Court may consider attorney incivility in deciding whether to lower attorney fees awarded (Snoek v. Exaktime)

 

Courts may consider the incivility of counsel in deciding whether to lower the amount awarded to a party for said attorney's efforts

The Second District, Division Three, of the California Court of Appeal has upheld a trial court ruling reducing the amount of attorney fees awarded to a party due to the incivility of counsel for that party.  (Snoek v. Evaktime (October 21, 2023) BC708964.)  The Hon. Michael P. Linfield, Judge Presiding, of the Los Angeles County Superior Court, applied such a modifier against the plaintiff for the conduct of his counsel when the trial court awarded attorney fees:

Plaintiff Steve Snoeck appeals from the trial court’s order awarding him $686,795.62 in attorney fees after the court applied a .4 negative multiplier to its $1,144,659.36 adjusted lodestar calculation “to account for [p]laintiff’s counsel’s . . . lack of civility throughout the entire course of this litigation.” The court awarded Snoeck fees after he prevailed on one of his six causes of action against his former employer ExakTime Innovations, Inc. on his complaint for disability discrimination under the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.) and related causes of action. The jury [had previously] awarded Snoeck $130,088 in damages on his claim ExakTime failed to engage in a good faith interactive process with him. (Id., p. 2.)

In ruling upon a post-trial motion for attorney fees, the trial court found plainrtiff's counsel's rates of $535.00 to $750.00 per hour "reasonable" but made several alterations to the fees requested, including mathematical corrections and applying a 1.2 positive multiplier to the to the "lodestar" rate awarded, given the length of the case and its "contingent" nature.  However, the trial court also found that plaintiff's counsel, Perry Smith, had been uncivil in sending communications containing ad hominem attacks on defense counsel and applied a .4 negative multiplier to the entire fee award.

In an opinion written by Justice Edgarton, the Second District found the trial court acted well within its discretion when it made this reduction.  In doing so the appellate court rejected the argument the .4 reduction was an improper "sanction" as well as that such a reduction controverted the purpose of the fee-shifting provision in FEHA:

Moreover, the court’s order specifically recognized civility was not just a moral good but an aspect of attorney skill. And, as discussed, ample evidence supports the court’s reduction of the lodestar to account for plaintiff’s counsel’s skill given his incivility toward opposing counsel and the court. (Cf. Edgerton v. State Personnel Bd. (2000) 83 Cal.App.4th 1350, 1363 [affirming application of positive multiplier given, in part, “ ‘the skill displayed by plaintiff’s counsel in overcoming the intransigent opposition of defendant’ ”].)
Nor did the court contravene the principles of the FEHA in doing so. The lodestar adjustment method—which gives the court the discretion to augment or diminish the lodestar figure to arrive at a reasonable fee—is the gold standard for determining an attorney fee award under the FEHA. (Id., p. 34; original emphasis.)

Potential consequences for counsel whose fees are reduced due to their own actions

To the extent such a fee reduction results in a decrease in monies ultimately paid to the client (and this is a hypothetical here, as we have no way of knowing if the plaintiff actually paid any fees out-of-pocket) a counsel whose actions have caused such a reduction in what is ultimately paid to a client may face certain consequences.  

First, the client may assert that engaging in uncivil conduct harming said client is a breach of the duty duties owed by the attorney, such as duties related to being a fiduciary and competently performing legal services.

Moreover, such an attorney assuredly owes a duty to the client to explain the consequences of such a ruling in terms of the reduction in attorney fees awarded including the specific reasons such fees are being reduced.  This implicates provisions of the California Rules of Professional Conduct, including rule 1.4 which provides a lawyer must keep a client informed as to significant developments in the case.  

Further, Rule 1.7 requires informing the client of any conflict of interest, and the breach of a fiduciary duty owed a client may be said to create such a "conflict."  Specifically, case law holds that  “attorneys have a fiduciary duty to disclose material facts to their clients, an obligation that includes disclosure of acts of malpractice.” (Beal Bank SSB v. Arter & Hadden LLP (2007) 42 Cal. 4th 503, at 514.)

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One-year MICRA Statute of Limitations Applies to Claim Against Ambulance Driver Who Read-Ended Another Motorist (Gutierrez v. Tostado)

 

The one-year Statute of Limitations in California's MICRA regime bars untimely claim against driver of ambulance who rear-ended third-party motorist while transporting another patient

Plaintiff Gutierrez was driving on the I-280 when he was rear-ended by an ambulance driven by defendant Tostado.  The driver and ambulance operator brought a motion for summary judgment based on the statute of limitations found in California's Medical Injury Compensation Reform Act (MICRA).  This statute was passed by the voters in 1975 and limits the amounts recoverable due to alleged negligence in providing medical services.  

