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California Law Update – May 2022

By May 31, 2022October 4th, 2022Law Updates
  1. (Federal Offer of Judgment) Plaintiff’s acceptance of a Rule 68 offer of judgment prevailed over the court’s grant of summary judgment for defendant that was granted while the offer was pending. Robert Edward Kubiak v. County of Ravalli; Stephen Holton; Daryl Petz (No. 21-35542 D.C. No. 9:20-cv-00036-DWM United States Court of Appeals Ninth Circuit Filed May 3, 2022)
  2. (Settlement Agreement) Plaintiff could not void a settlement agreement based on a claim that her attorney threatened her to accept the settlement, because defendant did not know about the supposed duress and relied on the settlement in good faith. Laura Fettig v. Hilton Garden Inns Management LLC (No. B307348 Los Angeles County Super. Ct. No. BC596162 California Courts of Appeal Second Appellate District Division Eight Filed May 4, 2022)
  3. (Jury Trial) Trial court erred by deeming plaintiff’s failure to follow a local court rule as waiver of a jury trial. Joseph Amato v. Steve Downs (No. E075421 Super. Ct. No. PSC1701800 California Court of Appeal Fourth Appellate District Division Two Filed May 6, 2022)
  4. (Arbitration) Plaintiffs asserting prejudice as to defendant’s delay in asserting its right to arbitrate must show more than just incurrence of costs in anticipation of litigation. Peter Quash v. California Commence Club, Inc. (No. B310458 Los Angeles County Super. Ct. No. 19STCV42445 California Court of Appeal Second Appellate District Division One Filed May 10, 2022)
  5. (Good Faith Settlement) A petition for a writ of mandate is the exclusive means to obtain appellate review of court’s good faith settlement determination. Pacific Fertility Cases (No. A164472 San Francisco City & County Super. Ct. No. CJC-19-005021; JCCP No. 5021 California Court of Appeal First Appellate District Division One Filed May 11, 2022)
  6. (Cumis Counsel) Even assuming that the right to independent counsel attached, the insured’s allegations that a conflict of interest existed did not meet the standard under Rule 1.7 (b) of the Rules of Professional Conduct. Nshan Simonyan v. Nationwide Insurance Company of America (No. C091100 Super. Ct. No. 34201800240790CUBCGDS California Court of Appeal Third Appellate District Filed May 16, 2022)
  7. (Statute of Limitations) The statute of limitations for wrongful death claim against the senior living facility was not revived by felony convictions against the facility’s staff under Code of Civil Procedure Section 340.3. Paul Cardenas v. Horizon Senior Living, Inc. (-2d Civ. No. B312091 Super. Ct. No. 20CV0138 San Luis Obispo County California Court of Appeal Second Appellate District Division Six Filed May 19, 2022)
  8. (Medi-Cal Lien) The trial court erred in approving a Medi-Cal lien on a settlement without determining what portion of the settlement represented past medical expenses. Daniel C. v. White Memorial Medical Center (No. B308253 Los Angeles County Super. Ct. No. BC585574 California Court of Appeal Second Appellate District Division Three Filed May 26, 2022)
  9. (Expert Testimony) Hip replacement company could offer medical expert testimony to rebut plaintiff’s causation claims even though the expert’s opinion on alternative causes was expressed to less than a reasonable medical probability. Gary Kline v. Zimmer, Inc. (No. B302544 Los Angeles County Super. Ct. No. BC444834 California Court of Appeal Second Appellate District Division Eight Filed May 26, 2022)

The above referenced court opinions have come to our attention during last month. Please find below a brief summary of these opinions for your consideration.

  1. (Federal Offer of Judgment) Plaintiff’s acceptance of a Rule 68 offer of judgment prevailed over the court’s grant of summary judgment for defendant that was granted while the offer was pending. Robert Edward Kubiak v. County of Ravalli; Stephen Holton; Daryl Petz (No. 21-35542 D.C. No. 9:20-cv-00036-DWM United States Court of Appeals Ninth Circuit Filed May 3, 2022)

Plaintiff brought a civil rights suit against defendant and others. The defendant filed a motion for summary judgment on all claims. Several weeks later, while its motion was still pending, the defendant served a Federal Rule 68 offer of judgment for a sum of money plus costs and attorney’s fees. Before the Federal Rule 68 fourteen-day window had closed, the District Court, which did not know that defendant made the offer, issued an order granting the summary judgment motion. The court did not enter immediately enter a final judgment. Rather, it said the judgment would be entered in due course after it issued a reasoned opinion. Within an hour of entry of this order, the plaintiff accepted the defendant’s offer of judgment. The District Court held that, under Rule 68, it was bound by the offer of judgment. Judgment was thus entered for the plaintiff for the offer of judgment plus costs and fees. The defendant appealed and the appeals court affirmed. The appeals court found that the District Court’s decision was not final as it stated the judgment was to be entered in “due course” because it needed to issue a “reasoned decision.” Given that many things can happened during course of writing that decision, such as a judge changing its opinion, the grant of summary judgment could not be deemed an appealable, final judgment. Therefore, plaintiff’s acceptance of the offer of judgment was valid.

