Goin Round in Circles

A recurring theme is that collectively speaking, lawyers often make and evaluate Code of Civil Procedure section 998 offers without a complete understanding of how the statute operates.  That knowledge gap is a little scary. 

But before you conclude I am talking down to trial lawyers (and many have heard me admire how trial lawyers react in real time and keep all those plates in the air), check this out: judges sometimes get 998 offers wrong too.  And think about this – if anyone sees 998 offers in operation the most – it’s the civil trial court judges.  After all, they have the robust caseloads and are more apt to regularly deal with 998 offers.

In preparing for the upcoming 2011 MCLE Spectacular presentation, I came across a splendid example of how section 998 trips up lawyers and sometimes judges alike.  The case is Warfield v. Chandler 2011 Cal.App. Unpub. LEXIS 4024.  Warfield has a lot to offer.

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Frivolity

What's that old saying that a good lawyer can argue just about anything?  While that may be true, a recent decision by the Sixth District Court of Appeal demonstrates that some arguments are better left not taken.  Sometimes it's probably better to walk away. 

But if taken, a proper record should be designated, or what follows could be quite, well, unpalatable.  For failure to properly perfect the record on appeal can be viewed as evidence that the appeal is frivolous.  And if the Court of Appeal finds the appeal frivolous, it can award sanctions in the form of respondent's attorney fees and fines paid to the court.  That's exactly what happened in Foust v. San Jose Construction Companywhere appellant was ordered to pay $15,000 in sanctions. 

What went wrong?

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In Search Of

Here's a reminder about the appellate lawyer's obligation to tie legal arguments to the record.  In addition, every now and then you run across what appears to be a little judicial jab in an appellate opinion:

"Under the circumstances, [Plaintiff] has not met his burden of showing abuse of discretion.  Each appellate brief must 'support any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears.'  (Citation)  'The reviewing court is not required to make an independent, unassisted study of the record in search of error or grounds to support the judgment.  It is entitled to the assistance of counsel.'  (Citation)  'It is the duty of counsel to refer the reviewing court to the portion of the record which supports appellant's contentions on appeal.  If no citation is furnished on a particular point, the court may treat it as waived.'  (Citation)  Further, [Plaintiff] has already filed three complaints without being able to state a single cause of action."  (Durrell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1371-1372.)

Okay, so maybe more than just a little jab.

The Right Words

Speaking of Code of Civil Procedure section 998 offers, another decision came out on May 25, 2011.  It is interesting because one would think that the issue had already been covered by a published opinion, but apparently not.  The case is Puerta v. Torres, 2011 Cal.App. LEXIS 649.  And it holds, simply enough, that if a 998 offer lacks a place for the offeree to accept by signing, the offer is invalid. 

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Magic Words

A recent appellate decision is notable for two reasons.  First, it has to be one of the shortest published opinions on record -- the text fits on one page.  Second, it holds that when a Code of Civil Procedure section 998 offer includes the phrase, "each side to bear their own costs," the word "costs" includes any attorney fees available to the offeree as a prevailing party.  The case is Martinez v. Los Angeles County Metropolitan Transportation Authority 2011 Cal.App. LEXIS 620 (2d Dist.).  

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Remand Diplomacy

Ever notice how the appellate courts provide "guidance" to the lower courts on remand?  You know what I mean, "we take no position" and "while the lower court is free to revisit" and so on.  Of course, usually followed by a magnificent qualifier, that says "but" in capital letters.  Here's a gem:

Because we are vacating the district court's Rule 11 orders on other legal grounds, we express no opinion at this stage about the particular reasonableness of any fees the district court elected to award Mattel.  We do, however, encourage the district court on remand to ensure that the time spent by Mattel's attorneys was reasonably and appropriately spent in relation to both the patent frivolousness of Christian's complaint and the services directly caused by the sanctionable conduct. FN 12

FN 12: For example, because the action was frivolous on its face, why would Mattel's attorneys need to spend 700 hours . . . for the summary judgment motion and response? . . . Mattel's theory was stunningly simple and required little explication . . .  Christian v. Mattel, 286 F.3d 1118, 1131-32, FN 12 (9th Cir. 2002).

Don't you love it?!  We express no opinion but see our footnote for our actual opinion.  And oh, by the way, if you (district court) fail to correctly read our "no opinion" you will be reversed.  Again!

Remand diplomacy. 

