count 1 is negligence because defendant B was distracted by his children, is that the same issue as in the first lawsuit? Is this a new issue or a new theory? Argument would be that these are the different theories to the same issue. Theory one is reading and theory two is distraction due to kids.

What about the intentional tort count, is that also precluded by issue preclusion?

What is the argument that it is precluded, how would you argue that it is precluded? That theory could have been brought in case 1. Would encourage you not to rely on the main body of the Sutphin case, but what about the supplemental opinion? How would you argue that this is the same issue that was resolved in the first lawsuit? How broadly can you define the issue that was litigated in the first lawsuit? Can you define the issue more broadly in the first lawsuit. If you define it more broadly as being wrongful conduct, then everything that makes up that wrongful conduct is a new theory, so it depends on how broadly you define the first issue. Does the Sutphin opinion give you any guidance on that? It doesn’t.

The Second restatement does define issue and does so in a way that would help in cases like this. Page 548 comment c. Ultimate fact made up of lesser evidentiary fact. Conclusion of ultimate fact will preclude all evidentiary facts which make up the ultimate fact. Ultimate fact is the broader fact that is made up of lesser facts. Another way of saying that you have issues v. theories.

A few cases that illustrate the problem between the issue/theory distinction.

Marriage of Mason and Henn v. Henn.

Mason-

dissolution of marriage, court in the first case divides up community property, wife runs a residential care facility, and subsequently the husband comes back with a second component saying that the good will component was not raised, and it also needs to be divided up as community property. The defense in the second lawsuit is that this claim is barred by collateral estoppel. The court of appeal there agrees and relies on the primary part of the Sutphin opinion and says that you can’t withhold this issue (you could have raised it in the first issue), but more importantly says that this was the same issue as was raised in the first lawsuit, you are just raising another theory.

Contrast that to Henn v. Henn,

where although the parties both knew about the pension the parties made no reference to the pension in the dissolution agreement. The wife comes back in a second lawsuit to open up the first judgment and says this is an omitted asset, husband says that you are barred by issue preclusion from raising this issue. Here the SC said that you can’t stretch collateral estoppel that far. The issue of the wife’s interest in the pension was not determined in the first lawsuit. The question is which one of these is better decided? Which one of these is consistent with Sutphin issue/theory distinction?

Problem, how broadly do you define the concept issue or theory? You can justify the result in both cases. These terms issue and theory don’t really have any core meaning, it just depends on how broadly the court will define them. Mason the court defined the issue broadly and in Henn the issue was defined narrowly.

Whimsat v. Beverly Hills Weight Loss Clinics International—

Matters: Two lawsuits. Franchise disagreement, franchisee sues the defendant franchisor, in federal court. Federal court is in California. Franchise agreement has a forum selection clause designating Virgina as the dissolution forum. Arguments for transfer center around forum selection clause, plaintiff says not valid due to unfair negotiation. Court rules that it is valid and grants the motion to transfer. Plaintiff files a second action in CA state court.

Should collateral estoppel apply here? Fed Court has already ruled it as a valid clause. It seems to be exactly the same issue. Plaintiff argues that the clause is not valid because it violates public policy. The question is, is it valid and enforceable? Is it the same issue? The court said that it is not the same issue. Court says it is not the same issue. The issue of whether there is over reaching in federal court was in the context of a federal motion to transfer venue, which is a different issue than a public policy objection in the state court. It is really difficult to predict what the courts will do.

Frommhagen case on page 540:

Illustrates a couple of basic points. As always there are two sets of litigation. All having to do with this attack on the assessments that are made on the county service area with regard to certain improvements the county engages in. Plaintiff service charges from 84-85 are invalid. Plaintiff loses on all his 84-85 judgments. He then files a second lawsuit next year (85-86), and again contests the validity of the charges on several different accounts, many of which are the same as those he attacked in the first lawsuit.

The initial question the court asks is, is there a claim preclusion effect? And the answer is no, really was a different years charges so different act. Second thing is to look at issue preclusion and one of the arguments is by the plaintiff is that it’s a different historical transaction, and therefore it can’t be the same issue. How does the court respond to that argument? Does it matter to the court that the same issues were raised the previous year? Same issue, just because we are dealing with a different year, it is the same issue, the more general point is that just because we are dealing with different time frames, doesn’t mean that we are dealing with different issues. It did with some of the counts, but not all of the counts.

Finally the court says that there is also a new paragraph X alleged in the new lawsuit, which was not raised in the previous lawsuit, and that is not barred by collateral estoppel, although you could argue the other way via Sutphin. Wasn’t raised and actually litigated, so there can’t be issue preclusion. Professor thinks this is the correct approach to take. That is what you can gain from the Fromhagen case.

OTHER ISSUES:

Different Historical Contexts:

If the issue truly is the same, it just happened to be raised in a different historical context, collateral estoppel will apply.

If there is a change in circumstances, then you may have a new issue. One of the more interesting cases is on page 551, Evans v. Celotex corp.

Evans v. Celotex:

Two lawsuits. First lawsuit brought by Mr. Evans, who was seeking PI damages for exposure to asbestos products made by defendant. PI action. Then plaintiff loses the case (because he cannot prove that he had personal injury from exposure to asbestos), and dies after the first suit ends. After his death, his family then brings a wrongful death action for the exposure to asbestos. The change in circumstances is that after his death, there was an autopsy, which apparently if the evidence was introduced, you can show that he died of asbestos exposure.

Plaintiffs argue that this is a new issue, there is a change in circumstances. Defendant argues issue preclusion. Court rejects that argument by the plaintiffs and say that it is all the same issue, and they have to distinguish the Melendres case. Court has to say that this case is not the Melendres case. Melendres involved a dispute over salary for police an fire department, plaintiffs were seeking comparable pay to private industries. Initially plaintiffs lose, no comparable jobs in private section. Then a formula is developed to calculate private sector earnings for firemen/police a new suit is brought, defendants argue issue preclusion. Court in Melendres says that this is a new issue because there is a change in circumstances.

Can you distinguish the Melendres case from the Evans case. Why is there a new issue in Melendres and not a new issue in the Evans case?

The court says that the evidence in the Evans case just goes to the weight of the evidence, so it is not a new issue, so why doesn’t the report in the Melendres case go to the weight of the evidence. Professor doesn’t know that you can make the distinction that the court makes, so it creates a lot of uncertainty about the changed circumstances argument in favor of having a new issue or not. If you are arguing try to make it seem more like the Melendres case for a new issue, or more the Evans case (if you want to assert a defense on issue preclusion) depending on what side you are in and what outcome you want.

California does give collateral estoppel effect to default judgments, even though nothing is actually litigated. Same thing with retraction, dismissal with prejudice, and with regard to a stipulated judgment. Professor thinks that what CA needs to do is be more faithful of the 2^nd restatement to disapprove some of the language of the Sutphin case. Should be utilized in an under inclusive manner, i.e. if you are unsure, courts should view it as not being the same issue. Goal is to provide clear notice to parties.

Certain non-judicial forums or decisions do have an issue preclusive effect. The one that is clearest is on page 572—administrative agency decisions. If an agency acts in an adjudicatory capacity, it will generally speaking have an issue preclusive effect. The SC has given more guidance (see page 60) of the supplement. The book lists a number of factors to determine administrative process is adjudicatory in nature. If it has the attributes of the trial it will be considered judicial in nature and it will have a preclusive effect. Likewise contractual arbitration decisions may have an issue preclusive effect (they certainly have a claim preclusive effect). The difficulty is though, that arbitration is not always considered to be judicial in character compared to the safeguards in trial or in an administrative hearings. Furthermore most arbitrations don’t have findings of fact or don’t record the facts. The SC has said though that the non-mutual use of collateral estoppel, that it is generally recognized in CA courts, it is not recognized with regard to arbitration decisions, at least not as a general principle. See Vandenbeg case on 573-4.

PRIVITY DOCTRINE:

Look at the privity doctrine (applies to both issue preclusion and claim preclusion), and then look at the law of the case doctrine.

Privity: Notion that certain current parties who are not parties to the prior action are bound via privity. Trying to use collateral estoppel or claim preclusion against a person who is not a party to the original suit.

Examples individual people and a homeowners association. Government entity in privity, assuming they share the same interests, could be in privity with independent government actors.

Privity is a conclusion that you come to, it is appropriate in the current litigation to bind somebody in prior litigation, even though they are not a party to the action.

CA does not like to rest on tradition, so in addition to the traditional basis, California has a whole new doctrine. Anything before 1978 is before privity analysis—must be careful, doesn’t represent modern doctrine. CA different doctrine than Federal Court—Dyson:

Dyson v. State Personnel Board

-Dyson was employed by department of Youth Authority of the Preston School and accused of stealing t-shirts and intercoms. A search is done by an officer of Preston School. The school seeks to dismiss Dyson from stealing from the school, and the school helps initiate a criminal prosecution.

The first judgment is the criminal prosecution. Dyson’s attorney raises a motion to suppress the evidence based on unlawful search and seizure. Dyson wins. The second action involves the School, it is the school v. Dyson.

Dyson raises a collateral estoppel approach, saying “you can’t introduce this.”

Question for the agency and the trial court is whether or not the school is collaterally estopped from re-litigating the search and seizure. The argument focuses on the fact that the school is not a party to the first action, so they argue that can’t be bound by the first judgment. Question, was school in privity with state of CA, if they were they are bound by collateral estoppel.

What is the modern doctrine with respect to privity? Analyze the relationship between the current party and the prior party to see if they are sufficiently close. What does this mean?

What are the policy reasons behind this privity doctrine? To keep judgments consistent. What are the doctrinal elements of this privity analysis? Due process must be satisfied. Were the interests of these agencies intertwined? Was the relationship between the school and the state sufficiently close, so as they were in privity? Court was able to conclude that the people and the school had a relationship that was sufficiently close to say that they were in privity. The school called the police, similar interests, using the same evidence, etc. Just because both are state parties, doesn’t mean that they are in privity. See if two entities have sufficiently related interests so that it does not violate due process. Hard to predict when a court will conclude when there is a privity relationship or not. This is the criticism of this doctrine.

Court does talk about Due Process restrictions on doctrine of privity. Is there a sufficiently close relationship to satisfy Due Process? According to Dyson Due Process requires that the party to be estopped must have had an identity or community of interest with, and adequate representation by, the losing party in the first action as well as that the circumstances must have been such that the party to be estopped should reasonably have expected to be bound by the prior adjudication.

The school is collaterally estopped from relitigating the issue of the validity of the search.

Rogers case—

supplement page 61: Plaintiff in that case was suing the defendant, Sgt. Controls on an asbestos exposure claim, saying that they were exposed to asbestos, and Sgt. was liable because it was a successor in liability. Sgt. Claimed that they were estopped because these issues were already litigated and had lost. Two prior cases same claims had been raised by other defendants. Commonality was the same attorney. Court found privity and therefore Rogers was barred from relitigating. The Court of appeal reversed said there wasn’t a privity relationship and it would violate Due Process—no privity relationship. Alhtough plaintiff had a theoretical interest, he had no propriety interest, had not control over the law suit.

This case reveals that in a jurisdiction that followed the traditional notions of privity that Rogers would be in privity, but because of CA’s sufficiently close doctrine, this becomes a case where the trial court and court of appeals disagree, so there are transactional costs to having to litigate this issue.

LAW OF THE CASE DOCTRINE:

The final effect deals with the law of the case doctrine—

Clemente case

is the classic case for setting forth the doctrine of law in the case. In this case, the plaintiff was injured when crossing the street and was hit by a motorcycle and was severely injured and after the accident occurred the person on the motorcycle was there. Patrolman neglected to get any information about the motorcycle driver who admitted he hit Clemente.

Clemente suffers serious injuries and brings an action against the state of CA for negligently not getting information from the motorcycle and van drivers. Trial court enters a demurer to the complaint and Clemente takes an appeal. On appeal, the court says that the pleading does support a COA against highway patrol, they reverse the demurrer and the case goes back to trial. Plaintiff wins, but after trial, something occurred that made the defendant appeal his case. What happened? There was a change in the case law, the Williams case. What additional element does the Williams case seem to require? It seems to say that there must be an affirmative inducement of reliance. Argued that the trial court applied the wrong legal standard and therefore the verdict has to be reversed. The plaintiff argues the law of the case doctrine applies.

What is the law of the case doctrine? Ruling of law on the appellate court is binding on all subsequent litigation conduct on the same case, with a major exception of course. Exception is if the application would result in an unjust decision.

What is the prime example of when you would have an unjust decision and an exception to the law of the case doctrine? When there is an intervening or contemporaneous change in the law. This will happen either because the legislature or the SC has changed the applicable law.

This would seem like a classic example of an intervening change of law. What does the majority conclude when applying this doctrine to this case? Does it apply here or does the exception apply? The law of the case doctrine applies, the intervening change of law exception does not apply because there will be unjust result here.

How does the majority say that there is no unjust decision in this scenario? One reason is because if the plaintiff’s had known what the change in law meant, they would have introduced different proof. What is the second reason? The Clemente case went to trial before the Williams case was determined. Why is this significant? They were operating under the current understanding of what the law was, and what else? If you apply the exception it would result in the full retrial of the case. If it had occurred before Clemente went to trial, they would have applied the exception, but after the trial it is really a waste of judicial resources. Doctrine really requires that there be an appellate decision.

Judicial Estoppel Doctrine:

Doctrine that had been dormant for a number of years, but recently there has been a number of cases that have utilized the judicial estoppel doctrine. Basically it is a notion based on judicial economy. If a party takes one position in one proceeding and convinces the court to go along with that position, then in a second proceeding takes the opposite position, that party may be precluded by judicial estoppel.

PLEADINGS:

California is a code pleading state. When you plead a cause of action, you have to use more specific facts when you state your cause of action. Facts sufficient to put defendant on notice. What the court is trying to get away with is the old fact pleading requirements. CA requires facts sufficient to put defendant on notice for what claim is.

