California Appellate Law Blog : California Appellate Lawyer & Attorney : Archer Norris Law Firm : Trial, Business, Torts : Sacramento, Bay Area, Los Angeles, California

The Court of Appeal for the Second Appellate District, Division Seven, issued an interesting decision this week regarding the importance of insurance adjusters attending mandatory settlement conferences and other court-ordered alternative dispute resolution dates.

Vidrio v. Hernandez 09 C.D.O.S. 4465 concerned a personal injury action by Vidrio against Hernandez (insured by Mercury) arising out of an automobile accident. The matter was mediated without resolution, and Hernandez’s counsel subsequently served Vidrio and another plaintiff with Code of Civil Procedure section 998 offers of $1,000 each.

The court then ordered the parties to participate in a mandatory settlement conference. Local court rules required that an adjuster with “full authority” to settle the case also attend. Mercury complied. However, in response to Vidrio’s offer to settle for $30,000, Hernandez and Mercury refused to increase their offer from the section 998 offers previously served.

The trial judge was incensed, and at a subsequent order to show cause hearing found that Mercury had failed to participate in the mandatory settlement conference in good faith. It sanctioned Mercury $1,500 payable to the court and $357.50 payable to Vidrio’s counsel.

The Court of Appeal overturned the sanctions award. It found that the only authority for the imposition of sanctions against a non-party insurance carrier came from Local Rule 2.30, allowing the court to sanction a party or non-party required to attend a mandatory settlement conference for an unexcused failure to do so. However, the Court of Appeal noted that nothing in that rule or any other applicable statute provided a proper basis for awarding sanctions for the failure to “participate meaningfully in settlement negotiations.” The Court of Appeal observed that “Hernandez filed an appropriate settlement conference statement; her lawyer and Mercury attended the conference and participated in it. While the trial court’s frustration at the parties’ lack of movement is understandable, no more was required.”

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In a recent article in The National Law Journal (reprinted in The Recorder on April 20, 2009), Michael P. Shea discussed the merits of permitting appellate review of orders denying claims of attorney-client privilege as immediately appealable collateral orders. 

Mr. Shea makes a compelling case for this change, noting that certain federal courts already permit it; alternative remedies are ineffective (or worse); and no onslaught of appeals should result from a the change.

Read more here.

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     I am a big fan of SPOGG, mostly because I teach legal research and writing courses to paralegal students on Wednesday nights, but also because I’m a little bit of a grammar nerd. If you are the red-pen-wielding type, you will be a fan of SPOGG, too.

     Each quarter that I teach, I (vainly) try to impress upon my students the importance of understanding and following the rules of grammar in their legal writing by illustrating the consequences of not doing so. Generally, this lecture is received by a fair amount of whining, eye-rolling and an I-already-know-this exasperation. The complaining is then followed by papers plagued with sentence fragments and comma splices, a failure of subject-verb agreement, an obvious attempt to spell-check followed by an equally obvious failure to proofread, and a sometimes hilarious attempt to “over-write” that ends in the misuse of words the student cannot possibly have consulted a dictionary for definition before using.

     So, I decided I needed some back-up. If my students did not believe me, perhaps they would believe the learned justices in the appellate courts who had taken an attorney or two to task for sloppy brief writing. 

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 The Court of Appeal for the First Appellate District, Division Three, recently published its decision in Gundogdu v. King Mai, Inc. (2009) 171 Cal.App.4th 310. King Mai, Inc. was represented on appeal by Archer Norris's Ric Blumhardt and Allan Isbell and Lorber, Greenfield & Polito, LLP's Ron U. Lunski. Together, they successfully convinced the Court of Appeal to affirm summary judgment for King Mai, Inc. on the grounds that the Gundogdus’ claims were barred by the ten-year statute of limitation in Code of Civil Procedure section 337.15 as applied to a claim for defective construction of residential property.

In 1995, King Mai constructed a home, which it sold to the Gundogdus in 1997, sixteen months after completion of construction. The Gundogdus subsequently brought an action against King Mai for negligence and breach of implied warranty arising from alleged defects in the home’s original construction. The action was brought more than ten years after construction of the home, but less than ten years after it was sold to the Gundogdus by King Mai. King Mai successfully moved for summary judgment on the ground that the Gundogdus’ action was completely barred by section 337.15. 

On appeal, the Gundogdus argued that the ten-year statute of limitation had been equitably tolled pursuant to section 337.15, subdivision (e), during the sixteen-month period of King Mai’s passive ownership of the property and completion of construction.

