ELEVENTH ANNUAL YEAR-END REVIEW 

The overarching subject of this year’s Mediation Messages and Arbitration Insights was the Coronavirus, which has impacted every aspect of our lives – personal and professional – although, as always, a wide variety of subjects involving arbitration, evidence, settlement, video conferencing and unfair competition was also covered. The following are summaries of all of this year’s Messages and Insights. (Complete versions may be found on my website, www.marcusmediation.com.) 

THE CORONAVIRUS 

Mediation Message no. 167 (“The New Normal”) The full extent of the virus on our lives probably won’t be known for years to come, but certain lesser “truths” about its immediate effect on the legal community are more evident: Routine calendar matters and motions can be handled remotely. I suppose, some day in the future, jury trials will also be conducted by video conference. The virus has disrupted trial dockets. I’m guessing that the first criminal and unlawful detainer cases, which have priority, will not be tried until the latter part of 2021, if not the beginning of 2022. With that assumption, I don’t foresee civil cases in Los Angeles County going to trial until 2023 at the earliest. Personal contact in the practice of law is currently the exception. The law office, as we knew it, once bustling with human activity, is a rarity. The nature of the practice of law in the future is uncertain – When the virus is behind us, will attorneys return to their offices or continue to find it more economical and practical to work remotely? Will attorneys want in person rather than Zoom mediations? I believe it will be a combination of both – we’re social animals and both enjoy and need human interaction. The youthful attorney can probably benefit more from the personal contact of the more experienced counsel. Some clients require literal handholding. Some attorneys believe subjectively that in person mediations are more effective. Nonetheless, like the demise of the law firm library in the early 1990s, the practice of law will adapt to the changes and adopt the benefits – firms will reduce the size of their offices and many attorneys will continue to work remotely. And the majority of mediations will continue to be conducted by Zoom because participants don’t have to travel, the procedure provides a better use of one’s time and it’s as effective as in person mediations. It’s the new normal. 

Mediation Message no. 169 (“Thanksgiving Reflection”) The pandemic has made me realize how much I am grateful for in these very uncertain times: I am grateful for having a home; many people and families are not so fortunate; I am grateful for having a wonderful wife and partner who has made our isolation very bearable; I am grateful for having healthy children and grandchildren whom I speak to regularly on the phone or Zoom; I am grateful for having excellent medical care; I have the benefit of attentive, competent medical professionals. Again, not everyone is so fortunate; I am grateful for having the opportunity to be involved in a challenging part of the legal profession. In this calamitous period of our history, let’s think about what we have rather than focus on the negatives and help those who are not so lucky.  

ARBITRATION 

Arbitration Insight no. 30 (“Arbitrators, without Specific Authority, Cannot Order Third Party Discovery”) Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52 Cal.App.5th 360 impacts arbitration discovery, both intended and unintended. The intended, obvious aspect is its holdings that an arbitrator does not have the authority to order nonparty or third party discovery under the California Arbitration Act (CAA) and the Federal Arbitration Act (FAA), unless the parties have conferred that authority in their arbitration agreement. Secondarily, Aixtron is a reminder of the importance of the initial arbitration management conference (AMC), which should include a discussion about what arbitration rules shall apply. MDM’s observation: Before the AMC, attorneys for all parties should review the pertinent arbitration agreement to determine what rules of procedure and discovery are referenced (e.g., the CAA, AAA or the provider’s rules) and whether those rules are satisfactory; if not, the attorneys should attempt to resolve that issue with one another and then be prepared to discuss that situation with the arbitrator at the conference.  

EVIDENCE 

Arbitration Insight No. 31 (“A Witness Declaration Evidence Primer”) Some of the more common issues in lay witness declarations were reviewed: A lay witness must have personal knowledge of the matter which he or she is declaring about. (See Evid. Code sec. 702, subd. (a).) If the witness did not experience (in other words, hear or see) the matter, it should not be discussed. Next, lay witnesses can “authenticate” a writing, pursuant to Evid. Code sec. 1400, if they can show familiarity with the writing. The declarant must have some knowledge about the preparation of any writing, as an example, by being able to identify the handwriting or signature on the document. Merely attaching a writing as an exhibit to a declaration, without more, does not authenticate that exhibit. (Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 855. It is also common for a declarant to offer an opinion that a party is a good person, honest and hard working. However, evidence of a person’s good character is inadmissible to support the credibility of that person unless evidence of the party’s bad character has been admitted for the purpose of attacking his or her credibility. (Evid. Code sec. 790.) Should plaintiffs object to such an opinion, the defendants might contend that the complaints’ causes of action attacked their credibility, while plaintiffs might argue in response to a similar objection by defendants that their answers to the allegations inferentially challenged the plaintiffs’ respective credibility. 

