Justia Civil Procedure Opinion Summaries

Plaintiff sought attorney fees under Code of Civil Procedure section 1021.5, the "private attorney general" attorney fee statute and the trial court denied his application. The court concluded that the trial court correctly found that plaintiff enforced an important right affecting the public interest, satisfying the first prong of the statute. The court concluded, however, that the court erred in concluding that the second and third prongs were not satisfied. The trial court erroneously concluded that the benefit plaintiff's lawsuit conferred on others "may not prove to be significant." The trial court also erred when it concluded that because plaintiff sought recovery of a large amount of money paid as tax on investment gains, and therefore had "significant assets," he did not need the incentive of the private attorney general statute to bring his lawsuit. Accordingly, the court reversed the order denying attorney fees and remanded for a determination of the fees to be awarded.View "Cutler v. Franchise Tax Bd." on Justia Law

In 2008, defendants K. William Clauson and the law firm of Clauson, Atwood & Spaneas, represented plaintiff James Yager in an action against D.H. Hardwick & Sons, Inc. (Hardwick), which alleged that Hardwick was the party who "trespassed on Plaintiff's land and cut timber belonging to Plaintiff." The trial court granted summary judgment in favor of Hardwick because the action was filed more than three years after the timber cutting ceased and, therefore, was barred by the statute of limitations. The trial court also concluded that plaintiff had failed to demonstrate that the discovery rule applied to toll the statute of limitations. The trial court denied plaintiff's motion for reconsideration, and the Supreme Court affirmed the trial court's decision. Plaintiff subsequently filed a malpractice action against defendants, alleging that they "breached the duty of care owed to [plaintiff] by failing to file the D.H. Hardwick action within the timeframe allowed by the applicable statute of limitations, and by otherwise failing to represent [plaintiff's] interests with reasonable professional care, skill, and knowledge." Defendants moved to dismiss the case, alleging that plaintiff: (1) failed to provide requested discovery information; and (2) failed to disclose the experts required to prove his case. The trial court granted the defendants' motion. Plaintiff filed a motion for reconsideration, arguing that expert testimony was not required to prove legal malpractice where defendants failed to file a claim within the applicable statute of limitations. The trial court denied the motion, and this appeal followed. In granting the defendants' motion to dismiss, the trial court did not examine the specific facts of the case to determine whether the nature of the case was such that expert testimony was required. Accordingly, the Supreme Court vacated the trial court's dismissal order and remand for further proceedings. View "Yager v. Clauson" on Justia Law

In this case and its companion, LK Operating, LLC v. Collection Grp., LLC,(No. 88132-4), the central issues on appeal arose from a joint venture agreement regarding a debt collection business. The debt collection business operated according to the terms of the joint venture agreement, as originally proposed, from approximately winter 2005 through summer 2007. In this opinion, the issue presented to the Supreme Court was whether the trial court erred in applying the doctrine of equitable indemnification (known as the "ABC Rule") to hold that the legal malpractice plaintiffs here suffered no compensable damages as a matter of law and that summary judgment dismissal was appropriate. "Where the only damages claimed by a legal malpractice plaintiff are attorney fees incurred in a separate litigation and the only legal basis on which plaintiff asserts those fees are compensable is the ABC Rule, then the defendant is entitled to summary judgment dismissal if the ABC Rule does not apply to the undisputed facts as a matter of law." That was the situation presented in this case, and as such, affirmed the trial court. View "LK Operating, LLC v. Collection Grp., LLC" on Justia Law

This case stemmed from litigation involving long grain rice producers' allegations that Bayer contaminated the United States rice supply. Plaintiff class representatives filed suit for unjust enrichment and quantum meruit against other plaintiff lawyers, alleging that these other lawyers benefited in their state court actions from litigation materials and work product generated in the MDL by the plaintiff class but refused to pay for it. The district court granted defendants' motion to dismiss for lack of personal jurisdiction. The court concluded, however, that each defendant voluntarily entered Missouri more than once to negotiate settlement of their state court cases, a settlement process which ultimately resulted in their receiving compensation as part of a settlement. Their voluntary entry into Missouri for financial benefit was both the transaction of business as that term is used in the Missouri long arm statute and constitutionally sufficient minimum contacts under the Due Process Clause. Accordingly, the court reversed and remanded. View "Downing, et al. v. Goldman Phipps, et al." on Justia Law

Illinois insurance regulators permitted WellPoint to acquire RightCHOICE health insurance. WellPoint caused RightCHOICE Insurance to withdraw from the Illinois market. WellPoint offered the policyholders costlier UniCare policies as substitutes. Those who chose not to pay the higher premiums had to shop for policies from different insurers, which generally declined to cover pre-existing conditions. Former RightCHOICE policyholders filed a purported class action. The district court declined to certify a class and entered judgment against plaintiffs on the merits. No one appealed. Absent certification as a class action, the judgment bound only the named plaintiffs. Their law firm found other former policyholders and sued in state court. Defendants removed the suit under 28 U.S.C. 1453 (Class Action Fairness Act); the proposed class had at least 100 members, the amount in controversy exceeded $5 million, and at least one class member had citizenship different from at least one defendant. Plaintiffs sought remand under section 1332(d)(4), which says that the court shall “decline to exercise” jurisdiction if at least two-thirds of the class’s members are citizens of the state in which the suit began and at least one defendant from which “significant relief” is sought is a citizen of the same state. The district court declined remand, declined to certify a class, and again rejected the case on the merits. The Seventh Circuit affirmed, stating that “Counsel should thank their lucky stars that the district court did not sanction them under 28 U.S.C. 1927 for filing a second suit rather than pursuing the first through appeal." View "Phillips v. Wellpoint Inc." on Justia Law

