Posts Tagged ‘year-end reviews’

Mediation Message No. 128

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO.  128

SEVENTH ANNUAL YEAR-END REVIEW

This year’s Mediation Messages and Arbitration Insight combine observations about mediation, procedural law that impacts litigation or settlement, expert testimony, rules of evidence at arbitration and trial tactics. Refer to the Mediation Messages identified below on my website (www.marcusmediation.com) if the following summaries are not sufficient.

MEDIATION

The parties only caucus (April – Mediation Message no. 121): This is a process in which no attorneys are present. It should be used sparingly where the mediator believes a meeting between responsible and mature principles can “clear the air.”

Binding mediation (May- Mediation Message no. 122): This is a procedure in which a mediator, if the mediation is not successful, can become an arbitrator. It can occur if the parties select the neutral beforehand to mediate the dispute and, if it 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.

Mediation briefs should be shared (October – Mediation Message no. 126): In most instances, mediation briefs should be shared before the commencement of mediation. The only sound reason for not exchanging a mediation brief is if it contains either a fact (perhaps a smoking gun) or a legal tactic (discovery or motion) that should be held in abeyance. But that’s easily resolved; if you don’t want the opponent to know about facts, legal theories or arguments that are best held in reserve, put them in a separate, confidential brief for the mediator and provide the known facts and contentions in a non-confidential memorandum.

Mediator’s proposals (November – Mediation Message no. 127): This message discussed what the mediator’s proposal is, when it should be made, whether it should be made if a party does not consent to the process, whether it should be oral or written, when it should be answered, whether it is binding, what happens if both parties don’t accept it and the options if both parties don’t accept it.

PROCEDURAL LAW

Expedited jury trials (January – Mediation Message no. 118): The voluntary Expedited Jury Trial Act (Code of Civil Procedure §§ 630.01 – 630.10)  is now permanent  and mandatory until January 1, 2019, 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.

The five-year rule (February – Mediation Message no. 119): Gaines v. Fidelity National Title Insurance Co. (2016) 62 Cal4th 1081 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. Unlike mediation, which the majority in Gaines 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).

Denials of RFAs and their consequences (June – Mediation Message no. 123): 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. The lesson of this case 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.

Significant policy and procedural requirements of RFAs (with statutory can case law support )(September – Mediation Message no. 125): RFAs are used to expedite the trial process; their scope is broad; the responding party has a duty to investigate RFAs; responses to RFAs must be specific; a party may withdraw or amend an admission in response to an RFA only on leave of court after notice to all parties; the specific ground for an objection to an RFA shall be set forth clearly in the response; a requesting party may move for a further response if an answer is evasive, incomplete, without merit or too general; a party waives all objections to the RFAs, including claims of privilege or work-product, for failing to respond timely; on motion, the court may relieve a party from waiver if certain showings are made; RFAs are admissible at trial if the moving party requests an order that the requests be deemed admitted; 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; deemed admitted matters are conclusively established and are not subject to being contested through contradictory evidence; where a “deemed admitted” motion has been granted, the court must impose a monetary sanction whose failure to serve a timely response to the RFAs necessitated the motion and, unless the court 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,”  it must impose monetary sanctions for denial of RFAs found true at trial.

TRIAL TACTICS

The empty chair at trial (March – Mediation Message no. 120): 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. 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.” (Id. at p. 844.)

Expert testimony and the hearsay rule (August – Mediation Message no. 124): 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.)

ARBITRATION

Rules of evidence at arbitration (July – Arbitration Insight no. 25): The applicable arbitration agreement, if there is one, should govern the manner in which the arbitration is to be conducted. If there is neither an agreement nor specified procedure, the parties should decide how they want the arbitration to be administered. If they cannot agree, arbitrators should advise the parties before the arbitration begins that the hearing, including the application of the rules of evidence, can be formal or informal; it is up to the individual parties to decide whether they wish to object to evidence and, if there are objections, the arbitrators will rule on all objections as they are made.