When you plead an action for personal injuries or wrongful death, you are prohibited from putting in an amount for damage being sought. What you are supposed to do, is instead, serve a separate document on the defendant called a statement of damages where you specify the nature and amount of the damages you are seeking.

Debbie S. v. Ray

-Defendant did not show up to the trial.

-trial judge enters a default, 1 million in compensatory damages.

-Ruling challenged on appeal because the plaintiff never served a statement of damages. What was the argument made by the plaintiff of why the million dollar default judgment was nonetheless proper? Plaintiff says that throughout this case we have always told the defendant that we are talking about a million dollars of damages. The court rejects the plaintiff’s argument, because the plaintiff didn’t follow the statute. It is a good basic case to illustrate that nonetheless you should serve the statement of damages, if not when you serve the complaint, as soon as you can make an intelligent estimate of what the damages are.

College Hospital v. Superior Court Case:

When a plaintiff is suing a health care provider for personal injuries or wrongful death and it is seeking punitive damages, that triggers off a special statute, section CCP section 425.13. When you sue a health care provider you can’t even have allegations in the complaint that would support a finding of punitive damages, unless you demonstrate that you have a substantial probability that you will prevail on the punitive damages claim. What role does the court play in that motion, does the court have the ability to weigh the evidence in deciding whether or not to allow the complaint. The SC said no, the trial court does not have the authority to weight the evidence and make credibility determinations at the early stage of the litigation. The statute requires that the plaintiff support their allegations by facts under oath. By a declarations or affidavits.

The Demurrer:

-considered to be a pleading and it is used when there is a defect evidenced on the face of your pleading, or something that the court can take judicial notice of. The grounds for demurrers are set fourth in statute CCP § 430.10 see page 669 for grounds. If you are looking to file a demurrer based on things not included in the pleading, then you are probably in want to file a summary judgment. Demurrers are limited to challenges that appear on the face of the pleading.

General Demurrers: A demurrer does not test the truth of the allegation; it only tests the legal sufficiency of the pleading. Must assume the truth of all proper allegations of the complaint…

Dryden case

on page 672—basic example of how those standards apply.

The Dryden’s entered into a contract with the Irving’s that own this olive oil company and the Drydens had a contract to take the waste products of the production. There is a dispute that arises between the Irving’s and the Drydens and the Irving’s sell the company to Tri Valley Growers and Tri Valley will no longer honor the contract. Dryden sues the new owners on a number of different counts for interference with contractual relations. The defendant demurs to all the counts of the complaint. Demurrer is sustained by trial court without leave to amend. Court of appeal breaks it down into categories of counts.

One of the requirements that the defendant had knowledge of the contract and intended to induce its breach, and what did the plaintiffs plead that did not satisfy that element of the transaction? Plaintiffs plead that the new owners, the defendants did not learn about this contract until after they purchased the olive oil company. If they didn’t know about the contract until afterwards, then they could not have intended to induce its breach.

Court takes judicial notice of two letters attached to the pleadings by the Drydens by the former owner and those two letters indicated that the Irvings had elected to rescind the contract with Dryden before the new owners. The court said that you can’t possibly establish that the breach of the contract was caused by Tri Valley, it was caused by the prior action of the Irvings. Shows you how the court can utilize judicial notice, to go beyond the pleadings.

General Demurrer—Dryden case-a demurrer is addressed to the pleadings with one exception, the court must not look outside the pleadings. Assuming they are true, does this state a cause of action. The court can in addition take judicial notice of certain facts.

The general rule is that in order to take judicial notice of court documents, can take judicial notice of the existence of the documents, but not the truth of the facts that were stated therein.

Factual findings may be the proper use of judicial notice if they are going to collateral estoppel, so you are not using the facts to assert the truth of the matter, just raising it for collateral estoppel purposes. This is a proper use.

Turn out attention to the issue or the topic of amendments after demurrers that were sustained. Amendments after sustained demurrers.

Most situations, it is considered to be an abuse of discretion to grant a demurrer without leave to amend if there is a reasonable possibility that the plaintiff can amend its complaint.

Right to amend after demurrer is sustained:

Careau case

on page 678: Plaintiff who wanted to buy Egg City. The plaintiff sues the financial institution that was going to lend them some money and they raise two different causes of action, one for breach of contract, and the other is in tort for bad faith. Trial court sustains demurrers to all causes of action. Burden is on plaintiff to show abuse of discretion. Plaintiff must show to the court that if given the leave to amend that they can correct the defects in the prior pleading.

Was it proper to have granted the demurrer to the breach of contract action without leave to amend? What was lacking in the first complaint that could easily be corrected? Focuses on whether or not there was a condition precedent that was satisfied or not in order to make the contract and the plaintiff said they could correct this. Demonstrated how they could correct it.

What is more interesting is how the court deals with the tort claim, which was sustained without leave to amend, and in order for the plaintiff to allege a cause of action for tortious breach of fair dealing, etc., the plaintiff had to show a special relationship. The plaintiff has to convince the court that there is a cause of action when you’re not in the insurance arena, because that is where the cause of action developed. The plaintiff has to be able to plead a special relationship in order to establish some kind of special relationship in this context.

Did it say that it was an abuse of discretion for the trial court not to amend? No error because it was not patently clear that you could amend the complaint to find the five factors, this is what troubles the professor, where is the court getting the knowledge to support this ruling? Did the court look beyond the pleadings?

Anti-slap statutes have been cut back by the slap back statutes.

Cross-Complaints—

California uses the term cross complaint to cover a lot of different pleading devices. When we use it in CA, we think of it as a counter-claim in federal court. It also serves the purpose of filing a claim against one party by a co-party, which would be a cross-complaint in federal rules, and it also serves as an impleader in federal court.—if you want to bring in another party to pass off liability.

Let’s focus attention on the most common use, when it functions as a counter-claim, when the party who is being sued asserts a claim back against the party bringing the suit.

What standard should be utilized to determine when a cross complaint is filed? The cross-complaint statute takes a transactional approach, when a claim is asserted against you, you must assert a claim against your opponent if it arises from the same transaction or occurrence.

Bowen v. Currie Medial.

Bowen brought a federal claim under the Lanham act for unfair competition. Currie answers, they deny liability, but file no counter-claim.

Then there is current action in state court brought by Currie.

Question is whether or not Currie’s claims are barred because they weren’t raised as a counterclaim in the prior federal action. Currie has a number of arguments why they are not barred. One argument is that they don’t arise from the same transaction or occurrence. The second argument is that, we have state based claims, there is no diversity of citizenship so there is no jurisdiction in Federal court. The argument didn’t work because the claims would be covered by ancillary jurisdiction, if it arose from the common set of facts, federal court could exercise ancilliary jurisdiction.

Currie still has the argument that his claims are state claims which did not arise from the same transaction or occurrence. Here the court has to define how broadly or not the same transaction or occurrence text in the context of this state statute. Tricky issue because there was a line of thought that you should apply the same transaction or occurrence test broadly when you want to raise the claim and to be inclusive to bring counter or cross claims in, BUT you should apply it narrowly when precluding a party from bringing a claim. What does the court say about the argument if it is used as a bar (interpreted narrowly)—the court said that it doesn’t matter. What is the proper standard? Here, the court says that there only has to be a logical relationship between the Bowen claim in federal court and the Currie claim in state court. Does not have to be identical facts, but what must there be? How do they define logical relationship test? Any significant issues that are relevant or common to both claims—this satisfies the logical relationship test. Court claims dealing with the same events, lots of common factual and legal issues, the important part is that it demonstrates the CA position, a BROAD interpretation of the compulsory cross-claim statute. When you are advising the client who is a defendant, if there is a claim that can meet this broad logical relationship claim, you need to assert it.

Crocker v. Emerald

Adds a little bit to the definition of what a compulsory v. permissive cross complaint, and it adds to the notion that if you forget to ask for a cross complaint in a timely fashion, you can ask the court for permission to file it late. When is the proper time to file a cross-complaint against your opponent? Generally speaking you are supposed to file the cross complaint when you answer the complaint. If you don’t do this, you run this risk that you waive the complaint.

Crocker is suing Emerald to collect on a note that wasn’t being paid. Emerald has a lot of collateral that was put up on the note. Since Emerald defaulted, periodically Crocker will force a sale of this collateral to help pay down the note. Emerald attempts to file a number of cross complaints and they are all denied.

What is the nature of his cross complaint, what does he want to assert back against the bank? The UCC claim that the collateral wasn’t sold for a commercial reasonable value.

Crocker opposes the cross-complaint, Emerald says that this is a compulsory cross complaint, which I omitted from filing before, pursuant to CCP 426.50, I am entitled to have this cross complaint filed. 426.50 says that if a party fails to plead a cause of action in a cross complaint, the court shall grant permission or leave of court for the defendant to file the compulsory cross complaint. How does the appellate court respond to that argument? The court holds that it is not a compulsory cross-complaint, and it is not so much a problem of not meeting the logical relationship test, but it does implicate another element of making the cross-complaint compulsory. Must have existed at the time of service of the answer. Because the cross complaint dealt with sales that took place after the answer was served, it simply wasn’t a compulsory cross complaint. It just didn’t exist at the time the complaint was filed, it is not compulsory and so it does not trigger the mandatory relief set forth in 426.50.

Compulsory requirements:

Have a logical relationship test; AND

The COA had to exist at the time of service of the answer.

There is also a statute that permits relief for failure to file permissive cross complaint. The statute gives the court discretion to permit (or not permit) the filing of a permissive cross complaint. The court looks at the record and says that over the years you have tried to file cross-complaints, but now you have waited towards the end of the litigation and as a matter of discretion, the timing was too late and we cannot permit this.

Page 709:

Cross-complaint v. Affirmative defense—distinguish,

easy to distinguish, a cross complaint seeks affirmative relief where as an affirmative defense is just a defense.

-cross complaint v. setoff—more interesting. What is the different between a cross-complaint and a set-off. If you are successful you can only diminish what the other party can collect from you. Statute CCP 431.70 says NO-- If what you are seeking to raise as a setoff is barred by the compulsory cross complaint statute from being raised as a claim, then you can’t raise it as a set off. You can’t raise it as a bar.

Could curry now raise the claims he wanted to raise in the cross-claim as a setoff? The statute, 431.70 addresses this and says no—if what you are seeking is barred as a counterclaim, you cannot raise it as a set off.

Statutes of Limitations—

when an action is filed, the statute of limitations is tolled as to any cross-complaints that are not yet barred by the statute of limitations (just compulsory cross-complaints). When the action is filed, the SOL is satisfied as to any cross complaint not yet barred, you can raise the cross-complaint later after the SOL has barred, it will relate back to date of compliant.

Joinder of Parties and Claims:

Much of the CA doctrine of the Joinder claims is identical to the Federal Rules. Interpleader pretty much the same.

New Party Cross-complaints—analogous to using the impleader rules, the use of a cross complaint to bring in a new party. The most typical way that this happens is when there is an indemnity claim, i.e. when a party is not identified by the plaintiff, but the defendant brings them in to share liability.

American Motorcycle Association v. Superior Court

Is there a statutory device that authorizes a defendant to bring in a new party on an indemnity claim? AMA was decided after the Li v. Yellow Cab Company, which was the case that established comparative negligence.

Facts:

Kid enteres into a motorcycle race and is injured and he wants to sue the organizers and sponsors of the motorcycle race, the kid’s name is Glen. Glen sues AMA and the Viking motorcycle association. The suit is for negligence, failure to provide a safe environment.

AMA files an answer and then seeks to file a new party cross complaint, and the new party that AMA wants to add in our Glen’s parents. AMA becomes a 3^rd party plaintiff and Glen’s parents would be 3^rd party defendants. Theory is that Glen’s parents were negligent in the supervision of their son. If we are liable, some or all of that liability should be passed to Glen’s parents. Procedurally, is there a statute which allows this 3^rd party cross-complaint? Clearly there is authority for this procedurally to take place.

Interesting is the substantive. Those center on the impact of the Li case and comparative negligence with respect to tort-feasors.

The first thing the court has to answer is whether or not the Li case, which adopted comparative negligence, implicitly overturns the joint and several liability doctrine in CA. This means that you can go after either one of them for the total amount of damages, and it is not just defendants, it is any tortfeasor. This is not altered by the Li case.

Second thing: The statutes that existed in CA at the time of this case set up a notion of shared liability among concurrent tortfeasors. If you sued two tortfeasors and the plaintiff recovers everything from one of the defendants, the contribution statute would say that the defendant who paid everything is entitled to a pro-rata share. Defined by statute to take full amount of liability and divide by total tortfeasors.

The question for the court is, should the defendants share liability among themselves after the Li case? What does the court conclude? The statute is still there, but is that the only way that liability can be shared among concurrent tortfeasors? No. The court says, the way to do it is based on equitable notions of indemnity and they will be based on comparative fault.

Equitable indemnity will be based on comparative fault, just like you have comparative fault between plaintiff and defendant, that payment or payoff will ultimately be divided up among comparative fault among tort-feasors. If AMA was found to be 75% at fault and the parents 25% at fault, Glen could still recover 1 million from AMA, but in turn AMA could recover 25% of that from Glen’s parents.

That is the basic way that comparative fault on equitable indemnity operates. You could have plaintiff v. 3 defendants on a tort claim and the fact finder could decide that:

D1 is 50% at fault

D2 is 35% at fault

D3 is 15% at fault

There is comparative fault between the plaintiff and the defendant, but there is also sharing of fault between the defendants.

Third key thing: there was existing on the books a statute, which dealt with something referred to as good faith settlements. That statute said that if a plaintiff and a defendant tort feasor entered into a pre trial settlement declared to be in good faith, that would not only mean that a plaintiff couldn’t go after the defendant anymore, the other defendant tortfeasors could not go after the settling defendant, the settling defendant was immune to any contribution to the other tortfeasors.

How does that interrelate with this good faith settlement statute? The court says that it doesn’t change it, it doesn’t diminish it just makes it apply in a different manner. Here is how that would operate:

Plaintiff sues 3 defendants for 1,000,000 but prior to trial C settles with plaintiff for 5,000. It is determined to be a good faith settlement. The amount the plaintiff collects from the other tortfeasors will be reduced by the settlement. Say the verdict is 900,000, the amount is 895,000.