KDC had cash flow problems and, in 2004, hired Johnson. Johnson retained the law firm (GPM) of his acquaintance, Tenenbaum. GPM sent KDC an engagement letter that included conflict‐waiver language regarding Johnson and a company affiliated with Johnson. Johnson soon resigned and joined First Products. GPM resigned as KDC’s counsel. KDC filed for Chapter 11 bankruptcy. Its assets were purchased at auction by First Products. No other bids were received; the bankruptcy court approved the sale. The bankruptcy was later converted to a Chapter 7 liquidation proceeding. The bankruptcy trustee hired Sullivan as special counsel. Sullivan had filed a shareholder derivative action before KDC filed for bankruptcy, alleging that directors and officers of KDC had conspired to defraud the company of its intellectual property by driving KDC out of business and purchasing its assets at bargain prices. In 2010, a Wisconsin state judge entered judgment, finding some defendants, including Johnson, had engaged in a civil conspiracy to defraud KDC and steal its assets. In 2012, KDC, through its bankruptcy trustee, brought claims against GPM, alleging involvement in the scheme to defraud KDC orchestrated by Johnson. On summary judgment, the district court determined that the remaining claims were barred by the six‐year Wisconsin statute of limitations because KDC was on notice of GPM’s alleged fraud by 2006, when Sullivan received KDC’s client file. The Seventh Circuit affirmed. View "KDC Foods, Inc. v. Gray, Plant, Mooty, Mooty & Bennett, P.C." on Justia Law

Spencer stopped paying her mortgage in 2008. In Wisconsin state court foreclosure proceedings, Spencer’s attorney, Nora, adopted an “object-to-everything litigation strategy and buried the state court in a blizzard of motions.” While a hearing on a summary judgment motion was pending in state court, Nora removed the case to federal court. Finding no objectively reasonable basis for removal, the district court remanded the case and awarded attorney’s fees and costs to the lender, 28 U.S.C. 1447(c). The Seventh Circuit dismissed Spencer’s appeal as frivolous; the district court did not order her to pay anything. The court affirmed the award as to Spencer “because she has not offered even a colorable argument that removal was reasonable” and ordered Nora to show cause why she should not be sanctioned for litigating a frivolous appeal. View "PNC Bank, N.A. v. Spencer" on Justia Law

Plaintiff filed suit against Wyeth, alleging that she developed breast cancer after using Wyeth's's hormone therapy medication, Prempro. The Judicial Panel on Multidistrict Litigation transferred the case to the the Eastern District of Arkansas as part of the ongoing In re Prempro Products Liability Litigation. After the district court subsequently dismissed plaintiff's case for failure to respond to discovery orders, her attorney filed a Rule 60(b)(1) motion to set aside the dismissal. Plaintiff's attorney had failed to register for the Case Management/Electronic Case Files (CM-ECF) system and, consequently, did not receive electronic notices of the filings in plaintiff's case. The court affirmed the district court's denial of the Rule 60(b)(1) motion because the district court did not abuse its discretion where, on more than one occasion, the district court instructed all attorneys to register for the CM-ECF system and warned that those who did not would not receive electronic filing notices or hard copies of orders. View "Freeman v. Wyeth, et al." on Justia Law

Plaintiffs filed a putative class action alleging that defendants failed to provide necessary services for students with diabetes in California public schools. The parties subsequently entered into a settlement agreement and the district court retained limited jurisdiction to enforce the agreement. After the district court's jurisdiction had expired per the terms of the settlement agreement, plaintiffs filed a motion seeking attorneys' fees for monitoring defendants' compliance with the agreement. The district court denied the motion for lack of jurisdiction. The court concluded that the district court erred in failing to recognize the distinction between ancillary jurisdiction to enforce the settlement agreement and ancillary jurisdiction over an attorney's fees dispute. While the settlement agreement limited the district court's ancillary jurisdiction to enforce the terms of the parties' settlement, it did not affect the district court's ancillary jurisdiction over an attorneys' fees dispute. Thus, the district court has ancillary jurisdiction over plaintiffs' motion for attorneys' fees. The court reversed and remanded. View "K.C. v. Torlakson" on Justia Law

Davis retained Fenton to represent her in a home foreclosure proceeding. Davis later sued Fenton for malpractice. Davis claimed that, although she paid Fenton several thousand dollars, he did virtually nothing to help her and that he targeted her for inferior service based on her race, in violation of the Fair Housing Act, 42 U.S.C. 3601. That case is stayed pending arbitration. Fenton brought his own lawsuit in state court, against Davis’s lawyers: Dudley and Sidea, alleging that they intentionally spread false information about him to clients and business associates. Fenton also alleged that Sidea, who had previously worked at Fenton’s law office, had improperly obtained confidential information about Fenton’s clients and shared it with Dudley. The complaint claimed conversion, tortious interference with a business relationship, and defamation. Dudley and Sidea filed a notice of removal in federal court, citing the general removal statute, 28 U.S.C. 1441, and the civil rights removal statute, 28 U.S.C. 1443. Days later, despite the ongoing removal proceedings, the Cook County Court entered an ex parte preliminary injunction against Dudley and Sidea. The district court found that the case did not meet the removal requirements under either 28 U.S.C. 1441 or 1443 and remanded, The Seventh Circuit affirmed. View "Fenton v. Dudley" on Justia Law