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 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. 105

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 105

THE FIFTH ANNUAL YEAR-END REVIEW

Once again, I’m summarizing the subjects I wrote about in the previous eleven months. This year’s Mediation Messages focused essentially on substantive and procedural subjects that impact a case or settlement, rather than mediation, itself, because the courts and legislature did very little in 2014 to effect how mediations are or should be conducted. Refer to the Mediation Messages identified below on my website (www.marcusmediation.com) if the following summaries do not suffice.

*****

Certainteed Corporation v. Superior Court (2014) 222 Cal.App.4th 1053, as discussed in Mediation Message no. 94 (January 2014), held that the power of the court as provided in Code of Civil Procedure section 2025.290 to allow additional time for a seven-hour deposition if needed to fairly examine the deponent or if the deponent or another person has impeded or delayed the examination applies, as well, for an extension of the 14-hour limitation in complex cases where a doctor has declared that the deponent may not live beyond six months.

*****

Mediation Messages nos. 95 and 96 (February and March 2014) reviewed the case law regarding enforcement of settlements, pursuant to Code of Civil Procedure section 664.6. Number 95 focused on the importance of not allowing the trial court to lose jurisdiction to enforce a settlement. Number 96 examined the subtleties of enforcing a settlement under section 664.6.

*****

Mediation Message No. 97 (April 2014) looked at Rouland v. Pacific Specialty Ins. Co. (2013) 220 Cal.App.4th 280 which held that that the language of accepting a Code of Civil Procedure section 998 offer to compromise need not strictly follow the language of the statute.

*****

Attorney’s fees and the tort of another were addressed in Mediation Message no. 98 (May 2014). The “tort of another,” which allows parties their attorney’s fees if required to employ counsel to prosecute or defend an action against a third party because of a defendant’s tort, is an established exception to the American rule that, except as provided by statute or agreement, parties to litigation must pay their own attorney’s fees. (Prentice v. North American Title Guaranty Corp. (1963) 59 Cal.2d 618, 620.) Mega RV Corporation v. HWH Corporation (2014) 225 Cal.App.4th 1318 reminds that the existence of an underlying tort by a defendant is a basic requirement for applying the tort of another.

*****

Mediation Message no. 99 (June 2014) looked at Chodos v. Borman (2014) 227 Cal.App.4th 76 which discourages multipliers in fee applications by prevailing attorneys when an attorney’s payment of fees is not contingent upon the success of the case and the underlying case is unremarkable. The opinion also appears to frown upon multipliers when the lodestar, itself, is already substantial.

*****

The application of the anti-SLAPP commercial speech exemption to litigation involving Yelp, the online public rating business, was the focus of Mediation Message no. 100 (July 2014). Demetriades v. Yelp (2014) 228 Cal.App.4th 294 held that Code of Civil Procedure section 425.15 did not apply where Demetriades, the owner of three restaurants, sued Yelp for unfair competition and false advertising because its claims about the abilities of its filtering system were untrue and misleading, including the allegations that Yelp did not use its filter software to give consumers the most trusted reviews, did not accurately separate the most trustworthy reviews from unreliable reviews and did not post reviews only from trusted sources.

*****

In re Marriage of Daly and Oyster (2014) 228 Cal.App.4th 505 was the only California decision this year that focused on mediations. As analyzed in Mediation Message no. 101 (August 2014), Daly and Oyster reminded that settlement agreements at mediation, if they contain the appropriate language, can be admissible in subsequent proceedings, notwithstanding Evidence Code section 1119, subd. (b), which states, in substance, that no writing prepared for, in the course of  or pursuant to a mediation is admissible or subject to discovery.

*****

Mediation Message no. 102 (September 2014) noted that, effective January 1, 2015, attorneys will be able to once again move for monetary sanctions as a result of opposition bad faith tactics, pursuant to Code of Civil Procedure section 128.5.