Wrinkles

Code of Civil Procedure section 998 offers rest upon a simple concept.  As one Court of Appeal put it, 998 offers "encourage settlement by providing a strong financial disincentive to a party--whether it be a plaintiff or a defendant--who fails to achieve a better result than that party could have achieved by accepting [a 998] settlement offer. (This is the stick. The carrot is that by awarding costs to the putative settler the statute provides a financial incentive to make reasonable settlement offers.)"  (Bank of San Pedro v. Superior Court (1992) 3 Cal. 4th 797, 804.)  But if the carrot and stick is a simple concept, it's the actual business that can be complicated. 

The starting point is a valid offer that a trial court finds to be "reasonable and made in good faith."  (See, e.g., Nelson v. Anderson (1992) 72 Cal.App.4th 111, 134.)  A recent Court of Appeal decision aptly demonstrates a wrinkle--the tricky business of serving a 998 offer with a complaint.  Wait a minute, can you do that?  The answer is, "it depends."

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It Gets Tricky

So the client is on the wrong end of a judgment.  And at the very end of the judgment, the court says the other side "shall recover . . . attorney fees and costs of suit."  The judgment is entered and notice of entry is served.  Counsel timely appeals.  The notice of appeal states that the appeal is a challenge to the fee award. 

Counsel chooses to use an appellant's appendix, saving client some record preparation costs, and starts drafting the opening brief.  In the meantime, at the trial court, the issue of fees is resolved after the usual briefing and a hearing.  An order stating the amount of fees client has to pay is entered.  Counsel makes sure to include that order in the appendix.  The opening brief is filed.  Confident in getting the fee award undone, counsel waits for the response brief.

But what arrives is a motion to dismiss the appeal.  A bead of sweat emerges on counsel's forehead.  Counsel grabs the appendix, checks the notice of entry date, compares the notice of appeal date, it's well within 60 days.  Everything will be okay.

Or will it?

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SLAPPED Around

Most cases, if they have any interest to us at all, are interesting because of what they say.  After all, the holding gives us insights into how a particular statute or rule applies to a given set of facts.  Sometimes, it's the facts that draw our interest, simply because the facts are so out of the ordinary.  And then there are those cases that are interesting by what they don't say.  It's the unanswered questions they raise - questions that are more entertaining and curious than a hundred ground-breaking decisions.

A recent decision by the Fourth District is one of the latter.  Baharian-Mehr v. Smith 2010 Cal.App. LEXIS 1779.  There, the appellate court affirms the dismissal of an anti-SLAPP motion and an award of $1,500 in attorney fees, describing it as "one of the weakest anti-SLAPP motions this court has reviewed in some time, which is not an inconsiderable achievement."  It doesn't exactly give counsel a gold star when it later adds, "Although Smith's [appellate] briefing is an improvement over his original motion in the trial court, his legal arguments are equally devoid of merit, and therefore, attorney fees [on the appeal] are appropriate."

But more intriguing are the unspoken premises and unanswered questions.  Who appeals an award of attorney fees when the award is only $1,500?  Did counsel tell the client that losing the appeal would mean, um, more attorney fees?  That opposing counsel's fees on the appeal would far outpace the $1,500 at issue?  And who takes on the appeal knowing the award is so small?  What is counsel's hourly rate?  I mean, creating the shell document for the appeal will pretty much burn through the $1,500 right?  Okay, add the notice of appeal, the case information statement, designate the record.  Are we there yet?

But here's the clincher; maybe it was barter.  Smith was in the adult entertainment business.  And I'm pretty sure that doesn't mean baseball.  See?  In this one, it's the unspoken premises and the unanswered questions that make it memorable!

Charting the (Stormy) Public Works Water

California’s economic downturn means that public works projects are fewer in number and smaller in scale as local and state agencies grapple with reduced funding. As a result, public works bidding is more fiercely contested than ever. A recent decision provides a good example. (Schram Construction Inc. v. The Regents of the University of California (2010) 187 Cal.App.4th 1040.)

In Schram, the University sought bids for the design and construction of the mechanical, electrical and plumbing work for UCSF Medical Center at Mission Bay. The bidding was structured around multiple packages and trades. The University used the “best value” method, a modified approach awarding the bid to the bidder with the best ratio between bid price and best-value-questionnaire score. (See Public Contracts Code § 10506.5(g).) The idea is that this method incorporates and weighs factors other than the bid price, resulting in the best contractor being selected from among the lowest bidders. 