Mediation Message No. 162 (“Speculative Expert Testimony v. Expert Qualifications”) Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747 holds that the exclusion of speculative expert testimony is one of a trial court’s gatekeeper functions. (Id. at pp. 771-772.) In other words, “the court must simply determine whether the matter relied on can provide a reasonable basis for the opinion or whether that opinion is based on a leap of logic or conjecture.” (Id. at p. 772.) San Francisco Print Media Co. v. The Hearst Corp. (2020) 44 Cal.App.5thh 952 relied upon Sargon to affirm the trial court’s exclusion of an expert’s estimates of costs in a lawsuit by the San Francisco Examiner against the San Francisco Chronicle, in which the Examiner claimed that the Chronicle had sold a certain type of print advertising in its paper at prices that violated Business and Professions Code sections 17000 and 17200. However, it should be noted, as held in ABM Industries Overtime Cases (2017) 19 Cal.App.5th 277, that it may be error to exclude an expert’s testimony because of the supposed inadequacy of that person’s qualifications. In ABM Industries, the trial court erred in excluding the testimony of an expert, despite certain deficiencies in that person’s background information, because the witness’s extensive business experience clearly established that he was an expert in database management and analysis and was familiar with numerous, highly complex transactions in the relevant subject matter. (Id. at pp. 294, 296-297.) “Expertise, in other words, ‘is relative to the subject,’ and is not subject to rigid classification according to formal education or certification.” (Id. at p. 294.) Once an expert’s qualifications have been established, “questions regarding the degree of an expert’s knowledge go more to the weight of the evidence presented than to its admissibility.” (Ibid.; emphasis in the original.) 

Mediation Message No. 166 (“The Hearsay Rule and a Re-Introduction to Evidence I”) Hart v. Keenan Properties, Inc. (2020) 9 Cal.5th 442 provides an introductory law school review of what is hearsay and what is not. In this personal injury action, the Supreme Court held that a witness’s observation of the defendant company’s name and logo on invoices was admissible as circumstantial evidence of the company as a source of the pipes, which had allegedly caused the injury, and was not proof of the truth of matters asserted in the invoices. (Id. at p. 445.) Hart explained that when words are being admitted for other than to prove their truth, two requirements must be met: “’The first  … is that the out-of-court statement must be offered for some purpose independent of the truth of the matters it asserts. That means that the statement must be capable of serving its nonhearsay purpose regardless of whether the jury believes the matters asserted to be true.” (Id. at p. 447; emphasis in the original.) The second requirement is that the “Otherwise competent evidence must also be relevant. …  Evidence is relevant if it has a ‘tendency in reason to prove or disprove any disputed fact that is of consequence to the determination of the action.’ (Statute.) Documents and other items found at a location may be relevant to show a person has a connection with that place.” (Id. at p. 448.) Hart also upheld the admission of invoice copies, as secondary evidence, pursuant to Evid. Code § 1523, subd. (b), when originals were not available. (Id. at p. 450.) “‘As long as the evidence would support a finding of authenticity (see Evidence Code § 1400 there is “evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is”), the writing is admissible. The fact conflicting inferences can be drawn regarding authenticity goes to the document’s weight as evidence, not its admissibility.’” Furthermore, “The means of authenticating a writing are not limited to those specified in the Evidence Code. [Citations.] For example, a writing can be authenticated by circumstantial evidence and by its contents.” (Ibid.)  

