Mediation Message No. 125

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 125

RFAs – IMPORTANT PROCEDURAL REQUIREMENTS

Having discussed in Mediation Message no. 123 (June 2016) the monetary consequence of failing to admit certain facts prior to trial despite their obvious truth, it’s timely to look at some of the other significant procedural requirements concerning requests for admission (RFAs).

The policy behind RFAs. Unlike the other types of discovery, which are designed to prepare for trial, an RFA, in contrast, is used to expedite the trial process (Cembrook v. Superior Court (1961) 56 Cal.2d 423, 429); Grace v. Mansourian (2015) 240 Cal.App.4th 523, 528.)

The RFA’s scope. The scope of an RFA is broad. In a personal injury action, it may include requests for admissions regarding negligence, causation and damages. (Id.) It may ask for an admission to a legal conclusion. (Burke v. Superior Court (1969) 71 Cal.2d 276, 282 (proper to request that a party admit that a levy of attachment was regular and valid on its face; that a motion to dissolve the attachment would have been unsuccessful). It may ask for an admission of a controversial matter, one involving complex facts or for an opinion. (Cembrook v. Superior Court, supra, 56 Cal.2d at p. 429.)

Responding party’s duty to investigate. Responding parties have a duty to make a reasonable investigation of the facts which do not come within their personal knowledge. (Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618, 634; Smith v. Circle P Ranch (1978) 87 Cal.App.3d 267, 273.)

Responses to RFAs. Each answer in a response to requests for admission “shall (1) Admit so much of the matter involved in the request as is true, either as expressed in the request itself or as reasonably and clearly qualified by the responding party. (2) Deny so much of the matter involved in the request as is untrue. (3) Specify so much of the matter involved in the request as to the truth of which the responding party lacks sufficient information or knowledge.” (C.C.P. sec. 2033.220, subd. (b).)

Withdrawal or amendment of an admission to an RFA. A party may withdraw or amend an admission in response to an RFA only on leave of court after notice to all parties. And, the court may permit such withdrawal or amendment only “if it determines that the admission was the result of mistake, inadvertence, or excusable neglect, and that the party who obtained the admission will not be substantially prejudiced in maintaining that party’s action or defense on the merits.” If the motion is granted, the court can impose conditions that are “just,” including that the party who obtained the admission be permitted to pursue additional discovery related to the matter involved in the withdrawn or amended admission and that the costs of any additional discovery be borne in whole or part by the party seeking amendment or withdrawal.  (C.C.P. sec. 2033.300.) Permitting the withdrawal or amendment of deemed admissions is consonant with the legislative desire to encourage actual responses. (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 980.)

Objections to RFAs. The specific ground for the objection shall be set forth clearly in the response. Objections based on privilege or work-product shall be clearly stated. (C.C.P. sec. 2033.230, subd. (b).) An objection that the responding party had no “independent information” or that the RFA called for an opinion is not tenable. (Chodos v. Superior Court (1963) 215 Cal.App.2d 318, 323.)

Motion for further responses to RFAs. Within no more than 45 days after services of the verified responses to RFAs, the requesting party may move for a further response if an answer is evasive or incomplete or is without merit or too general. (C.C.P. sec. 2033.290, subd (a)(1) and (2).)

Consequence of not responding timely. A party waives all objections to the RFAs, including claims of privilege or work-product, for failing to respond timely. (C.C.P. sec. 2033.280, subd. (a).)

Relief from the failure to timely respond. On motion, the court may relieve a party from waiver if it is determined that the party subsequently served a response that is in substantial compliance with the Code and the failure to serve a timely response was the result of mistake, inadvertence or excusable neglect. (C.C.P. sec. 2033.280, subd. (a)(1) and (2).)

When a party has not responded to RFAs, the requesting party must move to have the RFAs deemed admitted. RFAs are not admissible just because they have been denied. Instead, when a party has failed to serve a timely response, “The requesting party may move for an order that the genuineness of any documents and the truth of any matters specified in the requests be deemed admitted, …” (C.C.P. sec. 2033.280, subd. (b) [“deemed admitted motion”]; St. Mary’s v. Superior Court (2014) 223 Cal.App.4th 762, 775-776.)

Defeating a “deemed admitted motion.” The “deemed admitted motion” shall be denied if the court finds that the responding party served, before the hearing on the motion, a proposed response to the RFAs that is substantially code compliant. (C.C.P. sec 2033.280, subd. (c); St. Mary’s v. Superior Court, supra, 224 Cal.App.4th at pp. 776, 778.)