Equitable indemnity

Bracket v. State of California

First suit--Plaintiff Spencer sues Gardner and Brackett.

Plaintiff settles with Gardner for 350,000 before trial (5%).

Case proceeds against Brackett who did not settle, and the jury awards him 2.5 million dollars, then the settlement amount is offset from that 2.5 million, so 2.5 million minus 350,000 and you get a net judgment of 2.15 million.

State of CA not sued in first lawsuit. What Brackett does in the second lawsuit is to indeed sue the state. The suit is for comparative indemnity. Brackett thinks it overpaid with the 2.15 million and was after the state to recoup some of what they paid from the state. 85% for Bracket and 10% for the state, 5% for Gardner.

Question, how much is bracket entitled to recover from the state? How do you calculate that?

You set off the good faith settlement amount from the overall verdict. How do you go about dividing it proportionally between the non-settling litigants.

Bracket pays (85/95) and the state pays (10/95)—

The amount that the trial court got to was correct. If you multiply 2.15 x (10/95) the state’s share will be $226,315.

Gardner settled for more than his percentage turned out to be for his damages. When a defendant settles, they have the right to recoup their repayment from the non-settling defendants.

PROBLEM ON PAGE 756:

See the handwritten notes.

Sliding Scale Settlement Headache:

Great for the plaintiff in many respects and for the defendant who settles. Depending on what happens, the settling defendant may end up paying nothing or a whole lot.

Abbot Ford v. Superior Court

There are four defendants who have potential fault, one is Sneed, the driver of the van. Abbot Ford, Ford Motor Company, and Sears.

Plaintiff v. 4 defendants. Sneed, Abbot Ford, Ford Motor Company, and Sears.

Abbott discussed a sliding scale settlement, which was ultimately agreed to with the plaintiff. Terms of agreement: Abott Ford will guarantee that at the end of the day, the plaintiffs will get at least 3 million dollars. If the case goes to trial and the plaintiffs get nothing, then Abbot will award 3 million. If the award is 2 million, Abbot will pay 1 million, if the award is 4 million, Abbot will pay nothing.

2. There are interest free loans to the plaintiffs.

3. Feature is a veto power, held by Ford, and what the plaintiffs agree to is that Abbot can veto any other settlement that the plaintiff attempts to enter into with the other parties.

Wants veto power so they can prevent settlements, they want this case to go to trial.

When this settlement is proferred by plaintiff or defendant as a good faith settlement, other defendants objected.

First argument is that that sliding scale settlements are against public policy because they are unfair to the non-settling defendants, unless there can be some off-set value to the defendants. How do we value a sliding scale settlement where the defendant may end up paying nothing? Do you value as being worth zero so that there is no offset? Do you value it as the total amount of the guarantee (3 million)?

Is a sliding scale settlement of this nature necessarily against public policy and void? The court says, no, you have to look at the facts of each case. How do you go about valuing this type of sliding scale settlement? Court says that they will let the settling parties put a value on it. Valuation is too complicated for the court to figure out. Why does that make sense?

How does the court go about determining if the settlement is a good faith settlement? What is the general notion at stake here?

If it is in the ball park of a settling tort feasors proportionate share of comparative liability, then it is in good faith. The main concern is that it not be too low. If you settle too low then it is unfair to the non-settling defendants because once you settle you are immune from further liability from other defendants, you are passing on all your liability to the other non-settling defendants. If you want this immunity, you have to settle within the ball-park. Those are the tech-belt factors. So to be immune the settling party wants the offer to be high enough so that their sliding scale offer is valid.

Court found a problem with the veto part. What is wrong with the veto provision? Under the settlement they could veto the settlement between the plaintiff and any of the defendants. Court doesn’t think it is not in favor of settlements. It is anti settlement. Does that mean that a veto policy can never pass public policy scrutiny? No, although this one did not, but should be able to veto any liability which is not in the ball park of potential liability of another provision, okay to have a veto to prevent really low settlements. It is not as attractive to defendants because now there is going to be a value put on the sliding scale settlement, (so in this case you have a potential of paying a million dollars given how damages play out).

TECH BELT FACTORS:

Standards to be applied by the court are the so called tech belt factors, which look to determine whether the settlement is in the ball park of the settling defendant’s proportional liability.

As of 1986, the rules have changed and changed in a way that makes it more complicated to do the analysis.

Prop. 51—the fair responsibility act, part of the civil code.

With respect to non-economic damages, a defendant is only liable severally and not jointly. Impact of settlement will change based on damages.

Defendant will only be liable based on their percentage of fault for non-economic damages. Economic damages includes things that are objectively verifiable monetary losses. Non-economic, distress, loss of consortium, reputation, defamation, IIED. See recording.

How does this act operate? Look at the problems at the bottom of page 761:

Problem #1 on the bottom of page 761: See hand notes.

Espinoza case: Page 762—

This is the methodology that all the courts are using to determine the recovery by the plaintiff in the post prop world.

There is a procedure set up to let the court contest the settlement. If you want to bind somebody by the good faith settlement effect, i.e. if you want immunity from economic damage, then you have to make sure that you have all of the defendant tortfeasors brought into that hearing process. They will only be bound if they are parties to the hearing process. If the court makes a decision and one of the parties is not happy with it, then CCP 876 does authorize an unhappy party to seek immediate appellate review by extradordinary writ (writ of mandamus). Split in Cout of Appeal if this is the only way to obtain appellate review. At least one court has said that you don’t have to go through that writ process and that you can wait until the end of the case and then raise it on appeal, but the majority of districts now have said, no, if you want to contest the trial court’s determination as to a good faith settlement, you need to use the writ process if you don’t, you have waived your right. Latter approach makes the most since, all parties need to know if it is a good faith settlement because it affects other defendants. If your client is not happy with the trial court’s determination, use the immediate writ procedure, don’t wait until the end of the case to appeal.

If you are in a diversity case, i.e. case where state law applies, then they will apply CA’s doctrine with regard to the factors. The federal notion of the effect of a settlement on a non-settling defendant applies. It is different than California’s, it does not base the offset on the amount of the good faith settlement. The offset is simply based on the settling defendant’s proportionate share of liability. Take a look at the case if you are interested in that.

CLASS ACTION:

Turn to page 796, which starts the materials on class actions.

California does not yet have a comprehensive statute that deals with class actions in all kinds of cases. What it does have is a comprehensive statute that applies to consumer transactions (CA Consumer Legal Remedies Act), it has rules of court that deal with some of the procedural aspects of class actions. Therefore it has developed by case law, but most courts will rely heavily on the standard set forth in the consumer legal remedies act.

The two general standards are that (1) the class representative must establish the existence of an ascertainable class and a well defined community of interest.

-(2) Class representative must adequately represent the interest of the class.

Common issues of law and fact must predominate over individual issues, the class representatives claims against defendants must be typical of the class, and the class representative must be representative of the class.

Richmond v. Dart industries:

CA is much more charitable than the federal court.

Plaintiff sought to represent a class of homeowners in this development. Alleging that the developer had mislead them in a number of ways—had not come through with sewage or water or other things and they want releif. The relief that was being sought was compensatory damages, punitive damages, constructive trust, and rescission of their deeds. The defendant, opposes this as a class action, but the main argument is that the class is incohesive because there are some people who don’t want to bring a suit, some homeowners don’t think anything is wrong. Some of the developers sent out fliers. The defendant argued that there is antagonism among the class members, they don’t all agree on what the name parties are trying to achieve among the entire class of home owners. Defendant argues that it is not a cohesive class, there is antagonism among the class members, they don’t all agree on what the class is to achieve.

What is important is how the court deals with this antagonism. Is that fatal to the maintenance of the class action? No, it is not. Why? There are all these different ways in which we can accommodate these interests of the people that do not share views with the individuals bringing the class actions. It is not necessarily fatal to the class action.

What is the next problem the court has with this antagonism. If you get rescission or damages, it would hurt people who want to stay there. How does the court deal with that? Is it fatal to the maintenance of the class action? They say it is not fatal, especially at this stage. Class should be certified. It could become grounds as we come closer to trial, but at this stage it is not, it is just a preliminary stage. It is an interesting case, it does reflect the attitude of the California courts.

Is this all a good idea? What is the trial going to look like? Are there too many individual issues that predominate over the common issues? This could be an issue at some point.

Note how this case got up to the state supreme court, how was there appellate review here? This is straight out of appeal, California by case law has a doctrine of if the trial court denies certification of a class action, it is immediately appeallable. You have a right to appeal, it is not discretionary. If you have a right to appeal and you don’t appeal it, you may have waived your right to appeal.

815-21 are notes to examine the various tests. 2 points though—

1. as we know from when we talked about statute of limitations it is unlikely that in CA that a mass tort personal injury class action will be certified as a class because of all the issues that will predominate over the common questions. However consumer fraud class actions, the Supreme Court has been very liberal in approving consumer fraud class actions even though they may involve individual questions. It is kind of a different attitude in those cases towards mass injury cases.

Look at some class action procedures in CA that really distinguish CA from the federal rules.

California takes a different approach to the manner of notice to be given to class members than Federal Rule 23 does. CA says that you must give them notice and ability to opt out. It is not enough money to proceed on your own. The U.S. Supreme court said that in those cases that are for money damages, Federal Rule 23 requires the right to opt out and requires individual notice for the class members where their name and address is available.

The current rule is 3.766 under the renumbering of the rules. CA rule says that notice is required and says that individual notice is an option, but it is not going to be required where personal notification is unreasonably expensive or the stake of the individual class member is insubstantial. It has to do with whether or not it is too expensive. That is one difference between the federal rule. Secondly the question is who pays for the cost of the notice. Federal, plaintiff must pay all the notice costs. CA discretionary, court will look at a variety of factors. Much more plaintiff friendly in CA.

Remedies: Levi Strauss: trust fund set up.

Fluid class recovery—

(page 828) suing and part of damages is you want money left over for people who may need future medical costs, residue remaining after claims can be paid, rollback of prices, claimant fund sharing. What is that and why is it important? Page 828. The federal courts have mostly said that is not proper and they will deny class certification if that is the only meaningful relief to be received on recovery. CA says no, that is authorized whether it is through settlement or court order.

DISCOVERY:

The current status on the California Rules and statutes on e-discovery. To what degree can parties make discovery confidential and not release to third parties.

Scope of discovery—classic statement is that you may obtain discovery on any matter not privileged, which is relevant to the subject matter pending action…

**Does apply to limited civil cases.

Certain portions of the discovery act apply to post judgment discovery (once you get a judgment you need to enforce it).

Contractual arbitration, up to parties to determine what conditions of discoveries apply, in some mandatory arbitration situations, the Discovery Act may apply to those arbitrations by matter of law.

Privileges:

Scope of discovery is limited to things that are not privileged, if something is privileged, then it is not discoverable. For the most part, if you don’t raise an objection based on a privilege, it will be waived. The types of privileges that are available come from a variety of sources, most are in the evidence code, and not the discovery code.

California tends to break down privileges into two different categories—absolute privileges and qualified privileges. Absolute privilege listed on page 843, by saying they are absolute that is a little misleading because many of those have exceptions that are specified in the statute. By saying they are absolute, is a little misleading because many of those have exceptions that are specified in the statute, but what makes them absolute as opposed to qualified—unless you fall under one of those statutory exceptions, a statutory privilege will apply, a qualified privilege by definition you can pierce that privilege by showing the requisite need or prejudice to obtain what you are seeking.

Absolute privileges only have statutory exceptions.

Qualified privileges can be overcome by balancing or weighing the competing interests of the parties, showing need of prejudice.

Page 852—

Qualified Privileges:

Right to privacy is a qualified privilege, comes from Constitution, can override by making certain showings.

Valley Bank of Nevada v. Superior Court case:

-This is an action where the bank sued to recover on a promissory note, the defendant defended on the argument that the bank misrepresented to them what was really available in terms of financing conditions when they took out this note. To prove these allegations they wanted to discover transactions between the bank and other customers. The constitutional right of privacy is raised in response to that request. To do this would violate the right of privacy of the other customers.

What is one of the defendants seeking here with regard to this bank information? To show that other people got a better deal. What factors do they look at to decide whether or not to give the discovery request?

Factors:

(1) importance of information

(2) usefulness

(3) intrusiveness

What factors does the court decide to look at when deciding whether or not to overcome? Must balance the interest of the plaintiff with the privacy of the customers. They want to see how important this information is, and a number of factors to be balanced. One of the things the court realizes is that there are ways to protect the bank customers whose information is being requested. What are some of the ways in which they can be protected?

In camera review of the information, show information only with attorneys. They could have also blocked out certain identifying information and then released it. There are standards to be looked at, but realize that suggesting additional ways you might be able to get the requested information.

Procedural questions—if you are the requesting party, this case is a good case to give you an example of it.

The in camera review: who requested the in camera review in this case? The bank. What will the judge do in an in camera review, what would they look for? Would let the court look at it and decide whether or not to release it and in this case the court did indicate that on remand, that on balance this information looks like it can be disclosed, despite the privilege, and the court says on remand the court should consider a number of different things, including in camera. Important case, sets up notion that it (right to privacy) is a qualified privilege, you can look at a variety of interests and you can look at a number of procedural advices.

Babcock v. Superior Court:

(is other women Babcock or is wife Babcock?)

Dissolution of marriage case. Husband and wife are litigating issues about community property, the other woman involved (Ms. Babcock) has made large purchases of a house and a car. If you are a spouse and you suspect the other spouse is illegally channeling community funds to another party, you can name that other person as a party. The wife is seeking information relating to deposits into Babcock’s bank account. This implicates the constitutional right of privacy and Ms. Babcock raises this issue. The ex-wife is looking for deposits into Ms. Babcock’s bank account. Court goes through the same weighing process.