*****

Mediation Message no. 103 (October 2014) provided a new twist to the old hoary topic of civility. Because little has been done to correct the problem, despite a lot of rhetoric to the contrary, and rather than repeat aspirational but otherwise unenforceable bromides which don’t help at all, I referenced Kirsch v. Duryea (1978) 21 Cal.3d 303 and Tenderloin Housing Clinic, Inc. v. Sparks (1992) 8 Cal.App.4th 299 which hold that lawyers should respect one another. Kirsch states, “In addition to competing strategies, an attorney is often confronted with clashing obligations imposed by our system of justice. An attorney has an obligation not only to protect his client’s interests but also to respect the legitimate interests of fellow members of the bar, the judiciary, and the administration of justice.” (Id. at p. 309; accord, In re Marriage of Flaherty (1982) 31 Cal.3d 637, 647.) Tenderloin emphasizes the above rule and then notes that it “makes it obvious that even if a legal step taken or legal procedure pursued has justification in law, the timing thereof may be oppressive and may constitute harassment if it unjustifiably neglects or ignores the legitimate interest of a fellow attorney.” (Id. at p. 306.)

*****

Determining the prevailing party in a Code of Civil Procedure section 1717 motion is not always easy. The essential lesson of Karton v. Dougherty (2014) 231 Cal.App.4th 600, which is discussed in Mediation Message no. 104 (November 2014), is that, when moving to collect fees and costs under section 1717, pursuant to a contract claim, make certain that the trier of fact has found that you prevailed on the contract claim.

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 2014

Mediation Message No. 93

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 93

THE FOURTH ANNUAL YEAR-END REVIEW

Once again, I’m summarizing the mediation and arbitration topics I wrote about in the previous eleven months. Before discussing them, thank you for your support in helping me to be honored by the Daily Journal as a Top 50 California Neutral for the sixth time in the last seven years.

This year’s Mediation Messages started with an analysis of two true mediation topics (the joint caucus and binding mediation) but then segued into substantive, evidentiary and procedural subjects that impact the value of a case and, thus, settlement – which, of course, is the raison d’etrê of mediations. Refer to the Mediation Messages or Arbitration Insights identified below on my website (www.marcusmediation.com) if the following summaries do not suffice.

*****

The evolution of the joint caucus was discussed in Mediation Message no 83 (January 2013).  The practice of holding a joint caucus at the beginning of every mediation has now been replaced by separate caucuses. Nonetheless, a joint caucus at the beginning of mediation can be helpful if a complaint has not yet been or just been filed and there has been no or little discovery. A joint caucus later in mediation can be useful when discussions have bogged down regarding a factual or legal issue and the mediator believes that the best way to break this impasse is to have the attorneys get together to clarify or explain their respective positions.

*****

In Mediation Message No, 84 (February 2013), I looked at binding mediation, in which a neutral, by agreement of the parties, makes a binding determination regarding the dispute after an unsuccessful mediation. The process was sanctioned in Bowers v. Lucia Companies (2012) 206 Cal.App.4th 724. Although binding mediation may be an appropriate remedy to settle a case, before initiating that process, the parties should require the agreed-upon neutrals to disclose all potential conflicts and make sure that they, too, have waived the conflict that mediators, and about to be arbitrators, might be influenced by argument that they heard in separate mediation caucuses. The better process is to not have the same person mediate and arbitrate a matter.

*****

The reemergence of the fraud exception to the parol evidence rule was the subject of Mediation Message no. 85 (March 2013). Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169 overruled Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258, which had limited the fraud exception to the parol evidence rule to evidence that “must tend to establish some independent fact or representation, some fraud in the procurement of the instrument or some breach of confidence concerning its use, and not a promise directly at variance with the promise of the writing.” (Id. at p. 263.) In invalidating Pendergrass’s  narrow application of parol evidence when fraud has been alleged, Riverisland reaffirmed the maxim “’[I]t was never intended that the parol evidence rule should be used as a shield to prevent the proof of fraud.’” (Ibid.)