The Hon. Christopher J. Rudy of the Santa Clara County Superior Court granted the motion.  On appeal, the Sixth Appellate District upheld the grant of summary judgment over the dissent of one Justice. (Gutierrez v. Tostado (December 1, 2023) H049983.)

Upon appeal, the issue was whether the one-year MICRA statute of limitations found in Code of Civil Procedure section 340.5, as opposed to the general two-year statute of limitations for tort actions, applied.  In other words, did MICRA's provisions apply where the negligence of medical providers was directed at a non-patient such as fellow motorist Gutierrez, who just happened to be driving in front of defendants' ambulance?

 

Justice Greenwood, joined by Justice Grover, wrote for the majority and found that because Tostado was driving the ambulance he was providing "professional [medical] services" at the time of the accident.  Therefore, the time limitations found in MICRA applied.  This is important because under case law such as Flores v. Presbyterian Intercommunity Hospital (2016) 63 Cal. 4th 75, at 88, only actions “alleging injury suffered as a result of . . . the provision of medical care to patients” are subject to MICRA. (Gutierrez, p. 3; italics added.)

The majority answered this question affirmatively and cited to Canister v. Emergency Ambulance Service, Inc. (2008) 160 Cal. App. 4th 388, at 407, where the MICRA one-year limit applied to injury to someone injured while riding in an ambulance who was not a patient.  As Gutierrez explained at pages five to six, the MICRA time limit applied to someone not receiving medical service but who was nonetheless still injured as a result of negligence in providing such services:

 

In Canister, a police officer accompanying an arrestee in the back of an ambulance was injured when the ambulance hit a curb. At the time of the accident, the ambulance was being driven by one EMT while another attended to the arrestee in the rear of the ambulance. The officer sued for negligence. (Canister, supra, 160 Cal.App.4th at p. 392.) After finding that an EMT was a health care provider and that transporting a patient constituted professional services within the meaning of MICRA, the Canister court held that MICRA extends to “ ‘any foreseeable injured party, including patients, business invitees, staff members or visitors, provided the injuries alleged arose out of professional negligence.’ [Citation.]” (Id. at pp. 407-408.) The court concluded that it was foreseeable as a matter of law that a police officer accompanying an arrestee in an ambulance might be injured in the operation of the ambulance. (Id. at p. 408.)

 

Justice Bromberg dissented and wrote that neither the plaintiff nor the defendants could have anticipated that MICRA would apply in this situation, i.e., "a run-of-the-mill traffic accident involving an ambulance that happened to be transporting a patient on a non-emergency matter, presumably with its siren off." (Gutierrez dissent, p. 2.)  The dissent also noted the plaintiff's lawyers were unlikely to know that MICRA applied to his claim because in 1982 the MICRA provisions specifically related to paramedics were removed. (Gutierrez dissent, p. 4.)  Moreover, at the time MICRA was enacted the general statute of limitations for tort claims was one-year, meaning MICRA was not intended to shorten the time to bring claims. Rather, its purpose was to reduce the amount of monetary awards for medical malpractice to prevent a reduction in affordable and available medical care to the public.

Further review of Gutierrez

This case may ultimately be headed to the California Supreme Court, given that the case law cited by the majority and dissent lacks harmony as to when MICRA does or does not apply.

It should also be noted that earlier this year MICRA was amended by the California legislature.  The original $250,000 "cap" on claims for professional medical negligence was increased.  Wrongful death claims from medical malpractice are now "capped" at $500,000 and this amount will increase by $50,000 each January until the maximum is $1,000,000.  For other claims, the "cap" is $350,000, with yearly increases of $40,000 until the new limit reaches $750,000.

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Update - California Appellate Trends for 2023

Two words come to mind in summing up trends in appellate law for the past year: stability and continuity.  Neither the California Supreme Court nor the six District Courts of Appeal veered off in a totally surprising direction.  Indeed, the Supreme Court issued a relatively modest 55 total majority opinions - this being modest in total number but not necessarily in terms of the breadth of the opinions - for the legal year 2022-2023.

Despite the trend toward stability and continuity, we do have a new Supreme Court Chief Justice, the Hon. Justice Patricia Guerrero.  She was nominated by Governor Newsome as Chief Justice and was elected by the people on November 8, 2023. Justice Guerrero replaces the well-regarded Justice Tani G. Cantil-Sakauye, who served as a Chief Justice for 12 years.  The former Chief Justice spent the last few years navigating the pandemic and the resulting closing and re-opening of our courts and the resulting modifications of California judicial procedure.  