Deemed admitted matters are conclusively established and are not subject to being contested through contradictory evidence. (Murillo v. Superior Court (2006) 143 Cal.App.4th 730, 736.)

Monetary sanctions for non-compliance with RFAs. Where a “deemed admitted” motion has been granted, the court must impose a monetary sanction on the party or attorney, or both, whose failure to serve a timely response to the RFAs necessitated the motion. (C.C.P. sec. 2033.280, subd. (c).)

Monetary sanctions where RFAs were denied and thereafter proved true at trial. Denial of an RFA can lead to an award of costs and attorney’s fees incurred by the propounding party in proving the truth of the denied facts at trial. (C.C.P. sec 2033.420, subd. (a).) The court is required to award those costs and fees unless it finds the party who denied the requests “had reasonable ground to believe [he or she] would prevail on the matter” or “[t]here was other good reason for the failure to admit.” (Sec. 2033.420, subd. (b)(3) and (4); Grace v. Mansourian, supra, 240 Cal.App.4th at p. 529; Labbs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1277 [in denying motion for fees, court concluded plaintiff reasonably believed she would prevail on the issues at trial].)

Judge Michael D. Marcus (Ret.)

ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0100

Copyright Michael D. Marcus, September 2016

Mediation Message No. 124

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 124

EXPERT TESTIMONY AND THE HEARSAY RULE:
GENERALIZED BACKGROUND INFORMATION VERSUS CASE-SPECIFIC FACTS

In People v. Sanchez (2016) 63 Cal.4th 665, a unanimous Supreme Court clarified what information and facts experts rely upon are and are not subject to a hearsay objection. Sanchez holds the hearsay rule applies to case-specific out-of-court statements considered by experts as true and accurate and relied upon to support their opinions, because such statements are being admitted for the truth. (Id. at p. 686.) “Case-specific facts are those relating to the particular events and participants alleged to have been involved in the case being tried.” (Id. at p. 676.) (Note: Although Sanchez is a criminal case, its holding applies to both criminal and civil cases. In criminal cases, expert testimony must also satisfy the Sixth Amendment’s Confrontation Clause.)

Sanchez found it necessary to draw a clear distinction between expert reliance on background information and case-specific facts because the courts had been using a limiting instruction that “matters admitted through an expert go only to the basis of his opinion and should not be considered for their truth.” “(U)nder this paradigm, there was no longer a need to carefully distinguish between an expert’s testimony regarding background information and case-specific facts. The inquiry instead turned on whether the jury could properly follow the court’s limiting instruction in light of the nature and amount of the out-of-court statements admitted.” However, “this paradigm was no longer tenable because an expert’s testimony regarding the basis for an opinion must be considered for its truth by the jury.” (Id. at p. 679; emphasis in the original.) Thus, case-specific out-of-court statements “must be properly admitted through an applicable hearsay exception” or, alternatively, “through an appropriate witness and the expert may assume its truth in a properly worded hypothetical question in the traditional manner.” (Id. at p. 684.)

Under Sanchez, experts may continue to rely upon background information, which is not subject to a hearsay objection. “Our decision does not call into question the propriety of an expert’s testimony concerning background information regarding his knowledge and expertise and premises generally accepted in his field. Indeed, an expert’s background knowledge and experience is what distinguishes him from a lay witness, and, as noted, testimony relating such background information has never been subject to exclusion as hearsay, even though offered for its truth. Thus, our decision does not affect the traditional latitude granted to experts to describe background information and knowledge in the area of his expertise. Our conclusion restores the traditional distinction between an expert’s testimony regarding background information and case-specific facts.” (Id. at p. 685.)

MDM’s observation: If a party asks an expert about hypothetical facts which have not yet been established by another witness, the opponent should object to that hypothetical because the underlying facts have not been established. In response, the proponent of the evidence should ask for permission to ask the hypothetical question out of order, subject to establishing later on the foundation for its admissibility. If the objection is overruled (as it probably will be), the opponent should later reassert the objection and move to strike the applicable testimony (or even move for a mistrial depending on the significance of the expert’s opinion) if the background facts for the hypothetical were not established.

Judge Michael D. Marcus (Ret.)

ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, August 2016

Mediation Message No. 123

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 123

DENIALS OF RFAs AND THEIR CONSEQUENCES

Denial of a request for admission (RFA) can lead to an award of costs and attorney’s fees incurred by the propounding party in proving those facts if that party proves the truth of the facts at trial. (C.C.P. sec 2033.420, subd. (a).) The court is required to award those costs and fees unless it finds the party who denied the requests “had reasonable ground to believe [he or she] would prevail on the matter” or “[t]here was other good reason for the failure to admit.” (Sec. 2033.420, subd. (b)(3), (4).) Grace v. Mansourian (2015) 240 Cal.App.4th 523 discusses the consequences of failing to admit certain facts prior to trial despite their obvious truth.