*****

Judicial admissions were discussed in Mediation Message no. 86 (April 2013). Dang v. Smith (2010) 190 Cal.App.4th 646 advises that “statements in a pleading are always admissible against the pleader to prove the matter asserted — as is any other statement by a party.” (Id. at p. 657.) Barsegian v. Kessler & Kessler (2013) 215 Cal.App.4th 446 applied a narrower interpretation to such admissions, observing that “not every factual allegation in a complaint automatically constitutes a judicial admission.” Instead, Barsegian noted that “a judicial admission is ordinarily a factual allegation by one party that is admitted by the opposing party. The factual allegation is removed from the issues in the litigation because the parties agree as to its truth. Thus, facts to which adverse parties stipulate are judicially admitted. (Citation.) Similarly, in discovery when a party propounds requests for admission, any facts admitted by the responding party constitute judicial admissions. (Citation.) And when an answer admits certain factual allegations contained in a complaint or cross-complaint, those facts are likewise judicially admitted. (Citation.)” (Id. at p. 451.) Barsegian’s analysis misses the point that judicial admissions may also occur when a party’s legal language is inconsistent with a previously held position and thus is “conclusively deemed true.” (Dang v. Smith, supra, at p. 657.) Therefore, the defendant in Dang could use the plaintiff’s allegation in the complaint to its benefit, without having to admit or stipulate to it (as Barsegian so holds), because the plaintiff had taken a position inconsistent with a previous claim.

*****

The five-year deadline to try a case (see Mediation Message no. 87 [May 2013]) was not a factor in the halcyon days of adequate court-funding. But, with recent budget shortfalls, it is again a potential issue, which makes Gonzalez v. County of Los Angeles (2004) 122 Cal.App.4th 1124 worth considering. Gonzalez holds that the five-year deadline is tolled when the action is submitted to mediation during the last six months of the five-year period.

*****

Multiple Code of Civil Procedure section 998 settlement offers was the subject of Mediation Message no. 88 (June 2013). Martinez v. Brownco Construction Co. (2013) 56 Cal.4th 1014 held that a party can recover its expert fees incurred from the date of a first 998 offer when it then makes another such offer and the opposing party does not accept either offer. Martinez reminded that the trial court can address any concerns it may have when considering what post- 998 offer expert fees to award if a successful section 998 offer “results in mischief or confusion, or any gamesmanship appears.” (Id. at pp. 1026-1027.)

*****

Stipulations for judgment were the subject of Mediation Message no. 89 (July 2013) since they are often incorporated as terms in settlement documents. Greentree Financial Group, Inc. v. Executive Sports, Inc. (2008) 163 Cal.App.4th 495 holds that such stipulations cannot include unenforceable penalties and that “The amount set as liquidated damages ‘must represent the result of a reasonable endeavor by the parties to estimate a fair average compensation for any loss that may be sustained.’” (Id. at p. 499.) Greentree does not hold, as is commonly believed, that stipulations for judgment cannot provide for the amount of damages requested in a complaint. The case states only that the amount of the judgment must bear a reasonable relationship to any actual damages that might flow from the defendant’s failure to comply with the stipulation’s financial terms.

*****

Mediation Message no. 90 (August 2013) offered thoughts on how “other conduct” evidence (see Evid. Code section 1101, subd. (b)) can be used to prove or disprove material allegations at trial. It is important to note that such evidence may be used by both plaintiffs and defendants and, interestingly, may be admissible, according to Johnson v. United Cerebral Palsy/Spastic Children’s Foundation (2009) 173 Cal.App.4th 740, simply by arguing that it is relevant and not prejudicial pursuant to Evid. Code section 352. (Id. at p. 767.)

*****

Mediation Message no. 91 (September 2013) was about human frailties, including greed, bad judgment and overreaching. In Ellis v. Toshiba America Information Systems, Inc. (2013) 218 Cal.App.4th 853, a plaintiff’s attorney, after the settlement of a consumer class action, first asked for over $24 million in fees and then almost $13 million in fees and costs. The trial court, with the appellate court affirming, awarded the attorney nothing in fees and sanctioned her $165,000 because her billing records were inconsistent and contained omissions, the total number of hours claimed was excessive, her efforts to promote the fee claim were self-serving and not for the benefit of the class and she had been unprofessional in fighting discovery of her time records.

