Justia Civil Procedure Opinion Summaries

"This is a case of egregious attorney misconduct." Because of the cumulative effect of the attorney's misconduct, the Court of Appeal felt compelled to reverse the judgment she obtained on behalf of her client, Caltrans. "While Judge Di Cesare showed the patience of Job – usually a virtue in a judge – that patience here had the effect of favoring one side over the other. He allowed [the attorney] to emphasize irrelevant and inflammatory points concerning the plaintiff's character so often that he effectively gave CalTrans an unfair advantage." View "Martinez v. Dept. of Transportation" on Justia Law

Choice Hotels sued SBQI, its managers, and investors, for breach of a franchise agreement. The defendants did not answer the complaint. The court entered a default. One defendant, Chawla, an Illinois attorney, had represented the others. Other defendants asked Chawla to find a new attorney. They claimed that they had been unaware that their signatures were on the franchise agreement and that the signatures are forgeries. Johnson agreed to try to vacate the default, negotiate a settlement, and defend against the demand for damages. Johnson filed an appearance and took some steps, but did not answer the complaint or move to vacate the default, engage in discovery concerning damages, or reply to a summary judgment motion on damages. In emails, Johnson insisted that he was trying to settle the litigation. He did not return phone calls. The court set damages at $430,286.75 and entered final judgment. A new attorney moved to set aside the judgment more than a year after its entry, under Fed. R. Civ. P. 60(b)(6), which covers “any other reason that justifies relief” and requires “extraordinary circumstances.” The Seventh Circuit affirmed. The defendants must bear the consequences of their inaction. They were able to monitor the proceedings, but did not follow through. View "Choice Hotels Int'l Inc. v. Grover" on Justia Law

Moje, playing minor league hockey, lost an eye during a game, and sued Oakley, which made his visor, and the League. Instead of notifying its insurer, the League hired LoFaro. Oakley’s attorney called the League’s President, to ask why it had not answered the complaint. LoFaro claimed that an answer had been filed, but the docket did not reflect any filing. Moje moved for default. LoFaro did not respond, nor did he respond after the court entered the default and permitted Moje to prove damages. The court entered a final judgment of $800,000 against the League. After the League learned of collection efforts, it notified its insurer. A lawyer hired by the insurer unsuccessfully moved, under Fed. R. Civ. P. 60(b)(1) to set aside the judgment within six months of its entry. Rule 60(b)(1), allows relief on account of “mistake, inadvertence, surprise, or excusable neglect.” The Seventh Circuit affirmed. Abandoned clients who take reasonable steps to protect themselves can expect to have judgments reopened under Rule 60(b)(1), but the League is not in that category. Its remedy is against LoFaro. View "Moje v. Federal Hockey League LLC" on Justia Law