After the first set of bids were received and reviewed, the University decided that the bidding should be redone. In addition to the original six bid packages, the University invited bids on three alternative packages. It also changed the weights given to various factors used to calculate the best value scores. Schram Construction Inc. (SCI) initially bid on just two independent bid packages. Later, SCI did not bid on any of the new, alternative packages, choosing instead to bid on three of the separate bid packages. Two of its separate bids, if combined, covered one of the alternative bid packages: the HVAC (heating, ventilating and air conditioning) and plumbing for the Energy Center and Outpatient Building. But the University awarded that work to another bidder on the grounds that SCI did not bid the alternative package. As a result, SCI was not even considered for that work.

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The Ticking Clock

Failure to timely file a notice of appeal is fatal.  There is no relief.  Sixty days is a long time.  But is the clock ticking?  When did it start to run?  When does it run out?  Are you sure?

Under California Rules of Court,rule 8.104, the clock starts ticking when either of two things happens: the clerk mails or a party serves - a document entitled “notice of entry” of judgment or a file-stamped copy of the judgment.  If it is the clerk, the document must show the date it was mailed.  If a party, the document must be accompanied by a proof of service.  The 60-day deadline starts running from the mail (clerk)/service (party) date.  But if neither the clerk mails nor the party serves notice, a 180-day “outer limit” is allowed to file the notice of appeal.  Warning, it is rare that no notice occurs, so proceed with extreme caution.

The 60 day time limit is also subject to extension under rule 8.108.  Under that rule, timely and valid motions for new trial, to vacate judgment, JNOV, and to reconsider an appealable order, can result in extensions.  But if there is a procedural minefield, this is the place.  And the mines explode with surprising frequency.  When they do, there are no survivors.

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Where to Start

So you are thinking of appealing.  In California’s state courts, initiating an appeal requires a final judgment or an appealable order.  An order is appealable if either a statute expressly says so or it carries the same effect as a final judgment.  Hmnn, getting complicated already.  A good place to start is Code of Civil Procedure section 904.1.  Listed there, for example, is an order granting a new trial or denying a JNOV motion.  So is an order granting or denying an injunction.  So too, an order granting or denying an anti-SLAPP motion.  But a preliminary order that is followed by a final judgment is not an appealable order. 

The difference between a final judgment and an order that is not appealable can seem slight.  For example, an order granting a motion for summary judgment or sustaining a demurrer without leave to amend may look and sound final to the losing party, but is not an appealable order.  The ensuing judgment disposing of the action, however, is appealable.  Likewise, an order denying summary judgment is not directly appealable, but may be appealed from the final judgment.  (Waller v. TJD Inc. (1993) 12 Cal.App.4th 830, 836.)  But be careful, given the subsequent trial on the merits, a writ should be considered in order to avoid the denial of summary judgment being viewed as harmless error when the appeal is finally taken.  (Gackstetter v. Frawley (2006) 135 Cal.App.4th 1257, 1269-1270.)            

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Windmill Tilting?

To the uninitiated, oral argument is the denouement of every appeal; the moment when the great appellate orators clash and the appellate court considers how to rule.  But for those that have been around the appellate block more than once or twice, loss of innocence is discovering that the appellate court has a draft opinion already written before the oral argument.  In September 9th's Daily Journal, professor and appellate practitioner Myron Moskovitz had an intriguing guest column called "Abolish Oral Argument?"  In it, Moskovitz, all-around good guy and lover of things appellate, ruminated on the impacts of the "90 day rule" in California's appellate courts. 

Upon submission of a case (at the conclusion of oral argument), the court has 90 days to issue an opinion, or else the justices don't get paid.  Yep - no pay.  Now just think if your paychecks were subject to something like that!  That could be a pretty effective form of incentive.  At the Court of Appeal, it means that as appellant's counsel approaches the podium, the court has already made up its mind.  As Moskovitz puts it, "oral argument in most of California's appellate courts is indeed an 'empty ritual'."  As a justice at the First District told me only half-jokingly, "Sometimes we'd like to hand the lawyers the draft opinion as they are walking away from the podium."

For oral argument lovers, and I am included in that group, the situation is very different in the Ninth Circuit.  The circuit judges are not boxed in by a 90 day rule, and as a result, oral arguments tend to be hotter.  (Admittedly, any oral argument with live human beings could be hotter than some state appellate court oral arguments, but that's not the "hot" I am referring to.)  At the Ninth Circuit, all 3 members of the panel tend to be more interested, ask more questions on the law and the facts, and both parties tend to receive active questioning.  While the panel may have an idea where they are headed, there is still plenty of time to come to a conclusion.  And so they fire away.

I'll take an oral argument in the Ninth Circuit any time. 