Defendant Mansourian, while driving, hit plaintiff’s car in an intersection. Defendant told a traffic collision investigator that when he entered the intersection the light was yellow and he believed he could make it through before the light turned red. An eyewitness told the investigator defendant ran the red light. Defendant and his mother denied plaintiffs’ RFAs that Mansourian failed to stop at the red light; that failure was negligent and was the actual and legal cause of the accident; that, as a result of the accident, plaintiff was injured and needed medical treatment and the plaintiff was not negligent. Defendants did not offer any expert testimony as to liability nor any evidence on that issue other than defendant’s testimony. Defendant testified that as he was approaching the intersection the light was green. As he got closer to the intersection the light turned yellow. Plaintiffs introduced testimony from defendant’s deposition that he originally stated he was looking at the road. He later amended his testimony to say he was focused on both the road and the signal.

Defendants’ medical expert agreed plaintiff fractured his ankle in two places as a result of the accident and the ankle surgery was necessary but also testified, contrary to plaintiff’s doctor, that plaintiff would have no future problems with his ankle and would not require additional surgery in the future. The defense doctor also agreed plaintiff had suffered a strain or sprain of his neck and back, but disagreed any neck and back pain were a result of the accident, did not believe plaintiff’s back surgery was necessitated by the accident and opined the charges for plaintiff’s neck and back surgery were too high.

The jury found defendant was negligent, awarding plaintiff just over $410,000, including approximately $147,000 for medical expenses, not quite $9,000 for lost earnings, and $255,000 for pain and suffering. It also awarded his wife $30,000 for loss of consortium. Plaintiffs then filed a motion seeking to recover costs of proof of just over $29,000 and attorney’s fees of almost $170,000 under section 2033.420 based on the defendants’ failure to admit certain requests for admissions. The trial court denied the motion, concluding defendants did have a reasonable basis to deny the requests including that the defendant driver reasonably believed he could prevail based on his memory that he did not run a red light.

The appellate court reversed the ruling for an abuse of discretion, concluding that the defendants had no reasonable basis to deny liability for plaintiff’s ankle injury and its treatment. “The question is not whether defendant reasonably believed he did not run the red light but whether he reasonably believed he would prevail on that issue at trial. In light of the substantial evidence defendant ran the red light, it was not reasonable for him to believe he would.” (Id. at p. 529.) “To justify denial of a request, a party must have a ‘reasonable ground’ to believe he would prevail on the issue. … That means more than a hope or a roll of the dice. In light of the substantial evidence defendant was at fault, plus defendants’ apparent understanding of the weakness of their position, as evidenced in their opening statement, defendants’ sole reliance on defendant (driver’s) perception he entered the intersection on a yellow light was not a reasonable basis to believe they would prevail.” (Id. at p. 532.) However, the appellate court held on the issue of damages, because defendants had stipulated to some of the medical bills and plaintiff’s loss of earnings and had presented their own medical expert on the necessity and reasonableness of the plaintiff’s medical treatment and costs, that plaintiffs were not entitled to recover their costs and fees in proving these issues. (Id. at p. 533.)

The lesson of Grace v. Mansourian is that a party, if it denies RFAs, must be prepared to present enough evidence at trial on the facts denied to be able to argue credibly to the court, in opposition to a subsequent motion for costs and fees, that he or she believed they would prevail on the facts at issue. Mansourian, who presented only his own rebutted testimony on liability, could not make that argument.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, June 2016

Mediation Message No. 122

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 122

BINDING MEDIATION

Binding mediation is a procedure in which a mediator, if the mediation is not successful, can become an arbitrator. It can occur in two ways: the parties select the neutral beforehand to mediate the dispute and, if the dispute is not resolved, agree that the neutral can render a final and binding award. Alternatively, the parties may choose, after the mediation process has broken down, to have the neutral issue an award.