*****

Arbitration Insight no. 24 (October 2013) analyzed Mt. Holyoke Homes, LP, et al. v. Jeffer Mangels Butler & Mitchell, LLP (2013) 219 Cal.App.4th 1299, which holds that arbitrators must disclose references of parties to arbitrations on the arbitrators’ web sites or resumes. According to Mt. Holyoke, the age of the reference, that the person being referenced had no professional relationship with the arbitrator and that the reference was discoverable on the internet are irrelevant. Instead, “An objective observer reasonably could conclude that an arbitrator listing a prominent litigator as a reference on his resume would be reluctant to rule against the law firm in which that attorney is a partner as a defendant in a legal malpractice action.” (Id. at p. 1313.) At the time this summary was written, the California Supreme Court had not yet indicated whether it would grant a hearing in Mt. Holyoke.

*****


Early settlement demands and an insurer’s duty to settle were the subjects of Mediation Message no. 92 (November 2013). The need for specific settlement demands, as contrasted with generalized settlement comments to an insured’s attorney or carrier, was made clear in Reid v. Mercury Ins. Co. (2013) 220 Cal.App.4th 262, which holds that an insurer has no duty to settle with a third party, and thus no liability to its insured for the bad faith failure to settle, until there has been a settlement demand or “any other manifestation the injured party is interested in settlement.” (Id. at p. 266.) “For bad faith liability to attach to an insurer’s failure to pursue settlement discussions, in a case where the insured is exposed to a judgment beyond policy limits, there must be, at a minimum, some evidence either that the injured party has communicated to the insurer an interest in settlement, or some other circumstance demonstrating the insurer knew that settlement within policy limits could feasibly be negotiated. In the absence of such evidence, or evidence the insurer by its conduct has actively foreclosed the possibility of settlement, there is no ‘opportunity to settle’ that an insurer may be taxed with ignoring.” (Id. at p. 272.)

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 2013

Mediation Message No. 82

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 82

THE THIRD ANNUAL YEAR-END REVIEW

For the third year in a row, I’m reviewing the mediation and arbitration topics I wrote about in 2012. Before discussing them, thank you for your support in helping me to be honored as a Top 50 California Neutral by the Daily Journal for the fifth time in the last six years.

I wrote about arbitration issues for the first three months of the year. In Arbitration Insight No. 21 (January 2012), I discussed Service Employees International Union, Local 1021 v. County of San Joaquin (2011) 202 Cal.App.4th 449, which held that a disciplined employee’s contractual claim for relief at arbitration survives despite his or her retirement. The more important topic of arbitration waivers was the subject of Arbitration Insight No. 22 (February 2012). Generally, waiver occurs where “the party seeking to compel arbitration has previously taken steps inconsistent with an intent to invoke arbitration,” “unreasonably delayed in undertaking the procedure” or acted in “bad faith” or engaged in “wilful misconduct.” (Davis v. Blue Cross of Northern California (1979) 25 Cal.3d 418, 425-426.) Finally, Arbitration Insight No. 23 (March 2012) looked at Rosenson v. Greenberg Glusker Fields Claman & Machtinger LLP (2012) 203 Cal.App.4th 688, which held that if a client has opted to engage in the nonbinding MFAA process, and should the attorney be dissatisfied with the result, the attorney can demand arbitration, without first moving to compel it, if there is an existing written agreement with the client to arbitrate all fee and costs disputes. Without that agreement, the attorney’s remedy is to file a complaint for fees.

Attorney and mediator pet peeves were covered in Mediation Messages 74 and 75 (April and May 2012). Attorney pet peeves included mediators not respecting lawyers’ evaluations of the latters’ cases; being passive rather than active; failing to communicate offers and demands; giving up too soon; divulging, without consent, a party’s negotiated position and failing to follow up when cases do not settle. The most common complaints of mediators are attorneys not filing timely mediation briefs; not sharing their mediation briefs with opposing counsel; being unprepared at the mediation; making unreasonable demands and offers and not having persons with settlement authority at the mediations.

Once again, there was a dearth of significant events regarding federal mediation. However, Mediation Message No. 76 (June 2012) noted that Ninth Circuit Chief Judge Alex Kozinski issued a short but sharp rebuke in Nordyke v. King (9th Cir. 2012) 676 F.3d 828 of the en banc panel’s order that the parties mediate a long-running dispute concerning the right to bear arms.