Mediation Message No.  168 (“Is the ‘Open the Door’ Principle a Fallacy?”) Fallacies, which are false, deceptive, misleading or mistaken ideas or arguments, exist in everyday affairs (for example, it’s a fallacy that a fact must be true if stated by an authoritative person) and in the law. (See, for example, Redevelopment Agency of Sacramento v. Malaki (1963) 216 Cal.App.2d 480 [The “plain meaning” rule that statutory interpretation is not permissible where language is clear and unambiguous, though its “plain meaning” is contrary to probable legislative intent, is a fallacy].) The “open the door” principle that a party who introduces an inadmissible fact or claim has, in effect, “invited” the opposing party to introduce an inconsistent theory or fact, should, under certain circumstances, be added to the above list of legal fallacies. As a general proposition, refraining from making an objection to inadmissible evidence does not create an absolute right, in response, to introduce related evidence. The test or standard for inadmissibility or admissibility of the response depends upon when the statement or evidence is made, whether it can be cured by an admonition, whether the original question or answer was admissible and the degree of prejudice created by the initial evidence. For example, improper comments in opening statements do not “open the door” in subsequent witness examination because such statements are not evidence (Rufo v Simpson (2001) 86 Cal.App.4th 573, 600–604), whereas a witness who makes a sweeping statement on direct or cross-examination may have “opened the door” to use of otherwise inadmissible evidence for the purpose of contradicting such testimony. (Andrews v. City and County of San Francisco (1988) 205 Cal.App.3d 938, 946; see also People v. Robinson (1997) 53 Cal.App.4th 270, 282–283.) In analyzing the issue, the question appears to be whether the initial evidence was prejudicial and not curable by objection or a motion to strike. If so, the adverse party should be permitted to contradict it, under the doctrine of “curative admissibility.” If it is not prejudicial, there seems no reason to permit the adverse party to capitalize on the blunder by offering impeaching evidence on a collateral matter. (See 3 Witkin, Cal. Evid (4th ed. 2000) Presentation at Trial, § 352, pp. 439–440; see, e.g., Travis v Southern Pac. Co. (1962) 210 Cal.App.2d 410, 420.)  Also, when evidence presented during a witness’s direct examination is incomplete or distorted when taken out of context, the rule of completeness allows the cross-examiner to correct these issues by putting the evidence in its proper context. (See Evidence Code §356; see also Rosenberg v. Wittenborn (1960) 178 Cal.App.2d 846 and People v. Gombos (1970) 5 Cal.App.3d 187, 192-193.) MDM’s observation – The lesson of the above authorities is that whether or not to take advantage of an opponent’s intentional or negligent missteps, which arguably have “opened the door,” should not be made quickly; instead, that decision, like many others in the law, depends on the totality of the circumstance including when, during the proceeding, the issue occurred (for example, early or late in the case); its importance to the case; whether there is any legal basis for its admissibility; whether the trier has been influenced or prejudiced by the question and/or answer and whether the potential contrary or impeaching evidence is truly inconsistent or impeaching.  

VIDEO OR ZOOM CONFERENCING 

Mediation Message No. 163 (Video conferencing) The concern that video conferencing will not be as effective as meeting face-to-face with the neutral or even the opposing party is valid, to an extent, but the benefits of video conferencing outweigh any negatives. The positives of video conferencing are that parties and neutrals can still effectively make their points on a screen; the participants do not have to travel to the mediation; attorneys (and clients) can use the “dead time” more effectively when the neutral is meeting with the opposing party; assuming no social separation or stay-at-home orders, clients need not be present with their attorneys and adjusters can now be present by video and not just by telephone.  

Mediation Message No. 164 (“Zoom Video Conferencing, Part II”) Besides looking at the positives of video or Zoom conferencing, this Message discussed certain factors that can enhance the process: Before the mediation, exchange cell phone numbers and email addresses with the mediators; assure Zoom security by using a secured, stable internet connection, instead of a public wi-fi network;  place light in front of rather than behind you to better highlight your face; when using a laptop, place it on a box or large book so that the camera in the device is at eye level; otherwise, you’re looking down at the screen rather than at the other participants; keep the background uncluttered to minimize distractions; use a headset to reduce noise. “Mute” your mic, when not in use, to minimize background noise; use the computer, text, call or email mediators during the mediation when you want to speak to them and have not told them when to return to your breakout room. 