The benefits of binding mediation are that mediators have more leverage than usual during the mediation phase because they will be making the final decision if a settlement is not arrived at. Binding mediation is also less costly and more expeditious than a subsequent, full-blown arbitration because the mediator, and now arbitrator, has heard much of the background facts and legal argument. For that reason, this process is more appropriate for the less complex matter. Binding arbitration also allows for partial settlement of some claims at mediation with arbitration being utilized for unresolved disputes. For example, the parties can agree on liability at mediation but use the second phase to decide damages. The parties can also design the procedure of the binding mediation. In Bowers v. Lucia (2012) 206 Cal.App.4th 724, an agreement allowing the mediator to choose the low offer of $100,000 or the high demand of $5 million (known as baseball arbitration), without any additional evidence, was upheld as mutually agreed upon and sufficiently certain. (Id. at p. 736.) On the other hand, the parties can be more exacting and require that any phase after unsuccessful settlement efforts shall include, inter alia, sworn testimony, cross-examination, the right to object to evidence and the opportunity to provide rebuttal evidence and final argument.

There are also several drawbacks to binding mediation. Mediators, if they know from the beginning that arbitration is an alternative, may be more inhibited or less involved in the mediation process because they do not want to reveal their inclinations or thinking. For the same reasons, the parties may be less likely to participate fully in the mediation. Binding mediation, as contrasted with a more formal arbitration, also has fewer safeguards – generally, few if any witnesses are sworn or testify; cross-examination, if it exists at all, is probably perfunctory and there is no opportunity to object to inadmissible evidence.

Regardless, of the nature of the binding mediation agreement, whether it be very general as in Bowers v. Lucia or much more specific, the parties must also waive in writing any conflict that may (and probably will) exist by allowing the mediator-arbitrators to rely on ex parte communications and inadmissible evidence for their final and binding award. (See Rule of Court 3.857, subd. (g) providing that mediators who, with the consent of the parties, shall arbitrate a matter which has not settled, should have the parties consent in writing to that process.)

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, May 2016

Mediation Message No. 121

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 121

AN UNUSUAL VARIATION ON THE JOINT CAUCUS

In January 2013, I looked at the evolution of the joint caucus from when I started as a mediator to the present. (Mediation Message no. 83.) Little has changed since then; if anything, a joint caucus with all of the parties and attorneys present at the beginning of a mediation is now even more anachronistic. The one exception to not having a joint caucus at the start of a mediation is if the complaint has not yet been or just been filed and there has been no or little discovery. Hopefully, the parties have shared their briefs in that instance but, if they haven’t, the joint caucus can be used to learn about material facts and legal contentions. Otherwise, the mediator will have to use valuable time at the beginning of the mediation to be a fact gatherer. Later in the mediation, a joint caucus between counsel can be helpful to discuss legal or factual contentions that have become “sticking points.”

But, in this message, I want to discuss the “parties only caucus,” in which no attorneys are present – a process I have not talked about before. I have used this type of mediation on eight or nine times over the years, all successfully. In other words, it is to be used sparingly. Examples where the approach has worked was a dispute between two very large companies where one was supplying a product to the other and the issue was over the price and delivery of the product; church members had differences over leadership of the congregation; a long-standing friend was suing his friend for wrongful termination and, in a breach of lease suit, it was obvious that a face-to-face meeting between the lessor and lessee could “clear the air.”

The following are guidelines for possible use of a “parties only caucus”:

  • Each party is represented by a person with absolute decision-making authority;
  • A stalemate in negotiations has occurred;
  • Although there is a stalemate, the negotiations have not been antagonistic;
  • The party representatives are intelligent, responsible and can approach a joint discussion dispassionately (this is a critical requirement);
  • The mediator is confident that the party representatives can objectively discuss settlement and believes that a meeting with only the parties can bring “closure”;
  • The parties are willing to meet without their attorneys being present;
  • The attorneys believe their respective clients can achieve progress in their absence and have agreed to the arrangement;
  • The mediator is in the room with the parties to remind them of the absolute confidentiality of their communications, to keep the discussion moving and to terminate the caucus if it has stalled or is not productive.

Whether a “parties only caucus” is to be suggested or used begins with the mediator. He or she should have a “gut” feeling, after having worked with the parties, that this type of meeting will work. It should not be used often, because all of the above preconditions probably will not exist. And, if there is any doubt about the utility of this type of caucus, it should not be considered and more traditional roads to settlement should be pursued. But, in the exceptional circumstance, it is one more method to bring about a resolution of a lawsuit.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, April 2016

Mediation Message No. 120

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 120

THE “EMPTY CHAIR” AND SETTLING DEFENDANTS INVOLVEMENT IN A SUBSEQUENT TRIAL

Diamond v. Reshko (2015) 239 Cal.App.4th 828 advises how a trial shall be conducted where a defendant settles with the plaintiff before trial and then agrees to participate in the trial involving a co-defendant. In Diamond, Christine Diamond was injured while riding as a passenger in a taxi that was involved in a collision with a second car. She and her husband sued Yellow Cab and the driver and owner of the second car (the Reshkos). Yellow Cab settled with the Diamonds and agreed, pursuant to a settlement provision, to participate as a party defendant at the Diamonds’ trial against the Reshkos. An order finding a good faith settlement was entered before that trial.

