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

On April 17, 2009, the California Court of Appeal for the Fourth Appellate District, Division Three, issued its opinion in Century 21 Chamberlain & Associates v. Haberman, 09 C.D.O.S. 4609.

Century 21 filed an action against Haberman and Pacific West Association of Realtors (PWAR), arising from the sale of Haberman’s house. Century 21 asserted two causes of action: (1) account stated, arising from Haberman’s failure to pay on a loan secured by a deed of trust; and (2) declaratory relief, arising from Haberman and PWAR’s insistence that the parties arbitrate Century 21’s claims.

In response to Century 21’s complaint, Haberman filed an anti-SLAPP motion to strike the complaint, arguing that Century 21’s causes of action arose from Haberman’s constitutionally protected activity. The trial court denied Haberman’s motion, and the Court of Appeal affirmed.

The Court found that Century 21’s cause of action for account stated could not arise from protected activity, because it necessarily arose from Haberman’s failure to repay the loan as agreed. It also found that the cause of action for declaratory relief did not arise from protected activity. Although the cause of action arose from Haberman’s arbitration demand – arguably an exercise of free speech – the arbitration demand itself did not fit any of the four categories of protected activity enumerated in Code of Civil Procedure section 425.16. Private arbitration is not a judicial proceeding, but an alternative to it. It is also not an “official proceeding authorized by law”, because it is not subject to administrative mandate nor is it required by statute.  Finally, a demand for private arbitration is neither a public issue nor an issue of public interest.

As the Court noted, “It would be anomalous if the anti-SLAPP statute could be used to strike a declaratory relief cause of action seeking to avoid arbitration. Generally, the court must determine whether a dispute is subject to contractual arbitration, unless the parties clearly and unmistakably agree otherwise. [Citations.] It would provide cold comfort to parties resisting arbitration to recognize their right to a judicial determination of arbitrability, yet strike their means for obtaining that determination before arbitration.”

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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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