SETTLEMENT/OFFERS TO COMPROMISE 

Mediation Message No. 161 (“C.C.P. Section 998 Offers Updated”) This Message reviewed appellate decisions from 2018 and 2019 concerning different situations and circumstances involving Code of Civil Procedure section 998 offers to compromise: Arbitration –  a 998 offer may be made up to fifteen days after an arbitration award. (Heimlich v. Shivji (2019) 7 Cal.5th 350, 356, 359); Attorney’s fees – the use of the phrase “exclusive of reasonable costs and attorney fees if any” in a 998 offer is not ambiguous. (Timed Out LLC v. 13359 Corp. (2018) 21 Cal.App.5th 933, 944, 946); the trial court erred in cutting off the plaintiff’s fees in a consumer warranty matter. (Etcheson v. FCA US LLC (2018) 30 Cal.App.5th 831, 852); attorney’s fees may be recovered pursuant to a successful 998 offer where authorized by contract, statute or law. (Linton v. County of Contra Costa (2019) 31 Cal.App.5th 628, 632-633); attorney’s fees incurred where the parties continue to litigate after a settlement offer are recoverable. (Hanna v. Mercedes-Benz USA, LLC (2019) 36 Cal.App.5th 493, 508); The relevance of costs calculations in 998 offers – the inclusion of all costs to damages awarded can make the claimant a “prevailing party.” (Hersey v. Vopava (2019) 38 Cal.App.5th 792, 801); FEHA cases – Costs and/or attorney’s fees are not recoverable by a  prevailing defendant in a non-frivolous FEHA action. (Scott v. City of San Diego (2019) 38 Cal.App.5th 228); Huerta v. Kava Holdings, Inc. (2018) 29 Cal.App.5th 74, like Scott, held that section 998 does not apply to nonfrivolous FEHA actions and reversed an order awarding defendant costs and expert witness fees pursuant to that statute; Multiple party 998 offers – The decedent’s heirs joint 998 offer to settle wrongful death claims was valid. (Gonzalez v. Lew (2018) 20 Cal.App.5th 155, 163, 169); Prejudgment interest – Prejudgment interest is allowed from the date of the 998 offer. (Lewis v. Ukran (2019) 36 Cal.App.5th 886, 898); Ambiguities in 998 offers – The parties may clarify a 998 offer to resolve ambiguities in the offer. (Prince v. Invensure Ins. Brokers, Inc. (2018) 23 Cal.App.5th 614, 622-623); Third party responsibility for a 998 offer – an insurance company was responsible for the 998 costs payment. (Meleski v. Estate of Albert Hotlen (2018) 29 Cal.App.5th 616, 621); Timing of a 998 offer – was the offer “realistically reasonable” under the circumstances? (Licudine v. Cedars-Sinai Medical Center (2019) 30 Cal.App.5th 918, 924); Trial court discretion in 998 matters – the trial court has discretion to determine whether a 998 award is appropriate under all of the circumstances. (LAOSD Asbestos Cases (2018) 25 Cal.App.5th 1116, 1119, 1124-1125; 1127.) 

UNFAIR COMPETITION LAW  

Mediation Message No. 165 (“Unfair Competition Law and the Right to a Jury Trial in Civil Matters”) Nationwide Biweekly Administration, Inc. v. Superior Court (2020) 9 Cal.5th 279 holds that causes of action under California’s unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.) and California’s false advertising law (FAL) (Bus. & Prof. Code, § 17500 et seq.) shall be tried by the court rather than a jury because they are equitable in nature. Nationwide’s holding applies only to UCL and FAL causes of action in both criminal and civil cases and “express(es) no opinion regarding how the state constitutional jury trial right applies to other statutory causes of action that authorize both injunctive relief and civil penalties.” (Id. at p. 294.) Nationwide’s standards and guidelines in deciding that the UCL and FAL are equitable in nature and shall be tried by the court, are useful when making that same analysis in other civil actions when there is a question whether there is a right to a jury trial where both equitable and legal causes of action exist. These standards and guidelines are as follows: California’s constitutional jury trial provision preserves the right to jury trial in civil actions as to legal causes of action or “actions at law” in which the plaintiff seeks to recover money damages to compensate for an injury, such as breach of contract or other tortious conduct, and does not apply to causes of action that are equitable in nature or “suits in equity,” such as an injunction or order for specific performance. (Id. at pp. 292-293.) Also, “that constitutional provision grants the right to jury trial in actions “’of like nature”’ or of “’the same class’” in which a jury trial was provided at common law in 1850, when the jury trial provision of the California Constitution was first adopted.” (Id. at p. 327.) The California Constitution’s right to a jury trial takes precedence over the Legislature’s intention that a matter be tried by the court. (Id. at pp. 296-297.) The title of a statute is not controlling. (Ibid.) The right to a jury exists when the legal and equitable actions are severable. (Id. at pp. 316-317.) The court decides the order in which severable legal and equitable causes of action shall be tried. (Id. at p. 317.) Where legal and equitable causes of action cannot be severed, the “gist of the action” decides the court versus the jury trial issue. (Id. at p. 318.) And, there is no right to a jury trial where the equitable and legal aspects are nonseverable and the gist of the action is equitable rather than legal. (Id. at p. 327.) MDM’s observation: Nationwide’s holding might cause lawyers to reconsider their incorporating a UCL cause of action in complaints (especially employment related) where injunctive relief is not necessary or critical and civil penalties under the UCL either essentially duplicate the damages sought in the other causes of action or do not take into account the harm suffered by the plaintiff (see DiPerro  v. Bondo Corp. (2007) 153 Cal.App.4th 150, 182) because, at most, the UCL remedy could result in a loss of the right to a jury if all of the causes of action are found not to be severable and, at a minimum if severable, would allow the court to first try the UCL cause of action, which “may leave nothing for a jury to resolve.”  

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available at the articles link on the website.