Some relatively straightforward trends continued this year, including strictly holding arbitrators to the relevant standards related to disclosure, bias, misconduct, etc.  The days when trial courts might "rubber stamp" an arbitration award and fail to seriously consider allegations against the arbitrator and the parties would then expect an appellate court to defer to the trial court's confirmation of the arbitration award are largely gone. (See, e.g,., FCM v. Grove Phan, holding an adverse credibility determination based largely upon the need for a translator constituted "bias" by the arbitrator)

California courts are also working through a host of issues related to COVID-19 and coverage.  For example, Endeavor v. HDI Global held that a standard liability policy did not cover losses from the pandemic because there was no "direct" physical loss or damage.

Indeed, this very issue is now pending before the California Supreme Court in Another Planet Entertainment, L.L.C. v. Vigilent Insurance Co., wherein the Ninth Circuit Court of Appeal certified the following question:

Can the actual or potential presence of the COVID-19 virus on an insured’s premises constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy?

For a preview of the next term of the California Supreme Court, please see the court's summary of pending cases.

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Short take-away -- misconduct for arbitrator to base credibility upon use ofinterpreter (FCM v. Grove Pham)

 

Arbitration award reversed due to "misconduct" where arbitrator makes adverse credibility determination upon party's use of an interpreter

The California Court of Appeal for the Fourth District, Division One, has overturned an award in a contractual arbitration proceeding because it was based, at least in part, upon an improper determination a witness was not credible. (KMI v. Grove Pham (October 17, 2023) D080801.)  Writing for a unanimous majority, Justice Dato overturned the order of the Hon. Daniel A. Ottalia, Judge Presiding, of the Riverside County Superior Court.  The trial court had confirmed the petition of plaintiff FCM to confirm the arbitration award in its favor over the objections of defendant Grove Pham.  Grove argued the arbitrator committed misconduct when she made a determination plaintiff and witness Phuong Pham was not credible.  

Despite the general rule that an appellate court defers to an arbitrator's findings as to credibility, the Fourth District found the arbitrator had improperly discounted Mrs. Pham's testimony:

In the arbitrator’s view, although the transaction “was rather complicated,” her decision in the case was “made easier by an evaluation of the credibility of the witnesses.”                                         ...

The arbitrator did not find Phuong or Trish credible. In explaining why, she highlighted as the key example Phuong’s use of an interpreter:

“Among the items that stand out, is Mrs. Pham’s use of an interpreter. While the Arbitrator understands that people for whom English is a second language frequently prefer to testify in their native language in important legal matters, Mrs. Pham’s use of an interpreter appeared to the Arbitrator to be a ploy to appear less sophisticated than she really is. She has been in the country for decades, has engaged in sophisticated business transactions and has functioned as an interpreter." (Id., p 5.) 

The appellate court found this finding rose to the level of "bias" against Pham,  given the fact there was little evidence to support it.  For example, the court of appeal noted that immigrant communities may include "thriving" businesses run by persons who speak English only as a second language, and the fact that Mrs. Pham requested an interpreter did not indicate her testimony was less credible.  The court further noted that the facts plead indicated Mrs. Pham had used her daughter as an interpreter during the subject business dealings.

The Fourth District thus held the record showed arbitrator "bias" and such bias is included in the definition of "misconduct." Consequently, the rights of the plaintiff were prejudiced, and such misconduct resulting in prejudice is one of the narrow grounds for overturning an arbitration award under California's Code of Civil Procedure section 1286.2(a)(3).

No Duty to Warn Tenant of Obvious Water Current (Nicoletti v. Goldrich Kest)

 

Landlord had no duty to warn of open and obvious condition of water current from flowing rainwater

The Second District, Division Eight has upheld a grant of summary judgment by the Hon. Daniel Crowley, Judge Presiding, of the Los Angeles Superior Court in a tenant versus landlord tort suit. (Nicoletti v. Goldrich Kest (November 14, 2023) B319377.)  Summary judgment was granted in favor of the landowner based on the defense that the hazard was an "open and obvious" condition.  Plaintiff Nicoletti allegedly fell due to a rainwater current while walking a dog on the premises she rented from defendant Dolphin Marina apartments, sued as the DBA of Goldrch Kent:

On April 9, 2020, Nicoletti took her neighbor’s dog for a walk around Dolphin’s apartment. . . . Nicoletti observed that it was raining that day with thunderstorms. At around 3:30 p.m., Nicoletti crossed the driveway of the North Side Gate entrance that led to the underground parking lot. The apartment complex also had a South Side Gate entrance and another entrance on Panay Way. Nicoletti testified that she had gone past the North Side Gate “thousands of times” before the incident.