Since knowledge (i.e. adequate discovery) of an opponent’s case is an integral part of mediation preparation, I discussed Coito v. Superior Court (2012) 54 Cal.4th 480 in Mediation Message No. 77 (July 2012). Coito holds, depending on the circumstances, that either absolute or qualified work product protection applies to witness statements obtained by attorneys or their agents. To a lesser extent, the doctrine also protects the identities of those same witnesses.

Staying with the theme of mediation preparation, I reminded attorneys in Mediation Message No. 78 (August 2012) to discuss with clients before (and not during) mediation the financial costs of ongoing discovery, possible motions and eventual trial or arbitration if their cases should not settle.

Mediation Message No. 79 (September 2012) reprised the proven premise, as originally discussed in Mediation Message No. 70 (July 2011), that newer empirical studies have further established that settling rather than going to trial makes statistical sense.

October’s and November’s Mediation Messages (Nos.  80 and 81) analyzed the use of brackets and mediator’s proposals in negotiating settlements.

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 2012

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 by going to the articles link on the website.

Mediation Message No. 73

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 73

THE SECOND ANNUAL YEAR-END REVIEW

Like last year, I’m summarizing the mediation and arbitration topics I wrote about in 2011. Before discussing them, thank you for your support in helping me to be honored by the Daily Journal for the fourth time in the last five years as a Top 50 California Neutral.

Mediation confidentiality was the big news this year. Cassel v. Superior Court (2011) 51 Cal.4th 113 held that attorneys cannot be sued for what they said or did in a mediation. The Ninth Circuit provided its own spin on mediation confidentiality by holding in The Facebook, Inc. v. Pacific Northwest Software, Inc. (9th Cir. 2011) 640 F.3d 1034 that parties can expressly agree to extend confidentiality to mediations.

Mediation Message No. 67 reminded trial lawyers to be careful about the language in their pleadings because “statements in a pleading are always admissible against the pleader to prove the matter asserted—as is any other statement by a party.” (Dang v. Smith (2010) 190 Cal.App.4th 646.)

Mediation Messages 70 and 71 summarized findings in an empirical study in the Journal of Empirical Legal Studies that there is a high incidence of decision-making error by both plaintiffs and defendants in rejecting settlement proposals and going to trial or arbitration.
I became a horticulturist in Message no. 72 by noting that even though mediators cannot report misconduct to the court, they are not potted plants and should not allow egregious misbehavior and malpractice to occur in their presence.
Arbitrator disclosure requirements were a major focus of the appellate courts this year. La Serena Properties v. Weisbach (2010) 186 Cal.App.4th 893 held that because judicial immunity applies to an arbitrator’s failure to make adequate disclosures of potential conflicts of interest, the exclusive remedy for that failure is to set aside the award. Benjamin, Weill & Mazer v. Kors (2011) 195 Cal.App.4th 40 held that part-time lawyer-arbitrators should disclose their legal involvement in business interests similar to the facts of the arbitrated matter. Rebmann v. Rohde (2011) 196 Cal.App.4th 1283 held that an arbitrator’s disclosure obligation does not extend to information about the arbitrator’s background that has nothing to do with the facts of the case.
In a non-disclosure case, Hoso Foods, Inc. v. Columbus Club, Inc. (2010) 190 Cal. App.4th 881 held that the Code of Civil Procedure does not suggest that arbitrators have the power to preclude a corporate party from designating a representative to attend arbitration proceedings.
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 2011

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 by going to the articles link on the website.

Mediation Message No. 65

A YEAR-END REVIEW

I thought it would be timely to summarize the mediation topics in alphabetical order that I’ve written about this year and also provide a heads up about an important development in mediation confidentiality that will take place early in 2011. Before discussing them, thank you for your support in helping me be honored by the Daily Journal for the third time in the last four years as a Top California Mediator-Arbitrator.