Before the trial began, the court excluded evidence of the Diamond-Yellow Cab settlement, including the clause in the agreement that required Yellow Cab to attend and participate in the trial. After the close of the evidence, the court denied the Reshkos’s request that Yellow Cab be precluded from addressing the Diamonds’ damages in closing arguments.

Yellow Cab’s trial counsel argued that his driver was the “less culpable” party and that Reshko was the “bad guy here.” Counsel contended that his client’s driving was not a substantial factor in causing the accident and, under the circumstances, used reasonable care. Accordingly, the attorney urged the jury to apportion only between 0 and 25 percent of the liability for the accident to his client. This attorney also recognized that the Diamonds incurred significant medical bills and other losses, and that the evidence supported a total damages award of approximately $800,000. The Reshkos’ counsel argued that the negligence of both drivers were substantial factors in causing the accident, the Diamonds were entitled to compensation for their injuries and that their damages totaled approximately $302,900.71. After a total damages award of $745,778, the jury apportioned responsibility of 40 percent to Yellow Cab and 60 percent to the Reshkos. The trial court entered a judgment holding the Reshkos liable to the Diamonds for $406,698, plus fees and costs.

Relying on Pellett v. Sonotone Corp. (1945) 26 Cal.2d 705, 713 and Everman v. Superior Court (1992) 8 Cal.App.4th 466, 473, Diamond found it was not improper for the plaintiffs to require Yellow Cab, the settling party, to participate in the trial to prevent the Reshkos, the nonsettling defendants, from making an “empty chair” argument by ascribing “fault to an actor who is not present to defend himself.” (At p. 844.) However, where a settlement requires such participation, Diamond also holds that “the settling defendant’s position should be revealed to the court and jury to avoid committing a fraud on the court, and to permit the trier of fact to properly weigh the settling defendant’s testimony,” (id.) unless the court were to find that such disclosure would create a substantial danger of undue prejudice. (At p. 843.) “Without this evidence, the jury is prevented from fully assessing the motivations of both the plaintiff and the settling defendant, and from properly weighing the credibility of their witnesses.” (At p. 845.)

The appellate court found that exclusion by the trial court of the Diamond-Yellow Cab settlement, including the clause in the agreement that required Yellow Cab to attend and participate in the trial, was an abuse of discretion and reversed the judgment on behalf of the Diamonds.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, March 2016

Mediation Message No. 119

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 119

AVOIDING DISMISSAL UNDER THE FIVE-YEAR RULE

The five-year rule, tolling, stay orders, stipulations and certainty/uncertainty are the core subjects of Gaines v. Fidelity National Title Insurance Co. (February 25, 2016; Cal. Supreme Ct.) S215990; 2016 DJDAR 1909. Contrary to the legal headlines, mediation plays only a small part in the discussion. Essentially, Gaines is a primer on the necessary steps to prevent the running of the five-year trial rule and resulting dismissal pursuant to C.C.P. sec. 583.310.

In Gaines, a 5-2 majority held that dismissal under sec. 583.310 was not tolled by a trial court order, entered pursuant to the parties’ agreement striking the trial date and staying the proceedings for 120 days, while they engaged in mediation and completed all outstanding discovery. Although a court stay following an express stipulation from the parties staying all proceedings for an agreed-upon period in a case will toll the running of the statute for the length of that stay (see sec. 583.340, subd. (b)), Gaines noted that a continuance generally does not have the same effect. Relying upon Bruns v. E-Commerce Exchange, Inc. (2011) 51 Cal.4th 717, 722, Gains holds that “’the prosecution of an action is stayed under subdivision (b) only when the stay encompasses all proceedings in the action.’” (Emphasis added.) In the instant matter, mediation and completion of outstanding discovery reflected that the prosecution of the matter was still ongoing and the stay, as a result, was only a partial and not a complete one. (Note that under C.C.P. sec.1775.7, subd. (b), mediations continuing into or beginning after the last six months of the five-year period toll the period beginning on the date four years and six months after plaintiff has filed the action and ending when the mediator files a statement of nonagreement.)