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Doing CRAC

As an adjunct professor, I tend to remember that old saw about those that can, those that can't, and which of the two are teachers.  It's a little scary.  Between avoiding being in the wrong half of that equation, and wondering what the students might ask me next, there is plenty of incentive to try hard to stay sharp and also, practice what I preach.  Avoidance of the expression, "do as I say, not as I do" comes to mind.  It's with no small trepidation that you look upon the sea of faces waiting for you to impart wisdom.  Or something.

As lawyers, a frequent lament is about the poor quality of written briefs (never our own, of course).  We sometimes see them in our own cases, filed by our opponents.  And ask any trial or appellate judge at the next MCLE seminar you attend, you'll hear the frustration of a difficult job for shorthanded and overworked courts, exacerbated by poorly written briefs.

Let's face it, between discovery squabbles, pre/post-trial motions, mediation and trial briefs, 90% of what we do is write.  And we must do it (collectively speaking) fairly poorly.  Otherwise, how do you explain the popularity and success of brief writing gurus like Bryan Garner?  His MCLEs are not cheap.  They are also very popular.

In law school, we are taught to IRAC during our first semester and to think about legal writing from that framework.  But when it comes to writing the legal argument sections of briefs, doing CRAC is even better.  So whether you are trying to stay one step ahead of your opponents (or those hungry lawyers below you on the firm totem pole) or just been meaning to take a hard look at your own briefs, doing CRAC is a habit that is actually good for you.

Here's how: 

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No More Kicking and Screaming

Mercifully, the Supreme Court has ended the summary judgment evidence ruling waiver debate. The waiver issue arose out of Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, Ann M. v. Pacific Plaza Shopping Center] (1993) 6 Cal.4th 666 and Sharon P. v. Arman Ltd. (1999) 21 Cal.4th 1181. Last week, in Reid v. Google Inc. 2010 Cal. LEXIS 7544, the Supreme Court held that as long as evidence objections are made in writing or orally at the hearing, trial court failure to rule on them does not result in waiver on appeal. Amen.

In Biljac, plaintiffs filed voluminous evidence objections opposing summary judgment. The trial court refused to make formal rulings, calling such work “a horrendous, incredibly time-consuming task.” The First District held that express evidentiary rulings aren’t necessary because review is de novo, and “the parties remain free to press their admissibility arguments on appeal.” Since then, trial courts often refused to make express rulings, instead citing Biljac and stating that only competent and admissible evidence was considered.

But the real menace was waiver of the objections on appeal. For Biljac was soon shackled sub silentio by the Supreme Court in Ann M. There, ruling without any discussion of Biljac, the high court held that “because counsel failed to obtain rulings, the objections are waived and are not preserved for appeal.” Sharon P. followed, confirming the waiver principle.  But going forward, some appellate courts strictly adhered to the waiver rule, some did not.

Reid holds that "the trial court’s failure to rule expressly on any of Google’s evidentiary objections did not waive them on appeal." Reid concludes that “written evidentiary objections made [before] the hearing, as well as oral objections made at the hearing are deemed made ‘at the hearing’ [for purposes of CCP section 437c (b) (5)] …so that either method of objection avoids waiver.” And, Reid emphasized, “trial court[s] must rule expressly on those objections.”

What about the lawyers? As one appellate court put it, all too often, “litigants file blunderbuss objections to virtually every item of evidence submitted.” (Demps v. San Francisco Housing Authority (1st Dist. 2007) 149 Cal.App.4th 564, fn. 6.) As another put it, filing “innumerable objections…as part of the all-out artillery exchange that summary judgment has become” should be avoided. (Mamou v. Trendwest Resorts Inc. (6th Dist. 2008) 165 Cal.App.4th 686, 711-712.) Instead, as amicus curiae California Academy of Appellate Lawyers put it in Reid, “facilitate [meaningful rulings] by choosing [your] battles wisely and only objecting to evidence when it matters.”

Reid eradicates a waiver penalty that was particularly unfair given that, “the objector must yell and scream and stamp his feet…to [try to] force the trial court to rule on those objections.” (Gallant v. City of Carson (2005) 128 Cal.App.4th 705, 714 (Vogel J., dissenting).) Choose evidence objections carefully, submit them in proper written form and focus the trial court on them during the hearing. If counsel takes this approach, no kicking and screaming in the courtroom should be necessary. And perhaps, no hair pulling, in chambers.

 

Not Just Monday Morning

One of the jests that appellate lawyers often hear is that they are nothing more than Monday morning quarterbacks. After all, once the case is on appeal, the record is set and what could be called legal archaeology begins. Appellate lawyers sift the record for prejudicial error, erroneous legal interpretation, abuse of discretion, invited error, waiver, the absence of reversible error and so on. But forward thinking trial lawyers consult with appellate counsel during litigation. There are several reasons why this is good strategy.