There is a weighing process, what does the court conclude? Can the qualified privilege be pierced here? Constitutional right of privacy can be pierced. Ms. Babcock has an interest in keeping it confidential, but it can be pierced if there is proper protection. Court can go through transactions and see if they can be traced back to the husband. The trial court judge was somewhat reluctant to do that. Appellate court worried about burden imposed on trial court judge. Appellate court suggests ease of burden on trial court, says that in camera review is appropriate but we don’t want to make it onerous on trial court, so put the burden on Ms.Babcock (check this) and her attorney to make a summary—has to be made under penalty of perjury. That will ease burden on trial court protect privacy interests of other woman.

There is a concern here where that might not be enough protection for the right of privacy, so the court says that a protective order may appropriate in this case. What does this mean? Limits financial records open to review of the court, and how else does it limit? Only people with direct interest in suit can do this, and wife, the client can’t see the actual documents, the attorney can see it, but the protective order can mandate the attorney not give the documents to the wife. You don’t want wife going in for personal reasons, she is very likely not to respect the privacy interests.

If you get information via discovery that is not privileged, you are free to disseminate this information, it is not protected, be careful not to disseminate this information.

Types of privileges (page 858):

Special statutes may come into play—see the sexual harassment issue, designed to keep out information regarding sexual history in sexual harassment cases. Tax returns, membership, punitive damages, Consumer records, employment records, sexual history, employment history, employer information, financial condition, can all raise a right to privacy. See page 858. If you receive a discovery request and you think the information it seeks may raise a right to privacy issue, bring it up.

Attorney work product

—absolute privilege and qualified privilege. The absolute one is defined by statute--any writing that reflects an attorney’s impressions conclusions or legal theories is governed by an absolute privilege. Unless there is some statutory exception, no balancing will take place, it is an absolute privilege.

Fortunately the CA statute also identifies that there should be a conditional (qualified) privilege for another work product. The way you pierce the qualified privilege is showing unfairness or prejudice, or injustice, but those terms are often interpreted as the Federal Rules are interpreted. The CA statute does not define what is covered by this privilege.

Nacht & Lewis Architects, Inc. v. Superior Court:

The party seeking discovery, plaintiff, used form interrogatories which were approved by CA for use in all lawsuits, and using form interrogatories asked for two sets of information through discovery, one was to identify individuals who were interviewed by plaintiff concerning the incident at hand here. Second request was to identify individuals from who written or recorded statements were obtained. Defendant objected to both requests and case came up in appeal.

First issue, what did the court say about the people who were interviewed? If the information reveals people the attorney thought were important to interview, it invokes the absolute work product. If the attorney conducted an interview then an absolute work product privilege will govern because it will show what the attorney thought was important about that interview.

What about the other interrogatory questions? If the witness had prepared a statement him or herself about the incident before being requested to do so by the attorney? Then these statements are not privileged. These types of documents have no attorney interaction whatsoever. It is not attorney work product if the witness produced it independent of the attorney. There is a third category (first employee does it independently, then attorney interviews people). What if the attorney asks the witness to write down everything he knows about the incident, is this protected by the work product and if so, which doctrine? Argument that it would be the absolute privilege, reveals the attorney’s strategy, would probably fall into absolute, but are the statements discoverable or are they privileged? Argument that it would be a qualified privilege, must find out what qualified privilege covers.

Case does not really answer this. Jeanette case does a better job of answering this. Qualified protection if it is derivative in nature. Doesn’t protect underlying facts. How does the court define what is protected by the qualified work privilege. Qualified protection if the work is derivative in nature. What does it mean to be derivative in nature?

The argument that you can make that it is not covered is that it is not derivative. The actual interviewee, if they write what they know, you can argue at least those are the facts of what the person knows.

If witness writes downs something on their own volition, it is not protected. But if three years after the incident an attorney asks, then it is. CA had not done a good job of clarifying this.

Nact—it is demonstrating how these work product privileges might apply and even when you use form interrogatories doesn’t mean that it is immune upon the making of a proper objection. Don’t take it conclusive if another party uses these pre-approved forms.

Crime fraud privilege:

BP Alaska case on page 864—This case deals with the crime-fraud exception to the absolute work product privilege. What does the court conclude? There is no exception based on the notion that the information will reveal a crime or fraud, because the statute does not recognize one. Recently the legislature has adopted 2-3 exceptions to the crime-fraud privileges; malpractice, and in an official investigation or proceeding by a public prosecutor; state bar proceeding.

In re Jeanette H.

Key part is identifying qualified privilege in CA.

-One party is objecting to the requirement that you list your witnessed pretrial. Precedent that when you list witnesses pre discovery, it is protected. Question: Does this privilege apply when it is immediately before trial, eve of trial? How does a court resolve that in this case? It is still protected but there is an exception. When you get to the eve of trial, there is an overall administrative need for the judge, seem to suggest that the qualified privilege doesn’t apply as strongly once you get past the discovery state (discovery ends) and trial is near. Heiser: better to make a statutory exception.

Do they view this request as being protected by any work product privilege at all? Is it a protected work privilege? Yes, but there is an exception, they can say that it is qualified, but the interest of the court outweighs that qualification. There is an overriding administrative need for the court and the judge to know the witnesses to be. The privilege doesn’t apply as strongly once you get past discovery and are on the eve of trial. Professor thinks the proper way is to order an exchange, all judges want a list of witnesses to be exchanged.

Talk about two different topics that are very important:

1. E-discovery, information stored electronically. This is one of the most troublesome issues affecting courts. Burden on the party that is being asked to produce the information. A lot of companies don’t hang on to these electronic documents so they don’t store them in a readily accessible manner. The issue has evolved to burden and expense. The federal rules have been amended to deal with this very topic, they set forth a multi factor test to decide when the information is discoverable and in what format and who should pay the expense of retrieving the information that is not readily accessible.

California does not have a comprehensive set of rules that deal with this problem or this issue. What they have is an old statute that is basically an all or nothing approach that has the possibility of shifting the expenses to the requesting party. The judicial council, which is the body of the government did a long study of this area.

Confidential settlement agreements. To what extent can this information be accessed by the general public. In regards to product liability cases—Bridgestone tire case, but because of confidential settlement agreements this information was kept from the public for many years. Also this occurred with clergy sexual abuse.

General rules:

1. If you get something through discovery, without a protective order or confidentiality agreement, you can disseminate that to anybody you want.

2. If you file some discovery answers in court for purposes other than discovery motions, i.e. summary judgment motion, they are going to be public anybody can access that information.

3. If you enter into a settlement agreement that includes a confidentiality requirement, as a general proposition those will be enforced in CA, with two exceptions—if the information would reveal a felony sexual molestation, then the confidentiality agreement will not be enforced. The second exception has to do with elder abuse cases.

SUMMARY JUDGMENT:

-A way by which a case can be resolved prior to trial based on the showing by the defendant that the plaintiff cannot possibly prove some essential element of the plaintiff’s cause of action.

Summary judgment (complete lawsuit) v. summary adjudication (adjudication can be aimed at specific cause of action)

Entitled to a summary judgment if there is no issue as to a material fact, CCP § 437(c)—long statute with a lot of different parts to it. Moving party has a first initial burden that they must satisfy to set up the adjudication. If the moving party satisfies his or her burden, then the burden shifts to the opposing party to set up a triable issue of fact.

Initially defendants had to come forward with affirmative evidence that conclusively negated some element of plaintiff’s COA. What happened in the 1980’s and 1990’s is that CA caught the fever and set up an easier way in which the moving party could meet their initial burden. What is the modern standard that applies in CA? What must the defendant do?

Defendant must show the plaintiff does not possess the needed evidence (evidence to back up or prove essential cause of action) or cannot reasonbly obtain the evidence. Can just point to record and say that there is on evidence to support the record, this is similar to the Federal Approach.

Why isn’t California identical to the federal approach—is it sufficient for the defendant to point out to the record and say to the court, there are no facts under oath to support some element of the plaintiff’s cause of action? No, you can’t just show the absence of evidence, you have accompany you summary judgment motion, you must report your own evidence and affidavits, one thing that CA requires based on the language of the statute is that you have to accompany your motion with evidence. This is more form that substance in terms of being different than the federal position, but there is something else. You must also demonstrate to the court that the plaintiff cannot reasonably obtain the evidence. Main difference between CA and Fed is the not reasonably obtain. You must state with specificity, how must you accomplish your initial burden? It is not simply enough to point out that there are no facts currently in the record, you must affirmatively show that they can’t get that evidence either as a means of formal discovery (you must also demonstrate that the plaintiff cannot reasonably attain further evidence)—this is the main difference between the CA approach and the Federal approach.

Gaggero v. Yura

Pieces of real estate pursuant to real esate and plaintiff files for specific performance to force the sale of the property. In allegations and complaint, essential element must be alleged and proved.

What is the essential elements that has to be proved? Plaintiff must prove that they are financially ready and willing and able to purchase up to the point of the action.

What does defendant point to, what is the basis for the motion for SJ? That the plaintiff was not financially able to purchase the property. How does the defendant through this motion go pointing about this factual failure? There was nothing in the record under oath that supported the plaintiff’s financial ability to perform, what there was, was a transcript of a deposition to the plaintiff, where the plaintiff was asked about his financial ability to purchase the land. How did the plaintiff respond to the deposition question? He objected under the constitutional right of privacy. Thus, the defendant argued that there was no evidence in the record (because nothing was known to the status of plaintiff’s financial circumstances) that would show that plaintiff had the ability to purchase the land. The defendant did not press this issue at all. If we were in Federal Court, that would have satisfied the initial burden and the burden would just shift to the plaintiff to show that he could have purchased it. In CA this is not enough. This, however did not shift the burden in California. What was lacking was that the defendant failed to show that plaintiff could not reasonably obtain evidence to support.

Federal system there will more of a shift which puts evidence up to plaintiff. Does it make sense to put such a strong burden on the moving party as opposed? Federal approach seems to make more sense. The CA approach does mean that if you are going to successfully set up a summary judgment motion, you are going to have to do a lot of thinking through to obtain a summary judgment motion. More SJ’s denied in CA. Does it make sense to put such a strong burden on the moving party? Must be very diligent in your discovery. Professor’s problem is that they are putting the burden on the moving party to negate some COA of the other parties action—almost like the old rules.

FORMAT OF A SUMMARY JUDGMENT OR SUMMARY ADJUDICATION MOTION IN CA:

Rule 3.1350

Documents that are involved, file a notice of motion for summary judgment, a separate statement for undisputed facts, must file points and authorities, you have to file the evidence that you are relying on to either support your motion or to oppose your motion for summary judgment, if you want to take judicial notice—must include in motion for SJ. If you have done this before it is not difficult, you just need to be sure to follow the correct format. Once you have done that, those documents then form the basis of the motion and for the most part courts are going to look at those documents to rule yea or nay on the motion.

Juge case

on page 938, kind of gets at this problem:

-Here the plaintiff filed a personal injury action against the county of Sacramento. The plaintiff brings an action for negligence saying that the injury was caused by improper design on the bike path.

The defendant raises two different defenses and raises them via the summary judgment motion. One is that there is design immunity, and the other defense is the California bikeways act wasn’t in effect when the bike trail was constructed.

What did the plaintiff’s declaration indicate about whether this curve was safe or not? That the curve would not be safe for speeds 20 mph. What information did the defendant put into the testimony?

The court grants the summary judgment on lack of causation. The plaintiff admitted that he was going less than 12 miles an hour, and the defense said the curve is safe for speeds of less than 13 miles an hour, so there were no facts on the record to support the causation element for the plaintiff’s cause of action.

Does the trial court have a duty to go through the record and develop other legal grounds on which the summary judgment motion should be granted. No, it does not have a duty, but it can search through the record at its discretion. It must give notice however.

Limitaiton on the power—it must be based on an undisputed material fact that is in the moving papers.

The court has to give the parties notice that they are considering this alternate theory, this is a basic due process requirement. This was done here.

How was that notice conveyed here? At oral argument, and actually before oral argument there was a tentative ruling that the court was going to grant summary judgment on the issue of causation, so the plaintiff had plenty of time to prepare a response. The summary judgment here was proper. Basic things about what you need to do to support your motion for summary judgment.

What should the plaintiff have done here to defeat this summary judgment? Respond to the statement of undisputed facts, they could change their position on that. Be careful what you admit.

Simply relying on factually devoid discovery is not going to be sufficient to support your motion for summary judgment, must really show plaintiff cannot reasonably come up with other evidence.h

You need to craft interrogatories to force plaintiff to find everything.

DEFAULT JUDGMENT:

First step is to obtain an entry default, different from default judgment, you can obtain entry default by showing that there is no response in timely fashion. The consequence is that the entry of default cuts off the defendant’s right to answer or do anything. The defendant can still respond to the complaint, so you don’t want to wait too long before you get an entry of default. Fairly easily set aside. Next step is to obtain a default of judgment, which is recognized by the court. Can simply have the clerk enter a default judgment if you have served the defendant (other than by publication) and the amount of damages is fixed. If it is not a fixed sum or it needs to be calculated then you need to go through the court or the judge to get a default judgment entered. To do that, you must engage in a prove up hearing.

The default process in a personal injury or wrongful death case. In those kinds of cases, by statute you are not supposed to state the amount of damages you are seeking in the complaint. The Schwab case indicates the difficulties you can get into if you don’t comply with the separate requirements.

Schwab v. Rondel Homes, Inc.

Rental case where defendant would not rent to plaintiff . In the complaint, asks for punitive damages and other damages, but a sum no less than 250 dollars and punitive damages of 5,000. The defendants don’t respond to this complaint and the plaintiff then gets a default judgment. The plaintiff did not serve a separate notice of damages. Prove up hearing, trial court awarded each plaintiff 50k and then 100k. Then there is an appeal, judgment reduced to 25,000 and 100k for damages.

What does the Supreme Court conclude? Is this default judgment proper? What about the 25,000 for general or compensatory damages? What possible argument could the plaintiff have that that amount was proper?