Section 583.340, subd. (c) also provides that a trial court will exclude any time when it was “impossible, impracticable, or futile” to bring the case to trial. Gaines found that the court order striking the trial date did not “create a circumstance of impracticability because plaintiff agreed to it, remained in control of the circumstances, and made meaningful progress towards resolving the case during the stay period.” (The dissent observed it is difficult to meaningful progress towards resolving a case during a stay when only outstanding discovery was to be completed.)

Unlike mediation, which the majority in Gains found to be an event inside a lawsuit and, therefore, does not abate a proceeding, the case holds that contractual arbitration tolls the five-year period under section 583.340, subd. (b).

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, February 2016

Mediation Message No. 118

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 118

EXPEDITED JURY TRIALS ARE MANDATORY FOR CASES UNDER $25,000

The voluntary Expedited Jury Trial Act (Code of Civil Procedure §§ 630.01 – 630.10), in effect for the last five years, is now permanent, as of January 1, 2016. More importantly, the Act is mandatory as of July 1, 2016 (until January 1, 2019, unless otherwise extended by the legislature) where the amount in controversy does not exceed $25,000, subject to the following nine exceptions: punitive damages are sought; damages in excess of insurance policy limits are sought; a party’s insurer is providing a defense subject to a reservation of rights; the case involves a claim reportable to a governmental entity; the case involves a moral turpitude claim that may affect an individual’s licensing; there is a claim of intentional conduct; one of the parties has filed a pleading that changes the jurisdictional classification from limited to unlimited; there is a claim for attorney’s fees, unless those fees are pursuant to a contract or, lastly, the court finds good cause not to require an expedited trial. Additionally, mandatory trials are not available in forcible retainer or unlawful detainer actions.  (See §§ 630.20 et seq.)

The procedures for mandatory expedited trials are similar to those for voluntary expedited trials except that verdicts in mandatory trials are appealable, each side is permitted four peremptory challenges instead of the three for voluntary trials and each side has five rather than three hours to try its case. The following are the procedures for both voluntary and mandatory expedited jury trials, except where noted in italics:

  • Assignment of judges is at the discretion of the presiding judge and precludes temporary judges requested by the parties. (Rule 3.1546.)

  • A consent order consisting of a waiver of right to appeal and post-trial jury motions (e.g., directed verdict; set aside the verdict; inadequate or excessive damages) shall be submitted by the parties to the court at least 30 days before the scheduled trial date. (CCP § 630.08; Rule 3.1547(a)(1).) The order, which shall be signed by all parties and their counsel, includes representations that the parties and their insurers have been informed of the applicable rules and procedures. (CCP § 630.03(a),(e).) The consent order is binding on the parties absent a later stipulation of all of the parties or a court order that good cause exists for the action not to proceed as an expedited jury trial. (CCP § 630.03(b),(f).) Pursuant to §§ 630.20(d) and 630.26(b), judgments in mandatory expedited trials are appealable.
  • Modifications of the Act’s rules and provisions are permitted if agreed to by all parties and the court. (CCP §§ 630.02(a); 630.23(d); Rule 3.1547(b).)
  • Exchange 25 days before trial witness lists, exhibits (excluding witnesses and exhibits for impeachment or rebuttal), copies of recorded materials, lists of depositions, motions in limine, proposed instructions, proposed jury verdict forms and juror questionnaires. (Rule 3.1548(b).) Failure to serve the exhibits in advance is grounds for their preclusion at trial unless good cause can be shown for the failure. (Rule 3.1548(e).)
  • Motions in limine shall be filed 20 days before trial. (Rule 3.1548(d).)

  • A pretrial conference will be held 15 days before trial. (Rule 3.1548(f).) Matters to be addressed include objections to previously submitted documentary, jury questionnaires, jury instructions, special verdict forms and the allocation of time for each party’s case.
  • Subpoenas and notices to appear to secure the attendance of witnesses or the production of documents at trial shall be in accordance with the CCP. (CCP § 630.25(c).)

  • High/low agreements governing damages, which are not disclosed to the jury, are permitted but not required. (CCP § 630.01(b); Rule 3.1547(a)(2).)
  • Voir dire is limited to one hour, with 15 minutes for the judicial officer and 15 minutes for each side. (Rule 3.1549.) Each side has three peremptory challenges, with the possibility that one additional challenge may be granted to each side in multiparty cases. (CCP § 630.04(b).) In mandatory expedited trials, the parties have five hours, including voir dire, to complete their cases. (Section 630.23(a).) In mandatory cases, each side shall have four peremptory challenges, unless the court permits an additional challenge in cases with more than two sides. If there are more than two parties in a case and more than two sides, the parties may request one additional peremptory challenge each, which is to be granted by the court as the interests of justice may require. (Section 630.20(c).)
  • The jury is composed of eight persons, unless the parties agree to fewer jurors. There are no alternates. (CCP § 630.04(a).) In mandatory trials, the jury is composed of 8 jurors and one alternate unless the parties have agreed to fewer jurors. (CCP § 630.23(b).)