Early consultation with appellate counsel can result in identification of alternative theories for prosecution or defense of the case. It can sharpen the focus on key factual issues needed at the summary judgment stage. Having appellate counsel assist early on can mean a more well rounded evaluation of the chances of success. It can also mean the application of specialized focus in mediation briefs, summary judgment and in limine motions, jury instructions. That's because appellate lawyers are often steeped in extremely nuanced areas of law and the latest high court pronouncements re the same. Incorporating such expertise into key briefs makes them much more effective. In a very real way, appellate counsel make an effective trial weapon.

And if there was ever a minefield for potential reversible error, waiver and other disasters, it's the 90 days after trial. Here, appellate counsel add signficant value to the prosecution or defense of key post trial motions. Whether bench trial or jury verdict, post-trial procedure is deep water. Better to have a seasoned navigator on board.

Some trial counsel are understandably reluctant to involve appellate counsel for the same reason they are reluctant to have co-counsel; exposure to second-guessing and criticism. But the effective appellate advocate is a team player, ready to consult on an as-needed basis and working to support, not supplant, trial counsel. Together, trial and appellate counsel form a formidable team. And after the trial dust settles, the archaeology is bound to turn up more treasure.

 

Attorney-Client Privilege Rulings to Become Appealable Collateral Orders?

 

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.

To Reply, Or Not to Reply

Mike McKee at the Recorder wrote an interesting article yesterday about the reply brief on appeal.  Apparently, it is a controversial document, with some judges bemoaning another fifteen pages reiterating appellant's arguments and others claiming that it is the first document they read.

The article talks briefly about Justice Scalia's thoughts, offered in response to questions on his recent book tour.  At the seminar in D.C. last week with he and legal writing guru Bryan Garner, Justice Scalia spoke at some length about the danger of not anticipating judges who are "retro-readers" -- who read the briefs in the opposite order in which they are filed.  As the Recorder article confirms, many justices and judges work from back to front when reading briefs, believing that it is not until the reply brief that the "real" issues and controversies between the parties are sufficiently pared down to warrant consideration.

In my humble opinion, the question of whether or not to file a reply brief (as opposed to its content) is really a non-issue.  We are advocates for our client, and although there are certainly times when less is more, I do not believe that letting your opponent’s analysis of your argument sit as the last word is ever good advocacy.  As Justice Stein commented, the lack of a reply brief, “gives you a clue it's not a strong case."

For me – argument over.

Make Those Arguments: Don't "Incorporate By Reference."

Any (every?) authority on legal writing admonishes against “incorporating by reference” and encourages legal writers to quote important components of the record and include all legal arguments with the body of an appellate brief.  (Or any dispositive motion for that matter).  Inevitably, we’ve all had those moments – after pouring over a record for the twelfth time or making the same argument in the fifth demurrer to the complaint – where the temptation to reference an earlier argument or to just cite to page 1,420 of the record becomes more than mere temptation, and seems to approach actual reason.

Maybe an admonition against this practice from the Justices themselves will dispel your temptation:

While incorporation by reference might seem to make sense ecologically, by reducing the amount of paper used in appellate briefs, the actual result would be to increase the amount of papers used in an appeal.  The rules require an original and four copies of the appellate brief.  The original brief stays with the record on appeal.  Each of the three justices on the panel deciding the case receive copies of the briefs which they can use at their desks, work on at home, or take with them when traveling for an engagement outside the court.  The fourth copy remains in the clerk’s office for public inspection.  Only one copy of the trial court record is filed in the appellate court, however.  If all three justices had to share this single record in order to review, research and evaluate a party’s arguments the time it would take for the court to decide the appeal would considerably increase.  This would work a hardship on the parties to that appeal and to the parties in other appeals awaiting their turn for consideration and decision.  Alternatively, four copies of the trial court records would have to be filed with the Court of Appeal.  Because these records often consist of thousands of pages it easy to see how the amount of paper used in the appeal would increase significantly.
Parker v. Wolters Kluwer United States, Inc. et al. (2007) 149 Cal.App. 4th 285, 290-291 (certified for partial publication).

An interesting commentary on appellate procedure, to be sure:  If that hasn’t curbed your desire to type “See . . .”, keep reading:

Therefore, in deciding the issues in this appeal we have not considered Parker’s “incorporated” arguments.
Id. (Emphasis added.)

Make the arguments again.  Cut and paste if you must.  Don’t incorporate by reference!