1. This was not a personal injury action and therefore 425.10 and 425.11 do not apply, they take a broad interpretation as to personal injury and so those two statutes do apply here. (425.11 says you need to serve upon defendant a separate statement of damages before default).

(2) Plaintiff’s say defendant was on constructive notice, authority is the Rodman case, SC upheld a default judgment worth 15k, where the complaint simply alleged damages that exceed the jurisdictional damages of the court. Why didn’t this help them in this case?

2. The authority is the Rodman case, where the authority upheld a default judgment of 15,000 where the complaint alleged that the plaintiff was seeking damages that exceed the jurisdictional requirements of this court. Court says that the 25,000 in compensatory is improper here.

What about the 100,000 default judgment in punitive damages? Didn’t the defendant have clear notice in the complaint that the plaintiffs were seeking 5,000 in punitive damages?

Separate statement provides specific notice of special and general damages, nowadays you may say economic and non-economic damages. You didn’t comply with that statute and provide special and general damages, so your entire complaint is invalid. The current version simply requires a separate statement seeking the nature and amount of damages being sought.

Now, 425.11 simply requires a separate statement setting forth the nature and amount of damages sought. Question is, would the Schwab case have come out differently under the amended statute?

It doesn’t require you to break it down between general and specific, but probably a document that alleged we are seeking 250 for compensatory and 500 for punitive would satisfy the current version of the statute. Most courts say that if you alleged damages in the complaint in a way that complied with 425.11 this would be okay.

How must you serve the statement of damages? If the defendant has not yet appeared, you must serve it in the same way you initially served the summons. If the defendant has appeared then you can serve it to the defendant’s attorney. What if you serve the defendant via publication, can you serve the statement of damages via publication? The purpose of statement of damages is to keep damages private, so the new statute, which in some circumstances say you must serve in the same way as you serve the complaint erases this policy in terms of service by publication.

RELIEF FROM DEFAULT JUDGMENT:

This statute is applicable, even though service by process was improper.

Other methods by which you can set aside a default judgment are primarily set forth by statute—473.5. Court has discretion upon timely motion to set aside if the service of summons does not result in actual notice, usually in cases where service was done by publication.

Other methods are primarily set forth by statute, i.e. in a timely fashion. See to set aside a default or default judgment within a reasonable period of time, not to exceed 6 months. So don’t wait until close to the end of the 6 month period. If you knew about the default and just ignored it, then you may not be able to default.

Beeman v. Burling

Use of discretionary part of 473.5.

-Burling did not file an answer in a timely manner, default was taken by the plaintiff, there was a motion for a default judgment, there was a prove up hearing, the court asked for live testimony by life tenants. Seeks to set aside motion to judgment, case goes up on appeal.

Several arguments of why the court should have the default set aside the argument:

1. Statement of damages was not made in a proper manner. Already served here, properly served.

2. At the prove up hearing, the plaintiff introduced evidence that was broader that was alleged in the plaintiff’s complaint? Why is this helpful to the defendant? Because it constitutes an amendment to the complaint and it opens the door for the defendant to respond. When will it constitute and amendment to allow amendment to a complaint. When there are substantive changes to complaint which may change the liability exposed to defendant. How does the court respond to the issue of other tenant’s testimony? The court said that punitive damages weren’t really at issue, so even if that evidence went to support a new claim, it wouldn’t be relevant—the court wouldn’t be awarding punitive damages here.

3. There is a new statute. 473—discretionary part. Awarding of default was an abuse of the court’s discretion.

What lead to this default according to the facts in the record? The attorney had time to get it done, he just failed to do so. He had to take care of his girlfriend’s baby for four days. The thing with his girlfriend occurred after. In some circumstances this may actually be a factual basis. This case the court found it was not excusable neglect, because he had plenty of time beforehand and even after he had to take care of his girlfriend’s child.

The defendant said that it is so totally inexcusable that he is entitled to relief. This is the positive misconduct rule, when does this help out the attorney? Where the negligence on the attorney is so gross that it amounts to abandonment. This has been construed narrowly. If you construe it too broadly, then attorneys would engage in greater and greater degrees of negligence. Not total abandonment here. 473 changed and amended to provide mandatory relief if attorney supplies affidavit of fault.

Did it help the attorney here? He has done something for the client leading up, so clearly he had not abandoned the client. Last argument is based on an amendment which is very, very important. Provides for mandatory relief by the default or default judgment, under a certan set of circumstances: (1) Motion must be made within 6 months and it (2) must be accompanied by an attorney’s affidavit of fault. They have to be the one who are negligent and made a mistake. After amendment, relief automatic as long as the attorney fesses up. Discretionary part is only useful where client, not attorney is at fault.

Last argument, this statute is a procedural statute, not a substantive one, and procedural statutes can be applied retroactively. The court said that whatever the viability of the old traditional rule is, this amendment would affect substantive rights. Concludes that this is not a retroactive provision.

Distinction between excusable and inexcusable neglect. You don’t see the discretionary part of 473 used anymore. If the attorney is the cause of the default, he should fess up and sign the declaration, then relief will be mandatory.

You can head off a potential malpractice case if you admit that you screwed up. Has to be a situation where the default or the default judgment is caused by the attorney, not the clients. Also will decrease the number of 473 motions going to court as well.

What about if the motion for relief from a default judgment does not occur until after the six month period? California has a long tradition of utilizing equitable relief in these circumstances.

6 month limitation applies to discretionary and mandatory. Must act within a reasonable time within that 6 month period, so if you know about it and don’t act, you run the risk of unreasonable delay. Debate as to whether this applies to the mandatory relief. Can you use relief if it is partially the attorney’s fault and partially the client’s fault? If the attorney’s action is the proximate cause, then yes.

What if you motion for relief doesn’t occur until AFTER the 6 month period after default judgment entered? CA has a long tradition of using equitable relief.

Here, the standard is if it is intrinsic fraud you are not entitled to relief, but you are eligible for relief if you can show that it is extrinsic fraud or mistake.

What constitutes an intrinsic fraud or mistake? Party given notice but has not been prevented. What constitutes extrinsic mistake or fraud? Aggrieved party kept in ignorance, tough standard to approve. Extrinsic case: other attorney sends you a letter saying don’t do anything of a year.

Rappleyea Case:

-The facts are that the defendants live in Arizona, they are served with a complaint and summons from the CA court, they don’t get an attorney, but they consult a friend. The plaintiff obtains entry of default. Time goes on and the plaintiff then seeks entry of a default judgment. Notifies the defendants of this intention to get the default judgment and at that point defendants get proper counsel.

Intrinsic standard is a tough standard to meet. The court does emphasize that the standard is not applied so strictly when you are seeking an entry of default vs. a default judgment. Policy of settling litigation on the merits.

3 part test:

1. meritorious case (signed declaration)

2. satisfactory excuse (clerk misadvised)

3. moving party must demonstrate diligence once entry of default is discovered (not diligent in this case)-no prejudice

Dissent—majority has asked the wrong question, the question is whether or not there was an intrinsic mistake which led defendants to not use section 473.

Serve complaint

Nothing for 30 days

Entry of Default

Default judgment

IF w/in 6 months CCP 473: discretionary—Beeman, has to be excusable neglect or atty abandonment. Mandatory if atty fesses up default set aside.

After 6 months:

-Equitable, Rappeleya, meritorious case, satisfactory excuse, moving party must demonstrate diligence once entry of default is discovered

Involuntary dismissals—

-a number of statutes that set up mandatory time limits. Don’t serve complaint and summons within 3 years, but with fast track, this doesn’t come into play.

Arbitration is consensual and the hope is that the dispute will be resolved without the court being involved.

The incentive is that the courts aren’t involved, but generally arbitration is faster, less expensive, it will get to a final decision a lot faster. And if you are careful in who you select as an arbitrator, you can get a very learned resolution of the dispute. The other benefit is that it is confidential.

Since arbitration is consensual aspect parties can agree on what statutes to use.

Federal Arbitration Act:

California Arbitration Act:

Not self executing.

Moncharsh v. Hiley

Attorney does leave the firm, and there is a dispute as to what amount of fees each is entitled to and this case is voluntarily submitted to arbitration and the arbitrator reaches a decision that the employee does not like.

No guarantee that the arbitration award will be voluntarily paid by a party.

If an arbitrator make an error of fact, can the Superior court vacate that award or modify it.? Generally speaking there is no judicial review with regard to errors of fact in regard to the arbitrator. One of the reasons is that in many arbitrations, there is no record kept. In most case there is no error of fact, but sometimes the parties agree that they can review errors of fact in their arbitration agreement.

What about errors of law? Two points:

Court says that the only grounds on which to review an arbitration award is based on a statute. If the arbitration statutes authorize it, then the court can review based on what the statute authorizes. Generally speaking there is no statute that authorizes review for errors of law, even errors that are clear on the face of the award. In the absence of general lines to the contrary, you are assuming that risk when you agree to arbitration. What minimizes the risk that you will get a grossly unfair decision? There is a statute which guards against specific instances of injustice. Statute makes sure that you have good neutral arbitrators. Because there is so much power put into the hands of the arbitrator, what the statue does is minimize the risk of grossly unfair awards.

What is the presumption at the parties intent: presumption is that the parties intend for the arbitration to be final and binding. If you want it to be something other than that, you must spell it out in the arbitration agreement. That is the key ruling from the Moncharsh case.

The source of an arbitrators powers are from the arbitration agreement. The general presumption will be that the parties want this to be binding and final, which means that there is no review of binding effect of the agreement. Again, you see the general rule being enforced.

Another part of this opinion which is probably dicta, about the question of who gets to resolve what issues as between a court an arbitrator.

Plaintiff employer v. def. employee

Compel arbitration, who has the authority in regards to submitting to arbitration. The two things that are typically raised are:

1. arbitration agreement is invalid

2. The particular dispute is not arbitrable.

General rule, whatever would make a general contract invalid would be a proper defense to an arbitration. Coercion, unconscionability.

The second ground, the dispute is not arbitratable deals with the scope of the arbitration.

Who has the authority to resolve these defenses? If the defense is that the arbitration clause itself is invalid on contract grounds, who has the authority to resolve that defense? The court has the authority to do it.

What if you claim that your entire contract is invalid? Who has the authority to resolve that defense?

In the absence of any contrary intent on the agreement, claims will be deemed subject to arbitration, claims of fraud in the inducement are arbitrable (for arbitrator to resolve) but allegations that arbitration clauses are invalid must be resolved by the court. Fraud in inducement of the contract is where the promisor knows what he is signing, but his consent is induced by fraud, and fraud in the execution is that you don’t know what you are signing and you don’t intend to enter into a contract.

Getting back to Moncharsh, because the employee was really not saying that the employment contract was invalid, the court says that there was no waiver of this illegality argument by not first submitting it to a court. The court notes that if you don’t raise it before the arbitrator, then you will have waived it. There was no waiver here by the employee, the argument really though, what is the argument that he is making about the illegality of the contract?

Contends that it is illegal because it violated public policy. It also says that, in general there is not going to be judicial review of this kind of public policy argument. In other words, that argument is for the arbitrator to resolve and like any other issue in the dispute, the arbitrators decision will be final.

Fair housing rights case:

When arbitrators exceed their powers:

AMD v. Intel case

AMD had agreed with Intel to be a second source with regard to the production of the 32-bit microchip. Intel never intended that, they never used AMD second source chips and basically what Intel was able to do was keep AMD out of this chip market for several years and then AMD couldn’t catch up.

The arbitrator found in favor of AMD and entered relief in an award that was not limited to damages, but basically gave relief that could not be awarded by a court, they ordered Intel to allow AMD to reverse engineer their 32-bit chip and to give them a 2 year license extension to be able to use the chip and sell it.

What comes up on appeal here, is the question of whether or not the arbitrator exceeded their powers. The court says the powers come from the arbitrator agreement. The arbitration agreement did not have any specific limitations on what type of relief the arbitrators could put forward on their award. What the court has to do is they have to interpret the statute saying that the arbitrators could not exceed their powers.

What is the test that the court develops? If you look on page 1045, is the standard review is whether the standard of relief comes form a proper interpretation of the contract of the arbitrator. Remedy awarded must bear some rational relationship to the contract and the breach. Means that they are going to give a lot of deference to the arbitrator. They say that the arbitrator might misconstrue the contract, but as long as the remedy is rationally related to the contract as interpreted by the arbitrator and the breach, the arbitrator will not have exceeded its problems.

Footnote number 12 you will see a clearer statement as to what the standard means. The award is rationally related to the breach if it is aimed at relieving the effects of the breach. Where the award is trying to do something else that it will be beyond the powers of the arbitrator. The court says if you want this not to be the test that applies, then you have to have a specific provision in the arbitration agreement that limits the relief that is available to the arbitrator, if you do that, then it is easy for a court to say that it is not within the arbitrators powers within the contract.

What is the primary basis of her dissent:

-The main goal of the law is justice and everything else is secondary.

One of the key points about arbitration is that it cannot be based on an invalidity ground only based on contracts. What seems to be happening in the arbitration field is that certain doctrines have really gotten a lot of attraction and the main one is the unconscionability. It has been a very successful ground for attacking arbitration clauses. Often the argument is that the clause is one sided.

Saika v. Gold—unconscionable

why is that unconscionable? Seems two sided. Any action against patient would be under 25,000, any against doctor would be over 25,000.

Armendeaz: FEHA—limitations on cost of arbitration.

VARIOIUS PROCEEDINGS:

Emphasize the impact that the trial court delay reduction act has had.

Perceived bias standard in CA. If you read through the notes you would see how that process works. The decision is made by the judge who is being challenged, although if he decides that he or she has not run afoul of the statute, then it can be assigned to another judge.

You get one preemptory challenge that you can use.

Page 87 of the supplement.

Right to a jury trial in CA. The 7^th amendment only applies to the federal courts. IT is one of the few parts of the bill of rights not made applicable to the states by the 14^th amendment. Each state is free to develop whatever rules it wants in regards to civil case. CA has done this in its constitution.