  • Presentation of the case is limited to three hours per side, including opening statement, cross-examination and closing argument, unless the court finds good cause for additional time. (Rule of Court 3.1550.)  The use of stipulations and evidentiary summaries are encouraged. (Rules 3.1551(a), (c); 3.1552(a).) In mandatory cases, the parties have five hours, including voir dire, to complete their respective cases. (CCP § 630.23(a).)
  • Traditional rules of evidence apply unless the parties stipulate otherwise. (CCP § 630.06(a).) Privileges affecting confidentiality cannot be limited by stipulations. (CCP § 630.06(b).)
  • The jury verdict is binding, subject to any written high/low agreement or other stipulations between the parties. (CCP § 630.07(a).) A vote of six of the eight jurors is required, unless the parties stipulate otherwise. (CCP § 630.07(b).) A jury may deliberate as long as needed. (CCP § 630.05.)
  • Costs and attorney’s fees statutes and rules that apply in limited civil cases, apply as well in mandatory expedited jury trials, unless the parties stipulate otherwise. (CCP §620.27.)
  • Post-trial motions and appeals, in voluntary expedited trials, are limited to those to correct a judgment for clerical error, to enforce a judgment and for costs and attorney’s fees (CCP § 630.09(c)) or for a new trial because of alleged misconduct of the judicial officer or jury or corruption, fraud or other undue means employed in the proceedings. (CCP § 630.09.)

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, January 2016

Mediation Message No. 117

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 117

THE SIXTH ANNUAL YEAR-END REVIEW

This year’s Mediation Messages combined observations about mediation, procedural case law that impacts litigation or settlement, ethical mandates for attorney behavior and one case about tactics. Refer to the Mediation Messages identified below on my website (www.marcusmediation.com) if the following summaries are not sufficient.

Mediations

Amis v. Greenberg Traurig LLP (2015) 235 Cal.App.4th 331 (discussed in Mediation Message no. 108) reminded that Cassel v. Superior Court (2011) 51 Cal.4th 113 is still the law regarding the impact of mediation confidentiality. Cassel holds that mediation confidentiality includes all communications at or in preparation for mediation between clients and their attorneys and, as a consequence, clients cannot sue their counsel for alleged acts of malpractice committed during mediation.

Mediation Message no. 111 looked at the principles behind successful mediations: clients are prepared; timely and interesting briefs have been submitted; briefs have been shared with opposing counsel; essential parties are at the mediation; cases have been properly evaluated and  necessary files and documents are at the mediation.

In Mediation Message no. 114, I provided irreverent interpretations of frequent comments by attorneys at mediation, such as, “They’re not here in good faith;” “We expect significant movement from (the opposing party);” “We don’t want to send the wrong signal” and “I’m not bidding against myself.”

Procedural Case Law

Two California Supreme Court and two appellate court cases provided important interpretations regarding negative responses to requests for admissions, the interrelationship between motions for relief from default and motions for reconsideration, the statute of limitations for conversion in legal malpractice and the use of judicial notice in demurrers.

Mediation Message no. 106 discussed Gonsalves v. Li (2015) 232 Cal.App.4th 1406 which held that parties cannot be examined about their denials to requests for admission. Instead, the remedy, when a party denies an RFA, is to prove the truth of the matter, pursuant to C.C.P. sec. 2033.420, and then “move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney’s fees.”

As discussed in Mediation Message no. 112, Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830 holds that when a second motion to vacate a default under C.C.P. section 473(b) is necessary because the first such motion has been denied, the second motion must comply with C.C.P. section 1008, which imposes special requirements on renewed applications for orders a court has previously refused, including that the party shall submit an affidavit showing what “new or different facts, circumstances, or law are claimed” to justify the renewed application, and to also show diligence with a satisfactory explanation for not earlier having presented the new or different information.

Lee v. Hanley (2015) 61 Cal.4th 1225 was analyzed in Mediation Message no. 113. This case holds that an attorney’s refusal to return a former client’s money upon demand does not come within the one-year statute of limitations in C.C.P. sec. 340.6, subd. (a) if the refusal can be construed as a conversion and, therefore, was not part of the attorney’s professional services.