Compelling mediator testimony at a subsequent proceeding – Rinaker v. Superior Court (1998) 62 Cal.App.4th 155 holds that a mediator can be compelled to testify about a witness’s statements at mediation who has testified inconsistently against a juvenile in a subsequent proceeding. The federal counterpart to Rinaker is Olam v. Congress Mortgage Company (N.D. Cal. 1999) 68 F.Supp.2d 1110 which holds that a mediator’s testimony can be compelled in a civil proceeding to establish whether a defaulting party was competent to enter into a settlement at the mediation that the opposing party is now seeking to enforce. (Mediation Message no. 56, January 2010)

Enforcing mediation settlements and the use of mediator declarations – Radford v. Shehorn (2010) 187 Cal.App.4th 852, 857 holds that a party cannot use a mediator’s declaration, which the opposing party had not agreed to, in a dispute about the contents of a written settlement agreement because that declaration violates “mediation confidentiality statutes.” (Mediation Message no. 63, September 2010.)

Enforcing mediation settlements and the waiver of mediation confidentiality – To enforce a settlement achieved through mediation, the parties must have waived mediation confidentiality in the settlement. The effective, operative wording for that waiver should read, “It is the intent of the parties, pursuant to Evidence Code sections 1122(a)(1) and 1123(b) and Code of Civil Procedure section 664.6, that all of the terms of this agreement may be disclosed to a court of law and shall be enforceable and binding upon them in a court of law.” (Mediation Message no. 62, August 2010.)

Essential documents at mediation – Besides bringing to mediations your wits, clients and people with authority to settle the case, attorneys are strongly advised to bring the entire file and a long form settlement agreement. (Mediation Message no. 58, March 2010.)

Expedited Jury Trial Act – The provisions of the Expedited Jury Trial Act (Code of Civil Procedure §§ 630.01 – 630.10) and the enabling Rules of Court (Rules 3.1545 et seq.), which go into effect on January 1, 2011, are summarized. (Mediation Message no. 64, November 2010.)

Federal mediation rules regarding confidentiality – Each of the federal districts in California have their own rules regarding mediation confidentiality, with the Northern District’s being the most elaborate. (Mediation Message no. 55, December 2009.)

Supreme Court may shake up mediation confidentiality – The Court heard argument in November 2010 in two consolidated cases (Cassel v. Superior Court (2009) 179 Cal.App.4th 152 and Porter v. Wyner (2010) 183 Cal.App.4th 949) regarding the scope of mediation confidentiality where parties at mediations want to use communications with their attorneys in those proceedings in subsequent litigation against the same attorneys for claims of legal malpractice and breach of fiduciary duty. The decision, which will be issued early in 2011, must resolve the conflict between a strict application of mediation confidentiality and the potentially negative impact of such an application on consumer protection. (Mediation Message nos. 57 and 60, February and May 2010.)

Timing of a mediation is critical – The factors to be considered in deciding when to conduct a mediation are analyzed. (Mediation Message no. 59, April 2010.)

Trial courts have limited power to order mediations – State trial courts only have the power to order parties to mediation where the amount in controversy does not exceed $50,000 for each plaintiff. (Rule of Court 3.891, subdivision (a)(1).) (Mediation Message no. 61, July 2010.)

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 2010

Mediation Message No. 47

A GUIDE TO THE LAST SIX YEARS OF MEDIATION MESSAGES

Since I’ve covered a lot of ground in the six years that I’ve been writing my “Mediation Messages,” it’s time to review and organize the subjects that have been discussed.

Mediation is a dynamic process; there is no pre-determined way in which it should be conducted. Its course and scope depend upon the facts, the parties and, to a lesser extent, the applicable law. (See both Message nos. 12 and 33; the latter talks about the different methods mediators use in breaking an impasse when the initial distributive bargaining method is no longer effective. The only truisms for mediation is that it can not be rushed and that settlement is preferable to trial. Both of these maxims are discussed in Message no. 47.)

The authority of a trial court to order parties to participate in both pro bono and private mediations is analyzed in Message no. 41. Message no. 24 discusses Travelers Casualty and Surety Company, et al. v. Superior Court, which holds that decision-making at mediation is in the hands of the parties rather than the mediator.