When you have a case that has multiple causes of action, the general test is, that the court should look at the gist of the action to see whether or not it was a legal action. The Supreme Court case that is in the case book, CK Engineering v. Amber steel is interesting because it shows that you can’t just look a the relief.

The CA Supreme Court doesn’t place quite as much emphasis on the nature of relief being requested. It places more on the historical analysis.

CCP 222(2?).5 passed, and enacted and that authorizes voire dire in civil trial by counsel and allows preemptory challenges. One preemptory challenge per side. So plaintiff has 1 and defendants have 1. So if there are 3 defendants and 1 raises a preemptory challenge, the other two cannot raise a preemptory challenge, they must use a discretionary challenge.

Basic point about jury trials and jury verdicts. The CA constitution does not require a unanimous jury verdict for civil cases, it only requires a verdict by 3/4ths of the jury.

Trial without jury:

The important thing there to note is the process in California that in a judge tried case the judge will announce a tentative decision as to how the judge will resolve the case. Once they announce a tentative decision, any party may request a statement of decision within 10 days after the court announces its tentative decision.

What are the purposes of the statement of decision? See page 1127: The purposes are to preserve a record for the appellate courts.

What if you wish to challenge the trial court’s decision as not being supported by the evidence. The appellate court must presume that all the proper findings of fact were made to support the trial court’s conclusion, very difficult to overturn a trial court’s decision when no statement of decision.

Second reason for a statement of decision, it is to make sure the judge has stayed awake during the trial. This is not really much of a purpose because with regard to a statement of a decision---primarily it is important for appeal.

Non-suit and directed verdict and motion for a judgment NOV. A non suit in CA is the terminology used in a jury trial where either at the end of opening statement or at the end of the plaintiff’s case, the defendant will move for a non-suit.

A defendant is entitled to a non-suit if the trial court determines as a matter of law that the evidence is insufficient to find in his favor.

MOTION FOR A NEW TRIAL:

Here CA departs substantially from the federal practice and other jurisdictions.

1. The CA statutes that govern motion for a new trial make it clear that a trial court judge has no authority on its own to move for a new trial. It has to be party initiated. A party has to move for a new trial.

2. Unlike the Federal practice which says that a party may move for a new trial on any ground that has been recognized, CA has a statute, CCP 657. The statute provides seven separate grounds. See page 1158— Judge must create order within 60 days, needs to include grounds under 657, trial order must be written by a judge.

Sanchez-Corea v. Bank of America case.

Another statute puts a time limit on when a judge can rule for a new trial.

What must the trial judge’s order contain if you want to sustain the judgment? An explanation. What are the two different things that must be stated?

-the grounds

-the reasons

Must state an explanation of those grounds. Those are the two requirements. One of the interesting things about this statute, is who writes the order that contains the grounds and the reasons, more specifically, can the judge ask the parties to do it? No. The new trial order must be written by the judge. Why is that?

What does the statute authorize as the appropriate standard? What does the statute authorize the court to do which they can’t do. They can weigh the evidence, they are not just looking to see if there is substantial evidence to support the verdict, they can weigh the evidence.

Sanchez-Corea—filed a lawsuit against a bank and the jury returned a verdict in favor of Sanchez-Corea for 2 million dollars. The bank then files a motion for a new trial. The Bank identifies 6 separate grounds for a motion for a new trial.

What does the trial court judge state as the grounds in that first order?

-there were no grounds, they just granted the order.

-subsequently the trial court judge issues a new order, which does what?

-identifies one ground in the second order which is that the new trial is granted because the evidence is insufficient to support the verdict.

-based on that record the case goes up on appeal by the plaintiff.

First question is whether or not this order is void or not. The reason why it might be void is because the order that was issued in the 60 day time period didn’t state any grounds. What is the defendant’s argument as to why it is not a void order? Rely on 657, which says that you have 10 days to do it.

Distinction between grounds and reasons. The statute only lets you state the reasons in the 10 day window, therefore it requires that you state the grounds within 60 days. You can only state the reasons after 60 days.

What is the consequence of that? Does it mean that the new trial order is void? It is defective, not void. It still is an order granting a new trial, but on appellate review, it eliminates certain grounds that specify defendants motion from being specified on appeal. The appellate court can grant on any grounds stated in a the motion, but the exception is that a new trial order can be affirmed on the grounds of insufficiency of evidence only if those grounds were stated in the new trial order. Because we have a defective order, the Supreme Court takes off the table two of the grounds presented by the motion, insufficiency of the evidence and excessive damages. Note that these are the two grounds where the judge can weigh the evidence.

The judge grants a new trial but doesn’t specify grounds. The plaintiffs take an appeal, can insufficiency of evidence be a ground for consideration on appeal. Yes, but only if it was the only reason listed in the motion for a new trial. Lamanna v. Stewart, a 1975 Supreme Court.

New appeal, only comes into play, if

Insufficiently of Evidence Standard:

Dominguez v. Pantalone

Case is useful to discuss the appropriate standard that should be applied by the trial court judge when the grounds for the motion is insufficiency of evidence. We know that a trial judge can weight the evidence, but how much freedom do they have? Can they look at the facts like a 13^th juror? It is not abundantly clear what usable standard comes out of this. The proper test is from the People v. Robarge case. The court does not disregard the verdict or decide what result would be reached if the case was tried without a jury, but instead it should be accorded the proper weight…see middle of page 1170.

It is meant to be not the quite standard that a trial judge would use in a non-jury case, but it is hard to distinguish. What the court is struggling with is what weight to give the jury’s verdict, the problem is what weight to give it.

Additur and Remittur:

CA obviously has a notion of remitter, where if they think the verdict was excessive they can ask for a new trial or ask the plaintiff to accept a lower amount. CA have the power of additor, which if the trial judge thinks that the verdict is too low, they can grant a new trial or ask the defendant to accept a higher damage level. In CA additur is authorized.

Attorney’s fees:

no limitation on what kinds of cause of action can be governed by the parties agreement. Clearly applies to tort cause of action arising out of a contractual relationship, and or it can apply to contract causes of action, or statutory causes of the action. Up to the parties to decide. 1021 allows parties to reach an agreement about fees rising out of the parties relationship, allows parties to contractually agree, except in tort cases.

In a general sense what is left after that are the cases which don’t fall into these categories and quite often that is a tort case, which usually don’t arise out of a contractual relationship.

Attorney’s fees based on contractual agreement, here another statute enters into play, CCP 1717. What does that statute accomplish? It exists, it takes a unilateral attorney provision and makes is neutral. If you have signed a lease that says only the landlord can obtain attorney’s fees, 1717, will make that mutual, so the tenant can also recover.

1717: Only applies to K’s.

Moallem v. Coldwell Banker Case page 1298:

Here plaintiff sues the defendant and the case goes to trial and the court rules in favor of plaintiff Moallem on the tort claim, but rules in favor of the defendant on Holmes contract claim. Moallem does not recover. At the end of the trial both parties plaintiff and defendant move for an award of attorney’s fees pursuant to 1717. Trial court decides that there is no prevailing party on the contract and denies both requests for fees. Moallem them appeals, but not the defendant.

What is Moallem’s basic argument here? Does he make an argument based on contract that he is entitled to attorney’s fees? No. Why can’t Moallem rely on the K provision? It is a one sided K provision, it only authorizes the banker to recover attorney’s fees, it did not recognize Moallem to recover. Why can’t Moallem use 1717? Key part of 1717 is that it applies to parties which prevail on the K, and that has been construed to say that 1717 does not apply to afford recovery of tort claims, only to K claims. Moallem is unable to use the mutuality of the law aspect of 1717 because Moallem did not prevail on the K claim, just the tort claim.

Zerb, cases where the prevailing party was able to recover attorney’s fees when they prevailed on a tort claim, and Moallem makes an argument based on the Zerb line of cases, but the court says that these cases don’t help you, why not? Whoever was the prevailing party could recover the attorney’s fees, so it was already a mutual clause, secondly the Zerb line of cases, the agreement with regard to attorney’s fees was clearly broad enough to cover tort claims as well K claims.

The attorney fees clause here seems broad enough to cover tort as well as K, so why doesn’t it help? In Mollum the agreement is one sided and it will only become mutual as a matter of law with respect the K claim.

Ultimate argument is one of public policy. An argument of fairness. The court brought up the argument, the same concerns about fairness that led the legislature to adopt 1717, so Mollum argues that as a matter of law they should make the clause mutual as to tort claims in addition to K claims. The court says no because legislature made it clear in their statute.

At the end of the day, the ruling by the trial court judge is affirmed, Mollum is not entitled to attorney’s fees.

One of the issues that comes up under 1717 is if it only applies to an action in K, in some cases if the plaintiff is successful on both the K claim and the tort claim, in some cases the court will simply have to apportion attorney’s fees, what amount is apportioned the K claim and what is apportioned the tort claim. There are times where the factual issues are so intertwined that really the K claim and the tort claim are different titles to the same set of issues that the court won’t apportion, they will just award fees under 1717 based on all the work done in the case.

Siligio case:

One of them that professor wants to point out is on the bottom of 1202-03 where the plaintiff in that action, which would otherwise be governed by 1717, the plaintiff files an action based on K against the defendant, the defendant cross complains based on a tort. Plaintiff must spend fees to prosecute his own K action AND the tort action. Proper for the plaintiff to recover for all time spent on all claims and on defendant’s cross complaint, because facts of that case, plaintiff could only prevail on K claim if they could defeat the tort cross-complaint, must defeat cross-complaint to prevail on the entire action. This is another situation that may come up.

Who is the prevailing party:

The next problematic part of 1717, which is defining who is the prevailing party. The court has the discretion or authority to decide that there is no prevailing party. Resolved by Sue v. Ybarra noted on page 1206. Addressed this issue. The question is how does the SC define who is the prevailing party for purposes of 1717? Are there some limits on the court’s discretion to identify the prevailing party? When the result of the litigation is purely too good news for one party and bad news for another. Plaintiff wins on their claim and defendant loses on his cross complaint, there is no discretion there, the plaintiff has to be declared the prevailing party. This is when the court does not have discretion, when does the court have discretion? If plaintiff sues the defendant and defendant wins, then the defendant is clearly the prevailing party. Did the trial court properly rule in the Moalem case when it ruled that there was no prevailing party. Coldwell Banker was the prevailing party. Purely good news for defendant on K claim, so banker should have gotten attorney’s fees even though they lost on tort claim.

Final thing to say about 1717—no prevailing party where action has been dismissed or dismissed via settlement. Question that came up in the Santisa case is as follows, it was a voluntary dismissal in that case, can parties alter what 1717 says? Can they say that pursuant to K, other party is entitled to attorney’s fees, on that question the court says no, they cannot. 1717 preempts the parties ability to contractually change their relationship, and this would apply also to a mutual clause. Although it most applies to one sided provisions, but it also applies to mutual agreements. If agreement says on voluntary dismissal party X gets attorney’s fees, 1717 rewrites this provision and says no.

Page 1210

Procedure for claiming attorney’s fees. Same as procedure for obtaining cost.

Judge made doctrine:

Notes are pretty self explanatory, there are three or four different doctrines recognized by the courts, one is the common fund theory, the other one is the substantial benefit theory, the third is the equitable private attorney general theory, but this last one is viewed as being preempted by statute, and tort of another doctrine.

Common fund theory comes into play the most. If you have a class action or other action that generates a fund that would benefit a number of other people not before the court, attorney’s fees come out of this fund. Reason behind it: fair because absentees are benefiting from it, so it is fair that they are benefiting from the result. Key thing, see in the Beasely case, where do the attorney’s fees come from when they are based on a common fund here? They come out of the fund itself, instead of a separate add on the defendant has to pay. It is not something the defendant pays on top or in addition to the damages. From the standpoint of the defendant they would much rather have the award made on the common fund theory because they don’t have to pay anything extra.

CCP 1021.5

Page 1218. Case that deals with CCP 1021.5. Codification of the private attorney general theory in CA. This statute has several different criteria, three main ones are if you have action that has resulted in enforcement of public interest, and conferred a significant benefit on general public or large class of persons, and necessity and financial burden are such to make it appropriate, in interest of justice prevailing party is entitled to an award of attorney’s fees. This statute is clearly the most useful one for award of attorney’s fees. Applies not just in government, but also in cases where there is a money damage recovery in a significant class action. What is the difference between recovery of fees under 1021.5 and common fund theory? Difference is that the defendant pays the fees under 1021.5 in addition to what they pay the prevailing party on the merits.

Beasely Case

Case brought against Wells Fargo Bank for fees against credit cards. Class action and it is successfully brought against the bank to judgment for 5.2 million dollars. Will the money come from the fund or from an additional payment. Plaintiff relies on 1021.5. Award of 1.9 millions dollars plus, attorney fees are calculated based on the Loadstar approach, what is this? Look at the hours worked and the attorney’s fees and then multiply it by a number to move it up or down. Take the hours worked by the attorney multiplied by a reasonable hourly fee. Both of those things will be scrutinized by the court. What is controversial is the multiplier, which can be a negative one or a positive one. Plaintiff asks for a multiplier too. Court did not think this was appropriate because trial court felt that they did not obtain success on everything and they reduced multiplier to 1.5 and that yielded a total sum of 1.9 million dollars.

As part of this calculation there was an additional 51,000 simply for the preparation of the attorney’s award. That’s what the trial court ordered in terms of damages in and in terms of award of fees pursuant to 1021.5, so they will have to pay this in addition to damages, so of course defendant appeals.

What is the main argument that defendant makes on appeal that award should not have been under 1021.5. There wasn’t a sufficient benefit to the public. What is the purpose behind 1021.5, the entire statute? Encourage attorney’s to take public interest cases that would not otherwise be financially worth while. Conversely if the case is a good enough one from a financial standpoint, then you don’t need an award of attorney’s fees to encourage you to take this case, the common fund approach may be sufficient. Or if the party has a sufficiently high stake you can get your fees from that party. Necessity of private burden…makes it appropriate. Defendant notes that there was a 5.2 million dollar recovery here. That is the basic argument, how does the court further the financial burden criteria.