In 2010, Debra Hackett was seriously injured in an accident in Sacramento County in which a tractor and trailer owned by Silva Trucking, Inc. and driven by Elaine McDonold jackknifed and collided with the vehicle being driven by Hackett. In 2012, the Hacketts filed a personal injury action in Sacramento County against Silva Trucking and McDonold. The jury awarded the Hacketts $34.9 million in damages. Silva Trucking was insured by Carolina Casualty Insurance Company (CCIC), who retained the law firm Cholakian & Associates to provide a defense. Silva Trucking had an excess liability insurance policy with Lexington Insurance Company (LIC), who retained the law firm Lewis, Brisbois, Bisgaard & Smith, LLP (Lewis Brisbois) as counsel. In 2014, Silva Trucking and McDonold brought suit in Sacramento County against LIC, CCIC, Cholakian & Associates and individual attorneys Kevin Cholakian and Jennifer Kung (collectively Cholakian), and Lewis Brisbois and individual attorney Ralph Zappala (collectively Lewis Brisbois). As to LIC and CCIC, the complaint alleged bad faith and breach of contract. As to the law firms and attorneys, the complaint alleged legal malpractice. The gravamen of the complaint was that the insurers unreasonably refused to accept the policy limit demand when the insured’s liability was clear and damages were known to be in excess of the policy limit. The attorneys failed to advise their insurer clients to accept the demand and the consequences of failing to do so, and failed to advise Silva Trucking and McDonold of their need for personal counsel. LIC and CCIC responded with demurrers. Lewis Brisbois answered with a general denial and asserted 22 affirmative defenses. Under Code of Civil Procedure section 396b, subdivision (a), where an action has been filed in the “wrong venue,” a defendant may move to transfer the case to the “proper court for the trial thereof.” In such a case, “if an answer is filed,” the court may consider opposition to the motion to transfer and may retain the action in the county where filed to promote the convenience of witnesses or the ends of justice. The question this case presented for the Court of Appeal's review was whether, in a multi-defendant case, an answer must be filed by all defendants before the court may consider opposition to the motion to transfer venue. The Court concluded the answer was yes. In this case, the trial court considered opposition to the motion before all defendants had answered the complaint. Accordingly, the Court issued a preemptory writ of mandate directing the trial court to vacate its order denying the motion to transfer and to issue a new order granting the motion. View "Cholakian & Assoc. v. Super. Ct." on Justia Law

Plaintiffs were represented by defendant attorneys in an action against State Farm arising out of the 1994 Northridge earthquake. Court-appointed retired judges presided over a 1997 aggregate settlement. In 2012, one of the plaintiffs conducted a random sampling of other plaintiffs’ awards in the action, which, they claimed, revealed that the defendants had not properly disbursed or accounted for the settlement funds and had concealed this conduct from plaintiffs. Plaintiffs sought damages for failure to obtain their informed consent to an aggregate settlement and misappropriation of and failure to account for the settlement funds. The trial court dismissed, finding the claims based on speculation and barred by the statute of limitations. The court of appeal affirmed, rejecting arguments that the statute of limitations had not run under Probate Code section 16460 because they had no notice of wrongdoing and that actions for violations of Business and Professions Code section 6091 in failing to provide an accounting are not barred because their action was filed within one year of failure to comply with the statute. Where there are facts sufficient to put one on inquiry notice, the fraud statute of limitations starts running even when the defendant is a fiduciary. View "Britton v. Girardi" on Justia Law

The Georgia Supreme Court granted certiorari to the Court of Appeals in “Fisher v. Gala,” (754 SE2d 160 (2014)) to determine if that the appellate court properly held that, in a professional malpractice action, when a plaintiff files a complaint accompanied by an affidavit from a person not competent to testify as an expert in the action, OCGA 9-11-9.1 (e) permits the plaintiff to cure this defect by filing an amended complaint with the affidavit of a second, competent expert. Finding that the Court of Appeals was correct in holding that the pleading could be so amended, the Supreme Court affirmed the Court of Appeals’ judgment. View "Gala v. Fisher" on Justia Law

In 2005 E3’s predecessor began construction of an ethanol plant, to be powered, in part, by methane, and contracted with Biothane for a boiler system. Biothane, an expert in systems integration but not in boilers specifically, subcontracted with PEI to install and integrate the boilers. Biothane retained overall responsibility. Both are engineering companies. In 2007, PEI’s engineer repeatedly tried and failed to light the main flame of one of the boilers. The repeated attempts caused gas to build up and explode. E3 claims that the boiler never worked properly afterward and that the plant failed as a result. The plant’s owners eventually reorganized in bankruptcy. In 2011 (3 years and 364 days after the explosion) E3 sued, alleging torts against both companies and breach of contract against Biothane. The district court granted defendants summary judgment, finding all of E3’s claims time-barred under Neb. Rev. Stat. 25-222, Nebraska’s two-year limitations period for actions based on professional negligence. The Eighth Circuit affirmed. Regardless of whether the chain of events ultimately led to the breach of a contract, E3 still sued Biothane “for an action performed in a professional capacity.” View "E3 Biofuels, LLC v. Biothane, LLC" on Justia Law