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I am happy to introduce myself as a new contributing member of Archer Norris's California Appellate Law Blog team.  I am a senior associate with Archer Norris, and my practice emphasizes insurance coverage law in both the trial and appellate contexts.  I am excited to bring my perspective to the appellate law issues discussed in this blog, and I look forward to your comments and contributions.

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On Tuesday, Judge Kozinski of the Ninth Circuit Court of Appeals (do I really need to clarify that) sat down with David Lat, Founder of Above the Law for a conversation about collegiality on the court and some interesting tips on oral argument.

The podcast of their conversation is available here.  Or you can read a summary and excerpts here.

Following in the vein of yesterday's post with Scalia's comments on writing amicus briefs, Judge Kozinski offered an interesting tidbit of advice for oral argument -- Apparently judges don't appreciate having their own opinions cited back to them.  Who knew?

Lat expressed surprise when Kozinski offered a practice tip for oral argument: never point out that the opinion you are citing was written by a member of the panel.

While the moderator suggested that judges might “like being buttered up,” Kozinski offered that he could not think of a single federal judge who enjoys having his own opinions cited to him.

“It’s not just gauche,” the judge said. “It looks like you’re trying to trap me with my own opinion.”

The only thing worse, he quipped, would be “telling Willie Fletcher that ‘this is something your mom said.’” Ninth Circuit Judge William Fletcher, a Clinton appointee, is the son of Senior Judge Betty B. Fletcher, a member of the court since 1979.

Kudos to ATL for the heads up.

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This is a brief, and albeit random bit of information, but I was going through an old notebook looking for an outline and found a quote from Justice Scalia on amicus briefs that made me chuckle.  This is from a seminar he gave with Bryan Garner last summer in D.C. on their book Making Your Case:  The Art of Persuading Judges.

"Don't re-plow the ground that you expect the parties to plow unless you expect the parties to plow with a particularly dull plow." 

Now say that five times, quickly.

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The Ninth Circuit is now offering an RSS feed for all new opinions.  You don't get the digest version that you would by using Callaw or Westlaw or another similar service, but it gives you instant access to the decisions.

Another good source for tracking opinions from the 9th is the Ninth Circuit blog put out by several federal public defenders.  More of the focus is on criminal cases, but they write good, succinct analysis of the opinions.

Finally, the Ninth Circuit has also been posting links to files of oral arguments for some time.  Interesting when you've got the time or inclination.

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In Compulink Managements Center, Inc. v. St. Paul Fire and Marine Ins. Co., et al California’s Second District ruled that, regardless of Compulink’s claims for bad-faith, the parties’ dispute over the reasonableness of independent counsel’s fees must be arbitrated pursuant to Cal. Civil Code Section 2860.

Not a very glamorous subject, I know, but an important decision for many litigators wanting to get paid by their client’s insurers. 

Civil Code Section 2860 mandates arbitration of any dispute over the reasonableness of independent counsel’s attorney’s fees that must be paid by an insurer. Here, the court clarifies whether, when a coverage action is brought alleging numerous and various claims against the carrier, only one of which happens to be a dispute over the reasonable of independent counsel’s fees, the arbitration of the fee issue is still required. Their answer was “yes”.

The trial court had denied St. Paul’s petition to compel arbitration, stating that Compulink’s bad faith claims took the action beyond the purview of Section 2860. The Second District disagreed, finding that the plain language of the statute required arbitration of any fee dispute and did not provide for an exception in cases where bad-faith allegations were made by the insured.

The opinion is pretty straightforward. What the opinion fails to address, however, are the practical implications of such a ruling. For instance, what about where the insured claims that not only is he owed fees paid to independent counsel, which haven’t been paid by the insurer at all, but that the insurer is also liable for bad-faith.

Can you try such a case without bifurcating the duty to defend and the bad-faith claims? Can the arbitrator determine the reasonableness of the fees before the court determines whether the insurer had a duty to defend in the first place? Why would you want him/her to? And to throw another kink into the process, the court made clear that the mandatory arbitration of Section 2860 applies only to attorney’s fees, not all defense fees and costs (e.g. expert fees).

The legislature intended the mandatory arbitration provision of Civil Code 2860 to prevent the state’s judicial system from bearing the cost of fights over the reasonable of attorneys’ fees -- An understandable and prudent motive. Yet, as in many things, the practical implications may achieve quite the opposite effect.

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