Is the fact that the plaintiff recovered 5.2 million himself, will that preclude recovery under 1021.5? No, it is not the amount of the recovery, the inquiry will focus on the estimated value of the lawsuit at the time vital litigation decisions were made. Most vital decision is when attorney accepts the case. What is the estimated value at the time the attorney agreed to take the case to court. Is the estimated value the 5.2 million dollars the plaintiff recovered? Is the estimated amount the plaintiff alleged in the complaint? No. Nobody expects to get as much as they alleged in the complaint. Is the estimated value the amount of the judgment that they plaintiff actually recovered? No, you have to take that and multiply it by the probability, which was 50 percent in this case. In this case it would be 2.6 million. There is one more step, how do you know whether or not the actual recovery was a good recovery? It’s not just the value but also the cost to prosecute it. How do you know whether the actual judgment was a good place to start? Court says this was an excellent award, they went with what experts were saying. Expert’s said that given the nature of the case.

What is the next step of the equation? You compare it to the actual costs of the litigation, and in this case it cost 1.4 million here to bring the suit.

What is the purpose of these two figures, the estimated value and the actual costs, and you have to compare the two. The margin between the two is more than twice, it is a close call but it is still enough. You are trying to see whether or not the estimated value of the case exceeded the actual litigation costs by a substantial margin, if it did, then again it wouldn’t be appropriate to award fees under 1021.5 because a reasonable attorney would take the case regardless. It is 2.6 million and does that exceed the actual costs by a substantial margin, the court says it is a close call. Ultimately the court decides that this factor is satisfied. Why is that? The public benefit of this, in a close case look at what benefits this litigation created. If it did create a significant public benefit they will do this in favor, this is the tipping factor in this case.

This part of the opinion that is cited all the time. Make sure you understand this.

The action must have resulted in an important right that affects public interest, how the Beasly court construe that with the statute? It involves an important public interest because it is a consumer protection action.

Court then looks at the loadstar multiplier and this is a controversial concept but it is well accepted in CA. Court rejects argument that if you are unsure about some of the multipliers you don’t use it. The interesting thing is that the defendants have a good argument here, there should be a negative multiplier. The trial court said that you didn’t recover on everything, but you are still entitled to a positive multiplier, just not the multiplier you want, it is a lower multiplier.

Last thing the court looks at is the court awarding of witness fees. Supplement in last year in Olson v. AAA of Southern CA decided that 1021.5 only authorizes attorney’s fees and not witness fees. That part of the Beasley decision was disapproved. Just saying should not have included witness fees.

Grand case SC approved of much of the other aspects of the Beasley case.

Adoption of Joshua S.

Same sex partnership, child adopted, trying to figure out what rights the parents have with regard to this adoption and it raises a very important issues that was closely watched, SC decided that both partners have to be treated as if they are parents, even though one was the biological parent. In that sense it dealt with a very important issue that was important to the public. The successful party then asked for attorney’s fees pursuant to 1021.5 saying that the criteria had been met. No money in litigation, so financial burden was great and it dealt with issue of public interest and it affected a lot of people.

Is the successful defendant entitled to money under 1021.5? The SC says no, why not? Neither party did anything to benefit the public interest, they were resolving a personal issue. Doesn’t fit 1021.5. Hard to know where this will go next.

Graham case:

to get an award plaintiff’s lawsuit has to be the proximate cause of what benefits the public. What if you file the lawsuit and the defendant changes their behavior without a court order. Are you entitled to an award of attorney’s fees, the court in Graham says that as long as you are a catalyst, then you are entitled to fees under 1021.5, reforming of the broad doctrine.

Post judgment interest:

rate set by statute. Legislature has authority to increase or decrease it, with private litigation, legislation has been set at 10%. CA does have a lot of provisions where they can increase the amount of a damage award based on pre-judgment interest.

3287(a): Every person capable of requiring damages, certain in calculation, is entitled to recover interest thereon from that day. It doesn’t matter what point at which certainty occurs, then you have a right to prejudgment interest. Applies to both contract and tort actions, doesn’t matter when it occurs, just when damages become certain.

Another provision that comes up in the Stein case is section 3288—not arising in contract, non contract case, interest may be given in the discretion of the jury.

Two Statutes 3287(a) and 3288:

Stein v. SC Edison Company:

-fire burns down home—accrual from date of fire or date of complaint?

-jury awards damages in excess of 390,000 and then pursuant to a post judgment motion, the trial court awards pre judgment interest. Defendant appeals because they argue that the prerequisites to 3287 does apply, and that 3288 is inapplicable. Plaintiff’s appeal because they want interest to accrue at an earlier date. Trial court thought the pre-judgment interest accrued at time of complaint, plaintiff wanted pre-judgment interest to accrue at the time of the injury.

3287(a)-what is the general standard for determining when damages are made certain in regard to this particular statute?

Why focus on what the defendant knew to trigger the damages? Once they know what the amount is, then they can settle, attempt to settle, etc.

When were the damages made certain to the defendant in this case? Why not an earlier point, as the plaintiff’s argue? Certain at the point at which they were notified of the first amount. Plaintiff’s make another argument, that the jury should have been permitted to make discretionary, this is another argument, based on section 1388.

How does the appellate court respond to that argument?

-plaintiff has to request it in the pleadings or complaint, the burden should be on the plaintiff to show an earlier date.

-the jury determines the prejudgment interest.

-raised it as post judgment motion, which is okay for 3287, but not okay for 3288.

Prudent practice would be, if you were in a situation where both statutes would apply, you would have to plead and prove both of them.

Levy-Zenter Co. v. Southern Pacific Transportation Co.

3227(a)

Is the plaintiff entitled to pre-judgment interest? Yes.

-When should they start to accrue? Date of complaint?

-Clear certain amount given the first time there was an estimate given by the plaintiff, that was September of 1969, therefore that is the point at which the prejudgment interest would start to accrue.

Several tenants in defendant’s warehouse also sued defendant-

When did the defendant know that the damages were certain? They knew at one point because they admitted it, the only question is form when does it start to run? What the court seemed to be concerned about was the lack of any backup for the amount of damages listed in the interrogatories. No expert evidence, etc. The court decided that therefore, without that backup, the defendant could not be reasonably certain that those were the damages. Does assist your cause as a plaintiff if you can give documentation as to how you arose at those figures.

Effect of Unliquidated Cross-Complaint:

Civil Code section 3291: Applies to tort actions to recover from personal injury damages.

Court Costs, can see amounts over $1,000,000.

Prevailing party entitled to recover costs as a matter of right. Costs set forth in section 1033.5, on page 1239 lists costs. 1032 carries a definition of who is a prevailing party. In those situations the prevailing party is entitled to costs as a matter of right. Civil code section 1717. Continue to look at section 1032(a)(4)-

Fees that are not allowable as costs—transcripts of court proceedings not ordered by the court, then subsection (c) which says if your cost item does not fall into the subsection (a) part and is not prohibited by subsection (b), then the court has discretion to award costs. There is some discretion given to the trial court. The procedure for claiming costs is set forth in Rule 3.1700. Done by post trial motion. There is a procedure set out for submitting cost requests to challenge whether they are allowable costs or not, or to have them struck, and then the court has the authority to order the cost to prevailing party pursuant to a post trial motion.

1242, reference to the McLarand case.

The question is, is the plaintiff a prevailing party? If you look at the language of the statute, it includes the party that has the net recovery. Plaintiff gets zero if costs are offset, so they can’t be the prevailing party.

Some costs are discretionary, that has caused a lot of problems. The costs must be reasonable in amount and reasonably necessary to the conduct of the litigation. All those factors have created a lot of problems for the courts because of new technology. New exhibits, etc. Things that were never dreamed of when the legislature dreamed of, which costs were allowable and which ones were not.

CCP 998

Offer, if accepted becomes a judgment, whole idea is to encourage offers of judgment. Statute sets up certain negative inducements.

If the defendant makes an offer and it is not accepted by the plaintiff and the plaintiff fails to obtain a more favorable judgment, plaintiff shall not recover post offer costs and shall pay defendants costs from time of the offer. Authority for the court to pay the costs of the plaintiffs expert witnesses.

If the plaintiff makes an offer and it is not accepted by the defendant and the defendant fails to obtain a favorable judgment then the court in its discretion may require the defendant to pay for the plaintiff’s expert witness costs: in addition in a tort case for persona injury damages, then the plaintiff is entitled to pre judgment interest from the time of the offer.

Supplement, in order to encourage parties to accept offers of judgment, the statute sets up certain negative inducements to make you accept it. Cost different for a defendant or plaintiff.

Stallman Case:

Basic operation of 998. Plaintiff’s offer of the amount of 225,000. With a provisio that each side to bear its own costs. That offer was not accepted by the defendant, the case goes to trial. The jury returns a verdict of 224,500. This is 500 dollars short of the 998 offer. The plaintiffs are seeking to recover their costs, expert witness fees and pre-judgment interests. Two main questions, number 1, is the offer valid? It is a joint offer made both by the estate and the sole surviving heir.

Why are joint 998 offers held to be invalid?

Why are joint offers typically held invalid? With a joint offer where you give one lump sum, either you give it to multiple parties,or multiple parties are making the offer, then it is really difficult for a court to sort out whether or not the judgment is more favorable to the offer. Here the court decides that this joint offer is valid.

Better thing to do is make an offer to each party from each party. Court says that you must look at the circumstances of each case and see if the joint offer is consistent and if the court can tell whether or not there is a an adequate 998 offer made.

When the defendant has made the offer, what can be added to the verdict? What does the court say about this?

-when a defendant makes the offer and it is not accepted, but the plaintiff gets a verdict, what you can add to it is the plaintiff’s pre offer costs, but not their post offer costs?

What about when it is the plaintiff’s offer, it is all available costs, why is that? To get the defendant to settle.

What the court did was say, well yeah, maybe you have to add the costs that they forego as part of the offer, which is the pre-offer costs, which ironically happen to be 998 dollars, maybe you add that and regardless, if you had that, the amount of the verdict plus the costs still exceed the amount of the offer. Will be able to award costs as part of the judgment.

Section 3291 kicks in, and the plaintiff is entitled, shall receive prejudgment interest in the amount of 10% accruing from the date of the offer.

998 offer is viewed as being open for 30 days. The offeror can revoke the offer within that 30 days.

Did they revoke the counter offer? Court says “no, they didn’t.”

Can attorney’s fees be added to the amount of a verdict? The courts went back and forth on this and finally the statute was amended to make it clear.

APPEALS:

Appeals in CA and focusing on a few different areas. What is an appealable judgment or order with respect to CA courts. The answer is found in a variety of statutes, one being CCP 904.1. Deals with appeals from superior court to Court of Appeal in unlimited civil cases, where amount in controversy is more than 25k. Another case is judge made doctrine. Important of course to know what is appeallabe and what is not because one you have something that is appeallable an a time limit will run in which you must file a notice of appeal. If you don’t do this in a timely fashion, your right will be lost and it is important to know whether certain things which you might think are not final but are nonetheless considered appeallable in CA.

CCP 904.1:

-Provides for appeal from a final judgment, but does not designate what a final judgment is.

-Note also that an order can be appeallable, that particular subsection says that you have a right to appeal after an order made by a judgment which is made appealable in paragraph 1. Certain orders can be appealed after a final judgment.

-A number of orders are immediately appealable.

You must read the statute closely, a number of things that are no final judgments are appealable. If you don’t recognize that and don’t take an appeal and wait until the end of the case when there is a final resolution, you may have found that you have lost your right to appeal because your time limit for the appeal may begin to tick before the final judgment date.

CA said to follow the one final judgment appeal, but this is misleading, but it does emphasize the word final when it talks about a judgment.

Nesbit case on page 1314:

Frequently cited for what constitutes a final judgment. Interpleader action, stake holder deposits af und in the court and names as defendants all potential claimaints. Stake holder is basically saying that we don’t make any claims, but we want to make sure it is distributed properly. March 19, 1990, trial court enters a statement of a decision and a judgment indicating how the funds should be divided between these two defendants. In an interpleader action there is also an allocation of costs and attorney’s fees to be awarded primarly to the stake holder and so that is expected also to be ordered by the court. What happens March 19^th is that the Superior court order does not resolve how much of the costs/attorney’s fees should be allocated to one party or the other.

That particular statement of judgment is served on defendant on March 28^th. So if you look at the rule on which the time to appeal, one of the triggering points is when that final judgment is served on the defendant.

Subsequent proceedings in the Superior Court, it is not until July 23, 1990 until they divvy up who is responsible for the costs and attorney’s fees. Fills in the blanks as to costs. Substantial amount of money that is involved, over 70k. Nesbit files a notice of appeal on July 3, 1990, the same day costs are divided.

Question is: is this appeal which purports to be an appeal timely within the 60 day period? If final judgment was entered March 19^th, it’s not timely, if final judgment was July 3^rd, it’s the same day and is timely.

Important part: How does this court define a final judgment, as opposed to an interlocutory judgment? How is it defined when there is a final decision rather than an interlocutory. Judgment final when no further judicial action to the court is essential to the final determination of the rights to the parties action. Not the form of the decree, but the substance and effect of the decree which is determinative. Suggests it wasn’t the final decision until July 1990, because all the rights between the parties wasn’t resolved until then, because that is when the court resolved question of costs and attorney’s fees. Is that what the court is saying?

Court said that all rights decided in March of 1990, and what happened after is ancilliary, and the final decision took place in March 19, 1990.

Better definition, way it is applied is to talk about the merits of the case, so when no further judicial action of the court is required as to the merits, then you have a final decision. Cost of attorney’s fees doesn’t go to the merits.

Is the defendant out of luck? What can the appellate court review? Court of appeal can review the assessment and costs and attorney’s fees in the July 1990 order, it can’t review the merits of how the main fund was divided between the two claimants. What gives the court of appeal jurisdiction to reveal this particular order? CCP 904.1(a)(2); Post judgment order dealing with costs and attorney fees, it is clearly timely.