  1. (Settlement Agreement) Plaintiff could not void a settlement agreement based on a claim that her attorney threatened her to accept the settlement, because defendant did not know about the supposed duress and relied on the settlement in good faith. Laura Fettig v. Hilton Garden Inns Management LLC (No. B307348 Los Angeles County Super. Ct. No. BC596162 California Courts of Appeal Second Appellate District Division Eight Filed May 4, 2022)

In this matter, plaintiff was seeking to escape a settlement that she put on the record. She claimed that her trial lawyer forced her to take the deal. The trial court refused to void the settlement. Duress by a third person cannot void a contract when the other contracting party did not know about the duress and relied in good faith. Plaintiff settled with defendants who were unaware of the alleged duress. Her accusation against her attorney did not enable her to rescind a contract with others innocent of the charge, therefore, the appeals court affirmed the trial court’s decision affirming the settlement.

  1. (Jury Trial) Trial court erred by deeming plaintiff’s failure to follow a local court rule as waiver of a jury trial. Joseph Amato v. Steve Downs (No. E075421 Super. Ct. No. PSC1701800 California Court of Appeal Fourth Appellate District Division Two Filed May 6, 2022)

This matter involved a breach of contract action involving a real estate transaction. On the day of trial, the court found that plaintiff had waived its right to jury trial by failing to comply with a local pretrial procedure rule. It then denied the plaintiff’s request that a different judge hear the case due to the trial judge’s involvement in pretrial settlement negotiations. After the plaintiff presented its evidence, the court granted motion for judgment in favor of the defendant on all claims.

The plaintiff contended the judgment should be reversed because he was erroneously deprived of his right to a jury trial. He further argued that the trial judge erred by failing to recuse himself as a trier of fact, by dismissing one of the plaintiff’s witnesses prior to the conclusion of the witness’s testimony, and by granting the defendants’ motion for judgment. The appeals court reversed finding that the trial court erred in deeming plaintiff to have waived jury trial, despite his violation of local rules. It therefore reversed the judgment without deciding the plaintiff’s claims of other error.

The facts that lead to the plaintiff being denied a jury trial occurred when one day prior to the trial, the court room assistant emailed the plaintiff requesting the delivery of trial binders and documents that same afternoon. The plaintiff failed to comply. On the trial date, plaintiff submitted a binder of some documents, but they were inadequate under the Riverside Superior Court Local Rule 3401. The trial court then deemed plaintiff to have “waived jury trial” and ordered the matter to continue as a bench trial. Although plaintiff failed to comply with the local rules, the trial court was found to have provided inadequate prior notice and an opportunity to be heard to the plaintiff. The court reasoned that, had plaintiff been given an opportunity to be heard, he would have argued against the detrimental sanction and denial of his jury trial. Moreover, the appeals court disagreed with the catchall language of Section 575.2 of the California Code of Civil Procedure which states that a party can waive a jury trial by failing to appear at the trial, by written or oral consent, by failing to request a jury trial, or by failing to timely pay the fees or deposit of the fees sum of the fees and millage of the jury. The appeals court felt that the trial court inappropriately broadly construed this language to deny plaintiff its ability to have a jury trial. Accordingly, the appeals court reversed the trial court’s ruling that deemed plaintiff to have waived his right to jury trial by his failure to comply with local rules.

  1. (Arbitration) Plaintiffs asserting prejudice as to defendant’s delay in asserting its right to arbitrate must show more than just incurrence of costs in anticipation of litigation. Peter Quash v. California Commence Club, Inc. (No. B310458 Los Angeles County Super. Ct. No. 19STCV42445 California Court of Appeal Second Appellate District Division One Filed May 10, 2022)

Defendant appealed from an order denying its motion to compel arbitration of a dispute with a former employee. Plaintiff argued that the defendant had waived its right to arbitrate by waiting 13 months after the filing of the lawsuit to move to compel arbitration, and by engaging in extensive discovery during that period. Plaintiff claimed the delay prejudiced him by forcing him to expend time and money preparing him for litigation. The trial court agreed, finding that the defendant had waived the right to arbitrate by propounding “large amount of written discovery,” taking the plaintiff’s deposition and expending significant time meeting and conferring.