The district court dismissed a suit brought by Sanderson, individually and on behalf of all others similarly situated, alleging that auditors (defendants) committed securities fraud by falsely representing that they performed their audits of Advanced Battery Technologies in accordance with professional standards and that the company’s filings accurately reflected its financial condition from the 2007 through the 2010 fiscal years. The court found that the complaint failed adequately to plead scienter as required by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. 78u‐4. Sanderson sought to correct these deficiencies by moving to file an amended complaint. The court denied the motion, concluding that even the new allegations failed to “rise to the level of recklessness.” The Second Circuit affirmed, finding that the factual allegations did not give rise to a strong inference of either fraudulent intent or conscious recklessness, rather than mere negligence. View "In re: Advanced Battery Techs., Inc." on Justia Law

One Hope contracts with the Illinois Department of Children and Family Services to provide services with the objective of keeping troubled families together. Seven-month-old Marshana died while her family participated in One Hope’s program. The Cook County public guardian, as administrator of Marshana’s estate, filed a wrongful death case to recover damages against One Hope and Marshana’s mother,alleging that One Hope failed to protect Marshana from abuse or neglect and should not have allowed Marshana to be returned to her mother because of her unfavorable history and failure to complete parenting classes. Attorneys for the Public Guardian deposed the executive director of One Hope, who revealed the existence of a “Priority Review” report regarding Marshana’s case. The priority review process considers whether One Hope’s services were professionally sound, identifies “gaps in service delivery” and evaluates “whether certain outcomes have been successful or unsuccessful.” The Public Guardian moved to compel production of the report. One Hope argued that the report was protected from disclosure by the self-critical analysis privilege. The circuit court determined that the privilege did not apply. The appellate court and Illinois Supreme Court affirmed. Relevant legislative acts and omissions evince a public policy determination by the General Assembly that the type of information sought in discovery here is not subject to a “self-critical analysis privilege.” View "Harris v. One Hope United, Inc." on Justia Law

In 1999, Christeson was convicted of three counts of capital murder and sentenced to death. The Missouri Supreme Court affirmed Christeson’s conviction and sentence and denial of his post-conviction motion for relief. Under the one-year limitations period imposed by the Antiterrorism and Effective Death Penalty Act, 28 U. S. C. 244(d)(1), Christeson’s federal habeas petition was due on April 10, 2005. Nine months before that deadline, the court appointed attorneys Horwitz and Butts to represent Christeson, 18 U. S. C. 599(a)(2). The attorneys subsequently acknowledged that they failed to meet with Christeson until six weeks after his petition was due. There is no evidence that they communicated with him at all. They finally filed the petition 117 days late. The district court dismissed; the Eighth Circuit denied a certificate of appealability. Christeson, who has severe cognitive disabilities, relied entirely on his attorneys, and may not have known of the dismissal. About seven years later, the attorneys contacted attorneys Merrigan and Perkovich to discuss Christeson’s case. Christeson’s only hope for merits review was to move under FRCP60(b) to reopen final judgment on the ground that AEDPA’s statute of limitations should have been equitably tolled. Horwitz and Butts would not file that motion, premised on their own malfeasance. In 2014, Merrigan and Perkovich unsuccessfully moved to substitute counsel. The Eighth Circuit dismissed, reasoning that they were not authorized to file on Christeson’s behalf. The Missouri Supreme Court set an October 29, 2014 execution date. The district court denied a second motion as untimely, stating that Horwitz and Butts had not “abandoned” Christeson, and reasoning that allowing the motion would permit “‘abusive’” delays in capital cases. The Eighth Circuit affirmed. The Supreme Court stayed execution and reversed, stating that the denials contravened its 2012 decision, Martel v. Clair, concerning the “interests of justice” standard, and noting the obvious conflict of interest with respect to the original attorneys. View "Christeson v. Roper" on Justia Law