Arguing Clause:

Ct. has authority-

Don’t raise, it is waived

Arguing K:

Go to ct.; or

Go to arb.

-raise it, not waived for review by ct.

-don’t raise = waived (don’t mention in arbitration)

Morehart:

Plaintiff that brings multiple counts, in this lawsuit in Superior Court and the Superior court resolves some of these counts, but not all of them. They resolve a DJ and a mandamus aspect, but not some of the damage counts contained in the complaint. Granted in favor of plaintiff and defendant takes appeal. Appeals reverses on merits, goes up to U.S. Supreme Court. Whether or not superior court decision that decided fewer than all counts is an appeallable decision. Defendants and plaintiffs, relied on a long line of court of appeal decisions that would seem to make this superior court decision appealable. What is the gist of what these court of appeal decisions held?

Many court of appeal said that if you are dealing with separate and distinct issues within the lawsuit and they are resolved on the merits, then that is an exception to the final judgment rule and that decision is immediately repealable. Parties argue that it is appropriate for court of appeal to assert jurisdiction even though there was more to be resolved. SC overturns that line of court of appeal decisions, why is that. What is the problem with this exception to the final judgment rule? The problem with the court of appeals rule is that it is uncertain, you don’t know when to appeal. You don’t know when the court of appeal has done what is separate for everything else or when it is gong to be considered to be the overall issues of the case and not final until all the issues of the case have been resolved.

What is the problem this uncertainty creates? It creates two related problems, if you are not sure what the Superior court has done, whether it fits into this category of separate issues not immediately appealable, you will probably file when you don’t need to. Vague standard a prudent attorney will file a notice of appeal.

Appeal could be reviewed while Superior court still has work to do. You don’t have a complete record, you have all the problems associated with an interlocutory appeal. Footnote #9, court lists out 5 different problems. Delay in trial courts, requires Court of Appeal that may itself be resolved in further proceedings in the superior court, counter to any notion of judicial economy, particularly when the standard is so uncertain. Collateral order doctrine and doctrine that when you have multiple parties and all the issues are resolved between two of the parties, the decision that affects those parties are immediately appeallable. Why didn’t court uphold this on analogy to those other doctrines? Why was it reluctant to do that?

This particular exception to the one final judgment rule is not as clear and final as the two other court made exceptions. SC says that Court of Appeal lacked jurisdiction to hear this appeal as a matter of right under 904.1, but nonetheless there was another basis that provided for appellate review, which is extraordinary writ review. In appropriate cases the appellate court can treat a premature appeal as a petition for an extraordinary writ and this is the preferable way to go.

Rule 54(b) of the Federal Rules: District court a dispatcher, indicates appeallable decision, a virtue which does not exist with court of appeals decision.

Why is it preferable to the court of appeals doctrine?

Any appeal is appellate review as a matter of right. Under the Court of Appeals line of cases, you had the right to appeal from separate issues resolved by the trial board.

It’s discretionary, they don’t have to assert appellate review, they have the authority not to assert it.

Way to overcome all those concerns with interlocutory appeal, write review appropriate, it is discretionary, Court of Appeal could assert jurisdiction in this case. General rule is that if you file appeal too early, too bad. But if the court decides to treat it as an extraordinary writ, it is discretionary and the court may grant it.

Has a well established line of cases that limit its applicability to unusual or extraordinary situations. It’s a limiting factor, for those reasons, that is the way to seek interlocutory review without running against judicial economy concerns.

Case on page 1330:

Laraway case,

the Superior court entered something on August 23, 2000 that it designated as an order and it did not award attorney’s fees and costs, and that was not an order. Subsequently on January 29, 2001, the superior court filed something it called a judgment which reiterated the order and set forth its ruling on attorney’s fees and costs. The question for the court was which of those two things were the final judgment for which the time limit begins to run for the appeal? The August order or the January judgment? Which is it? Don’t look at the form, look at the substance. If you ignore the form, it is just like the Nesbitt case. Order is just the name it gave to resolve the issues of the parties, the ancilliary judgment just resolved costs. So the appeal would have to be filed on the August 23^rd, 2000 decision in court.

Compare that to the Griset v. Fair Political Practices case, here plaintiff brought 4 counts that a certain statute violated the free speech right of the 1^st amendment. Superior court ruled on one count, finding no violation, but did not rule on the other three causes of action. What constituted the final and appealable decision. Is the first count sufficient, or must plaintiff wait until all four counts are decided?

Look at the substance, not the form. Court said it ruled on the substance when it ruled on the first count, and therefore it was a mere formality to actually have ruled and dismissed the three counts. Despite the fact that there appeared to be more work on the merits, the court said no, the first count disposed of all the other counts and constituted a final appealable decision. If you waited, you would have had an untimely appeal. Form v. Substance notion is taken seriously by the Supreme Court.

Exceptions to the Judgment Rule:

(1)-If a judgment is final to one party in a multiparty action, that decision as to that one party is immediately appealable as to that final decision. Party can’t wait because they may miss the time limit. Doctrine used to justify immediate appeals when a superior court denies class certification. Viewed as telling all the class members that their action is dismissed and therefore as to all the absentee class members the merits are resolved against them, and they have the right to an immediate appeal. So be careful, you may lose your right to appeal.

(2)Collateral Order Doctrine: when a court orders an interlocutory order it is collateral to the main issue, then it is immediately appealable as a matter of right.

Scope of Appellate Review

page 1346. Depends on what you are appealing from. Clear error, From issue of law it is de novo, if you are appealing of issues of fact, general rule is substantial evidence rule. If you are saying that the trial court has erred in facts, then appeal considers if there is there sufficient evidence to support the trial court’s decision? If substantial evidence does support, then trial court will not be overturned.

Judge case:

Marriage case:

What happens if you don’t request a statement of the decision?

4 pieces of property that are being contested. Husband at trial said the Mercedes was purchased after the parties had separated. Trial court decided it was community property, evidence in deposition suggested it was purchased before separation.

Also at issue was the value of the husband’s medical practice.

This is a proper request. What is the consequence of the Superior Court’s failure of its decision to evaluate the medical practice? It is reversible error per se.

What about as to the other property? What about the attorney’s fees? Does the husband prevail on his argument that that decision is not supported by the evidence.

What must the appellate court do in terms of the standard of review when reviewing this question about whether there was fact sufficient to support the trial court's decision? Appellate court must assume that trial court has made all the proper findings to support the ultimate decision. Therefore it is very difficult to overturn what the trial court has done if you are challenging it as not being supported by the evidence because the reasoning that the trial court used is correct. Same thing with the Mercedes benz, what is the implied finding that the appellate court must make that the Mercedes Benz is community property? In an absence of a statement of decision, what must the appellate court do, they must review the facts most favorable in light of the prevailing party, and apply the substantial evidence rule and they presume that the trial court was correct. It’s called implied findings, assume that the trial court has made all the proper findings that support this decision. Very difficult to overturn what the trial court has done if you are challenging it as not supported by the evidence because the reasoning of the trial court is correct. Statement of decision is usually drafted by the winning party. Meaning that husband may not want to appeal once that happens. Any substantial evidence supports what the trial court has done, it will be affirmed.

If you are going to appeal based on an argument that the factual findings are not supported by evidence then you need a statement of decision.

Stays pending appeal: for monetary damages judgment will not be stayed unless you have a bond or some security.

Stays aren’t automatic pending appeal. Only for injunctions and some other procedures. Category of stays that are discretionary, so even if you meet prerequisites, court is not required to meet appeal. If you do not get your stay granted, you seek an extraordinary writ.

Extraordinary writs:

pretty self explanatory—just be aware of the procedure.

Extraordinary writs: Fair to say that CA state court system is one of the few jurisdictions that is so receptive to extraordinary writ review. This review is interlocutory for the most part. Can apply in Superior court to ask a lower tribunal to do something.

We are talking about an appellate court to provide appellate review of a superior court decision. Only 10% of all writs files are accepted, but the volume is greater.

Writ v. petition:

First thing to do is go through some of the basic terms, writ v. a petition. A petition is a document or set of documents that you prepare and file with the appellate court in hopes of getting a writ. A writ petition is a combination of a complaint, a summary of the lower court case, and includes briefing. The court will consider a writ. The parties involved include the petitioner (person seeking the writ), the respondent, who typically is going to be a Superior Court judge, and the real party in interest, who is the other party opposing your petition for a writ. The Superior court’s role is nominal, they don’t do anything in the process. There are numerous types of writs.

Alternative writ v. a peremptory writ?

When you petition for an alternative writ, what does that mean? If you obtain an alternative writ, it is an order to show cause. It says to the respondent court and the real party, we will grant this writ relief that is requested on the merits, unless you show cause why you shouldn’t do that. Typically it means that all the procedural pre-requisites to writ review have been satisfied and court will address the merits and it wants other side to show cause why writ would not be granted. It doesn’t mean you are going to win, you can have the alternative granted and still lose on the merits.

The other kind of writ is a peremptory writ—it is a ruling on the written merits. The court will grant the writ telling the lower court to do or not to do something.

Another distinction that is not meaningful and that is to distinguish between statutory writs and non-statutory writs and what that distinction refers to is that there are certain situations where the only way to get appellate review is by extraordinary writ. This means that if you don’t use an extraordinary writ to get appellate review, and the time passes for you to do this, then you won’t be able to appeal. Misnomer, authority for all writs comes from a series of statutes.

Some of these writs are significant (denial of motion to quash service of process) the only way to get appellate review is by extraordinary writ. Determinations with respect to a good faith settlement.

Recommended approach, just title petition writ of mandate, prohibition, or certiorari, don’t worry about special name.

All of these special statutes have very short timelines. Motion to quash denial is 10 days, so you must be aware of these things and act quickly when you are in practice.

How is writ review is different from review by appeal? Statute, only certain things can be appealed and appeal is a matter of right whereas writ review is at the discretion. The court has the authority as a matter of discretion not to hear it, or to not issue a peremptory writ. Don’t have to give a writ the same type of attention given to an appeal.

Writ prerequisites.

What are the two main prerequisites to writ review?

1. there must be an inadequate remedy at law. What does this mean in this context? There is no right of appeal is the main reference.

2. There must be irreparable injury. What does that mean? Prejudice will be so great to petitioner that if they can’t get immediate appellate review, they can’t undue the prejudice by waiting for a right of appeal. Somewhat of a subjective notion.

Omaha Indemnity

company case, what was the irreparable injury there? Prejudice so great, if they can’t get immediate appellate review they will not be able to undue prejudice.-prejudice, if the insurance company is left in this case then the temptation for the jury is to vote for the plaintiff because the injury won’t come out of the defendant’s pocket, it will come out of the insurer’s pocket. Demonstrates a typical use of extraordinary writ an bad practice in form on petitioner.

The petitioner made a very poor record, this is probably why the Appeals court waffled on it the first time.

Sav-On Drugs case:

what is the irreparable injury in this case? Discovery dispute and where party resisting discovery has raised objection based on privilege and the trial court has not recognized that privilege as applicable. Classic case of injury, if the information comes out on discovery and it is shown to be an error on appeal, then too late. Info is already out, by far represents the most frequent use of extraordinary writ (denial of asserted privilege during discovery).

Brandt case:

attorney’s fees are an element of damages. Defendant files a motion to strike that part of the relief and it is struck at the pleading stage and then the plaintiff, where is the harm, can’t the plaintiffs just proceed to the trial on the merits of the case? They are not going to lose that right to bring the issue on appeal, so where is the irreparable injury and where is the injury at law?

Court says that it is an issue of uncertainty in the appellate court. Judicial economy, they don’t want to have to remand it down and have a new trial. Can’t just add on attorney’s fees. It is an issue for the jury. Even if it is not a stated prerequisite, if you can convince the appellate court that there would be a great savings in they can rule on this issue now in an extraordinary writ, it can really help your chances for review.

What about the Palma case? Why is writ review appropriate there? It is because this is what you would put in the category of a statutory writ. Part of the summary judgment statute, 473(c). The statute authorizes it, therefore there is not much concern that there is irreparable injury, it is authorized by a special statute.

Palma Case:

Here there was review by extraordinary writ and the court of appeal in this case granted the extraordinary writ and directed that summary judgment be entered by the trial court. Then the plaintiff eventually seeks appellate review of that ruling and it makes it up to the Supreme Court. The concern is the process that is used by the petitioner that is used in this case by the defendant.

Petitioned for a peremptory writ in the first instance, what happens? Writ to the merits, skip the alternative writ. The Court issued a peremptory writ. What does this mean? The Court skipped the alternative writ and issues a peremptory writ. Why does the court have to address this problem? It’s a notice problem, but not to the level of a Due Process notice problem. The problem is that the party that is opposing the petition doesn’t know how to respond. It could respond by arguing everything on the opposition, maybe that is the safe thing to do, but they probably could respond in a much less comprehensive manner.

If somebody seeks an alternative writ, would you necessarily go into all the merits of the case? No, you could focus on whether it is appropriate for a writ review. You don’t have to go into full blown opposition as to the merits. They don’t know how many resources to throw at the petition. So primarily for that reason, the Supreme Court says what? What is the conclusion by the Court? Is it is proper for the Appellate court to issue a peremptory writ solely on a petition for an alternative writ? If the appellate court wants to rule on the merits based solely on the basis of an alternative writ, they must give the real party in interest notice.

For a long time, many of the courts of appeal had local rules that said they wanted petitions of extraordinary writs to petition for a preemptory writ in the first instance. That was the prevalent view up until 10 years ago. Now the prevalent view is the opposite. Now they prefer that your petition be a petition for an alternative writ, if granted they will move onto the peremptory writ stage. The benefit of the current approach is that the petition for an alternative writ can be summarily denied and the appellate court does not have to give any reason for denial.

To what degree does the traditional discretion apply to the so called statutory writs, those situations where the only way to get appellate review is by extraordinary writ (such as motion to quash)…court said that it will keep the masquerade of discretionary, but if you were to deny it without reaching the merits, it would be an abuse of discretion. Not really discretionary, they have to address the merits. Pretty much the message that comes from this case.