The appeals court reversed. It noted that the California Supreme Court has made clear that the participation in litigation alone cannot support a finding of waiver, and fees and costs incurred in litigation alone will not establish prejudice on the part of the party resisting arbitration. This rule according to the appellate court had force here, where plaintiff admitted he incurred no costs in litigation that he would not otherwise have expended had the case gone to arbitration earlier. The appellate court found that other cases with in opposite results had relied upon an unreasonable delay prejudicing a party resisting arbitration. In this case, there was no showing that the plaintiff was prejudiced by an unreasonable delay.

  1. (Good Faith Settlement) A petition for a writ of mandate is the exclusive means to obtain appellate review of court’s good faith settlement determination. Pacific Fertility Cases (No. A164472 San Francisco City & County Super. Ct. No. CJC-19-005021; JCCP No. 5021 California Court of Appeal First Appellate District Division One Filed May 11, 2022)

In this case, the appellate division was asked to consider whether the determination of good faith settlement is also reviewable in an appeal brought by a nonsettling party defendant. Here, a group of defendants had several claims against them. A nonsettling defendant argued that a ruling on the determination as to whether or not there was a good faith settlement was reviewable and those settling defendants argued that it was not. Addressing a split in the appellate courts on this issue, the appellate division reaffirmed a decades-old decision of this division similarly concluding that a good faith settlement determination is reviewable only by a timely petition for writ of mandate and in accordance with Code of Civil Procedure section 877.6, therefore, the appeals court dismissed the appeal.

  1. (Cumis Counsel) Even assuming that the right to independent counsel attached, the insured’s allegations that a conflict of interest existed did not meet the standard under Rule 1.7 (b) of the Rules of Professional Conduct. Nshan Simonyan v. Nationwide Insurance Company of America (No. C091100 Super. Ct. No. 34201800240790CUBCGDS California Court of Appeal Third Appellate District Filed May 16, 2022)

This dispute involved a plaintiff and its insurer and its insurer’s handling of plaintiff’s defense in an action arising out of a vehicle accident in which the plaintiff was a driver. Plaintiff asked his insurance company defendant to appoint as Cumis counsel, a law firm who he had already hired to advance his affirmative claim against the driver who hit him. The defendant insurer refused. The plaintiff appealed from a judgment of dismissal after the trial court sustained the insurer’s demurrer to its second amended complaint without leave to amend. Plaintiff argued its allegations were sufficient to state claims for breach of good faith and fair dealing, and that the trial court abused its discretion in denying his motion to reconsider based on new allegations. The appeals court affirmed the judgment. The appeals court relied on Rule 1.7(b) of the Rules of Professional Conduct which provides that a lawyer shall not represent a client if there is a significant risk the lawyer’s representation of the client will be materially limited by the lawyer’s responsibility to or relationships with another client, a former client or a third person, or by the lawyer’s own interests. The court held that, even assuming that the right to independent counsel attached, plaintiff’s allegations did not meet the standard of Rule 1.7(b). The plaintiff had complained that the defendant insurer, the insurer’s appointed counsel was often retained by the insurer to represent its insurer in other cases. The appeals court found that Rule 1.7(b) applies where there is a significant risk that a lawyer’s representation will be materially limited as a result of a lawyer’s other interests. Even though the insurer determined that the plaintiff was a fault, it did not reserve its rights and agreed to fully defend the claim. Therefore, the defendant insurer’s interest in the litigation was to defeat liability and minimize damages. The court noted that the mere possibility of subsequent harm was insufficient and therefore affirmed the judgment.

  1. (Statute of Limitations) The statute of limitations for wrongful death claim against the senior living facility was not revived by felony convictions against the facility’s staff under Code of Civil Procedure Section 340.3. Paul Cardenas v. Horizon Senior Living, Inc. (-2d Civ. No. B312091 Super. Ct. No. 20CV0138 San Luis Obispo County California Court of Appeal Second Appellate District Division Six Filed May 19, 2022)

Plaintiff was a resident of a long-term care facility. He suffered from dementia. On many occasions, the plaintiff left the defendant’s facility without the knowledge of staff. On his last unsupervised foray away from the facility, he wandered for several miles and was hit by a car and killed.