Before crossing, Nicoletti observed that the concrete on the North Side Gate driveway was wet, and rainwater formed a current that was running down the driveway. Nicoletti did not observe any caution tape or other warning advisements. Nicoletti proceeded to cross, and the rainwater current knocked her down. Nicoletti then fell down the North Side Gate driveway and hit the gate at the bottom of the driveway. (Id., p. 2.)

The trial court found Dolphin did not have a duty to warn of the running rainwater on the driveway because it was a dangerous condition that was sufficiently obvious.  Dolphin countered  the danger from the water current was not obvious, but the trial court nonetheless granted summary judgment.  

The appellate court affirmed, noting the general rule that landowner must “maintain land in [its] possession and control in a reasonably safe condition.” (Alcaraz v. Vece (1997) 14 Cal. 4th 1149, at 1156; emphasis added.)  However, it also reiterated that "[a] harm is typically not foreseeable if the “dangerous condition is open and obvious," citing Jacobs v. Coldwell Banker Residential Brokerage Co. (2017) 14 Cal. App. 5th 438, at 446.

Upon appeal, Nicoletti further argued that an exception to this doctrine applied, namely that of "necessity."  The appellate court noted this argument was waived as it was first made upon appeal; nonetheless, the Nicoletti court considered and rejected this argument.  Writing for the majority, Justice Viramontes explained the "necessity" argument was not supported by the facts, and, more to the point, public policy indicated no duty should be imposed to place "warnings" due to temporary weather conditions:

Our holding is also consistent with our Supreme Court’s declaration that courts must assign tort duties “to ensure that those ‘best situated’ to prevent such injuries are incentivized to do so.” [Citation.]  Under these circumstances, Nicoletti was in a better position to avoid the obvious danger of walking across a current of water that formed as a result of a rainstorm that began that same day. As discussed above, Nicoletti could have chosen to use a different entrance. The burden imposed on Dolphin to constantly monitor weather conditions and immediately install warning signals is outweighed by Nicoletti’s ability to avoid a condition she should have observed as obviously dangerous. (Id., p. 9.)

Counsel for plaintiffs should note the obvious lesson that arguments destined for a Court of Appeal should first be made in the trial court.  

Defendants should be prepared to argue the applicability of the "necessity" exception to the open and obvious rule.  The defense should also be keen to address public policy issues, such as the scope of the duty the plaintiff seeks to impose, an example being the duty proffered here by the plaintiff, namely, that the landlord should have warned of the current due to the heavy rain that day.

Query - What are the most important Federal and California appellate decisions of 2023?

 

Thus far, the most important Federal and California appellate decisions of 2023 are. . . 

I have been asked what are the most important appellate decisions of 2023, either in Federal or California courts. 

 

Federal Opinions of 2023

As to opinions from our Federal courts, including the United States Supreme Court, the answer is straightforward due to the import and controversy surrounding this year's most talked-about decision.  

Students for Fair Admissions v. Harvard held equal protection under the law prohibits racial preferences in university and graduate school admissions.  To learn more, please see our discussion of Justice Thomas' concurrence, which focuses on the history of racial equality (and inequality) in our country as he writes in support of the majority.

California Opinions of 2023

Choosing just one California opinion is difficult because 2023 has perhaps had fewer blockbuster opinions from the California Supreme Court than in prior years.  Therefore, the answer lies in choosing an opinion that may have the most import for future legal disputes, not only in California but in other jurisdictions as well.  We have therefore chosen the Fourth District, Division Three opinion holding a website is not a "public place" for purposes of disability access, as this opinion is important to attempts to define the scope of a digital "place."

As we explained in a prior post, Acting Presiding Justice Sanchez wrote for the majority in Martin v. Thi E-Commerice,  and interpreted the phrase "place of public accommodation" as defined in the Americans with Disabilities Act.  The majority thus held the wording of the act excluded websites that have no relation to a physical location.  Consequently, a website not required for entrance to a location (in contrast to a website which, for example, might be used to make reservations for an actual physical location) is not subject to the provisions of the ADA as "the ADA unambiguously requires [such] a physical location." (Martin, p. 2.)

Please let us know if you have a contrary opinion as to the most important decisions of 2023.

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