Preparation for mediation is a necessity. In fact, it should be approached with the same intensity as if it were a court trial. (See Message no. 15 [important questions to consider before commencing a mediation]; no. 27 [noting that two of the reasons mediations succeed is because attorneys were prepared and came in good faith] and no. 42 [analogizing the necessary steps for preparing for both a court trial and mediation].)

Mediation briefs should be prepared with the same care as any Superior Court motion. (Message no. 2 discusses what the briefs should contain. Message no. 16 emphasizes that briefs should be filed in every case and that they should be submitted before the mediation date so that the mediator has had time to read them. Also, as noted in Message no. 38, mediators, in court ordered mediations, may require such briefs.)

Counsel, the parties and insurance representatives must attend court-ordered mediations, unless excused. (Message no. 7 distinguishes the attendance requirement between court-ordered and voluntary mediations. Message no. 27 mentions that mediations sometimes do not succeed because an essential person with settlement authority was not present. Message no. 31 recommends that business representatives have sufficient authority to make binding decisions. Finally, Message no. 38 notes that a new Rule of Court adds additional requirements for non-attending participants.)

Whether or not the parties shall meet in a joint caucus and, if they do, how it should be conducted are discussed in Message nos. 35 and 36. Since attorney remarks at a joint caucus differ procedurally and tactically from opening remarks at trial, Message no. 3 advises what attorneys can and should not say to opposing counsel in that setting.

The opening offer or demand requires some thought; it should not be done “by the seat of the pants.” (Message no. 13 discusses the considerations involved in formulating the offer or demand; Message no. 14 reviews the tactics involved in deciding whether the plaintiff or defendant should make the first overture.)

Body language of mediation participants provides strong visual cues for what they are thinking. (Message no. 5 discusses the importance of this concept.)

There are practical and ethical reasons why attorneys should both keep their clients informed about what is happening at mediation and have knowing consent to settle their cases. (Message no. 22 reviews the American Bar Association guidelines for this ethical duty. Message no. 29 expands upon that subject by advising how attorneys should act to protect their clients’ needs and rights. Note, however, as discussed in Message no. 25, that an insurer has the right to settle cases without an insured’s consent if the latter is covered fully under a policy that gives the insurer the right to do so. Mediation Message no. 30 discusses the positives and negatives of having supportive people at mediation for youthful, vulnerable and inexperienced litigants.)

The last-minute condition (such as the request to make installment payments or the demand for liquidated damages if a party breaches an agreed-upon confidentiality clause) can be a potential deal breaker. (Message no. 18 advises how the parties can avoid that disruption by better timing.)

Hospital liens against third-party tortfeasors, to be enforceable, require an underlying debt by the plaintiff to the hospital. (Message no. 26 analyzes Parnell v. Adventist Health System/West, which decided this issue.)

An aggregate settlement of more than one client’s claims can be a potential violation of Rule of Professional Conduct 3-310, subdivision (C). (See Message no. 4 for how to avoid violating that rule.)

The propriety of fee sharing by attorneys with their clients is analyzed in Message no. 40.

The confidentiality of communications at mediation and writings prepared for mediation are a critical component of the process. (Message no. 17 discusses Rojas v. Superior Court, which holds that all writings prepared for mediation are sacrosanct. Message no. 39 reviews Wimsatt v. Superior Court, which extends mediation confidentiality to any writing or statement that would not have existed but for a mediation communication. Message no. 34 comments on the absurdity that mediation confidentiality, in effect, allows attorneys to make misrepresentations at mediations without the fear of sanction or punishment.)

Settlement agreements achieved at mediation are enforceable only if they follow standards established by the California Supreme Court. (Fair v. Bakhtiari, which is analyzed in Message no. 37, holds that a settlement at mediation is enforceable and not confidential only if it incorporates the language in Evidence Code section 1123, subdivision (b). Message no. 45 discusses Simmons v. Ghaderi which holds, in substance, that the waivers of the Evidence Code sections regarding confidentially must be express rather than implied.)

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 2008