Mediation Message no. 116 discussed Richtek United States v. Upi Semiconductor Corp. (Ct. of Appeal, Nov. 24, 2015) case no. H039519, 2015 DJDAR 12667, 2015 Cal. App. LEXIS 1057, which holds that judicial notice of documents in a demurrer is dispositive only when  the facts in the documents are not in dispute with the allegations in the complaint, which must be accepted as true. If they are in dispute, the demurrer must be denied.

Attorney behavior

While Mediation Message no. 109 noted that there is no specific ethical rule requiring attorneys to honor agreements with each other, it can be extrapolated from Bryant v. State Bar (1942) 21 Cal.2d 285 and Grove v. State Bar (1965) 63 Cal.2d 312 that the obligation exists in certain situations. Mediation Message no. 110 noted that both Business and Professions Code 6068, subd. (d) and Rule of Professional Conduct 5-200(B) prohibit attorneys from making misrepresentations to a judicial officer. These standards reflect the policy that “Honesty in dealing with the courts is of paramount importance, and misleading a judge is, regardless of motives, a serious offense.” Lastly, Mediation Message no. 115 reminded trial lawyers that a simple objection to misconduct, even if sustained, will not be sufficient to protect the record. In addition to making a timely objection, counsel must also request that the jury be admonished to ignore the misconduct. Otherwise, the appellate court will most probably disregard the misconduct.

Tactics

As noted in Mediation Message no. 107 and People v. Carter (2014) 227 Cal.App.4th 322, a trial judge’s remarks that “reflect a misapprehension of the law upon which that ruling is based” may be the grounds for reversing the judge’s ruling. Carter, thus, teaches two lessons – don’t be afraid to ask questions of the trial court because the judge’s comments can both guide you and be the basis for reversal if they are legally incorrect. Also, those comments will be forever lost if a court reporter is not present.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, December 2015

Mediation Message No. 116

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 116

DEMURRERS AND JUDICIAL NOTICE

Richtek United States v. Upi Semiconductor Corp. (Ct. of Appeal, Nov. 24, 2015) case no. H035519, 2015 DJDAR 12667, 2015 Cal. App. LEXIS 1057 presents an object lesson on the use of judicial notice in ruling on demurrers to complaints.

In 2007, in Taiwan, Richtek, a Taiwanese corporation that designs, markets and sells power management integrated circuit products, sued Upi, a Taiwanese company, and eleven individuals, both civilly and criminally, alleging that Respondents misappropriated Richtek’s trade secrets. Richtek filed the present case in Santa Clara County on January 28, 2011, alleging trade secret misappropriation against Upi and some of the same individuals in the Taiwanese actions. Respondents demurred to the complaint on the ground that the claims were time-barred under Taiwan’s statute of limitations for trade secret misappropriation. After the trial court granted Respondents’ request to take judicial notice of the Taiwan Trade Secrets Act and Richtek’s 2007 criminal and civil complaints in Taiwan, it sustained the demurrer with leave to amend because the two 2007 complaints demonstrated that Richtek had knowledge of Respondents’ alleged 2007 misappropriation.

Richtek filed an amended complaint adding allegations of recent discoveries of the full scope of the continuing misappropriation of its trade secrets. Respondents demurred to the amended complaint, arguing that the claims were still barred by the Taiwan statute of limitations. The trial court sustained the demurrer without leave to amend, and ordered judgment for the Respondents, finding that Richtek’s allegations of recent discoveries of further misappropriation did not change the fact that Richtek knew of the misappropriation and the identity of the liable parties in 2007.

The appellate court reversed the judgment of dismissal, finding that the use of judicially noticed documents in ruling on a demurrer is proper only when the documents are not used to determine disputed factual issues. The court held that, while it was proper for the trial court to judicially notice the Taiwanese complaints, it was not proper to use the allegations in those complaints to resolve factual disputes for purposes of the demurrer. It reasoned, “the trial court did not take notice of the existence of the complaints; rather, it used the complaints to resolve the disputed issue of when appellants had knowledge of respondents’ misappropriation of trade secrets for purposes of the statute of limitations,” which supposed knowledge was contrary to the allegations in the amended complaint and which allegations must be accepted as true for purposes of evaluating a demurrer. In other words, “’”judicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.’”

MDM’s observation: Demurrers are often used to test an applicable statute of limitations regarding claims for breach of contract and some torts as well as legal and professional malpractice. The effectiveness of those demurrers, when judicial notice of certain documents is requested, depends on the facts alleged in the complaints; as held in Richtek, judicial notice will be dispositive only when the facts in the documents are not in dispute with the allegations in the complaint, which must be accepted as true. If they are in dispute, the demurrer must be denied.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, November 2015