The director of the facility as well as the manger were convicted of felony elder abuse and manslaughter in the death of the resident. The heirs of the resident brought an action against the skilled nursing facility, as well as the manager and director alleging negligence, willful misconduct, elder abuse, and wrongful death. The skilled nursing facility demurred to the complaint on the ground that it was barred by the two-year statute of limitations. Plaintiffs conceded that more than two years had passed since they filed their complaint despite the expiration of the two-year statute of limitations. Plaintiffs argued, however, that the felony convictions of the manager and the director revived the statute of limitations under California Code of Civil Procedures section 340.3. Plaintiff claimed that because the skilled nursing facility was liable under the doctrine of respondeat superior, the statute of limitations was also revived as to skilled nursing facility.

The skilled nursing facility replied that because it had not been convicted of any crime the subject section did not revive the statute of limitations as to it. The trial court agreed with the skilled nursing home and sustained its demurrer without leave to amend. The plaintiffs appealed the order sustaining the demurrer. The appeals court held that the extended statute of limitation should not apply to the employer of the felon in an action based on the doctrine respondeat superior and affirmed the trial court’s ruling.

  1. (Medi-Cal Lien) The trial court erred in approving a Medi-Cal lien on a settlement without determining what portion of the settlement represented past medical expenses. Daniel C. v. White Memorial Medical Center (No. B308253 Los Angeles County Super. Ct. No. BC585574 California Court of Appeal Second Appellate District Division Three Filed May 26, 2022)

Plaintiff, a severely disabled child whose congenital abnormalities were undetected during his mother’s pregnancy sued various medical providers for wrongful life, settling with one of the physicians. The California Department of Health Care Services (DHCS) asserted a lien on the plaintiff’s settlement to recover what DHCS paid for his medical care through the state’s Medi-Cal program, and the trial court awarded DHCS the full amount of the lien.

The appeals court reversed the decision of the trial court. It rejected the plaintiff’s contentions that DHCS’s lien was preempted by federal law and that there was no substantial evidence that plaintiff’s settlement included payments for past medical expenses. The court found, however, that the trial court erred by failing to distinguish between past medical expenses and other damages, and to apportion the settlement accordingly. Therefore, the appeals court reversed and remanded the trial court to make the required findings and allocation. The appeals court required the trial court to determine which portion of the settlement with the settling defendant between the past medical expenses with regard to a particular settlement and what amount was allocable to that care. The appeals court also found that the trial court did not make a finding as to who the plaintiff or DHCS would pay for the plaintiff’s future medical expenses.

  1. (Expert Testimony) Hip replacement company could offer medical expert testimony to rebut plaintiff’s causation claims even though the expert’s opinion on alternative causes was expressed to less than a reasonable medical probability. Gary Kline v. Zimmer, Inc. (No. B302544 Los Angeles County Super. Ct. No. BC444834 California Court of Appeal Second Appellate District Division Eight Filed May 26, 2022)

This is an appeal of judgment entered after a limited retrial of plaintiff and a medical device manufacturer. The medical device manufacturer asserted that the trial court made two categories of evidentiary error and the jury awarded plaintiff excessive damages. The appeals court agreed with the defendant that the court erred in categorically excluding all of defendant’s proffered medical opinions expressed to less than a reasonable medical probability as to issues on which plaintiff bore the burden of proof. Because that error prevented the defendant presenting any expert testimony as to an issue where expert testimony was essential, the appeals court reversed for a retrial.

During the retrial, the trial court excluded testimony of the defendant’s expert regarding alternative causes of the plaintiff’s injury because he was unable to offer an opinion to a reasonable medical probability.

In reversing the trial court, the appeals court noted that the personal injury actions, the plaintiff bears the burden of proving that the defendant’s negligence was the legal cause of his injury. Therefore, the opinion of
the plaintiff’s medical expert must be expressed “to a reasonable medical probability,” which means more likely than not. However, the standard does not apply to a defendant’s efforts to challenge plaintiff’s case since the prima facie burden remains with plaintiff. In this matter, defendant offered their expert testimony for purposes of challenging the plaintiff’s expert opinion regarding causation by presenting alternative causes of hip pain that did not rise to a reasonable medical probability. However, as the defendant, it merely needed to show that plaintiff’s evidence was insufficient to prove that the plaintiff’s injuries were more likely than not caused by defendant. Thus, it should have been permitted to offer expert opinion for less than a reasonable medical probability that the plaintiff’s injuries may have been attributable to other causes. Withholding such information would deprive the jury of relevant information to assessing whether plaintiff had met its burden of persuasion.

Should you have any questions concerning these court decisions or desire a copy of any of them, please do not hesitate to contact our office.