Don't dismiss causes of action just to pursue an appeal.

In Kurwa v. Kislinger (2013) 57 Cal.4th 1097, the California Supreme Court was faced with the issue as to whether "an appeal may be taken when the judgment disposes of fewer than all the pled causes of action by dismissal with prejudice, and the parties agree to dismiss the remaining counts without prejudice and waive operation of the statute of limitations on those remaining causes of action." 

This dilemma often arises when the trial court knocks out a plaintiff or cross-complainant's strongest causes of action and the party has to decide whether to proceed on the remaining, but weaker, causes of action before appealing.  They may be concerned about possibly getting a poor result in the first trial, appealing, and then going back for a second trial.  When faced with this problem, attorneys have often dismissed the weak causes of action without prejudice and then appealed a seemingly "final" judgment.

In Kurwa, the Supreme Court noted that the one final judgment rule precludes an appeal from a judgment disposing of fewer than all causes of action between the parties, "even if the remaining causes of action have been severed for trial from those decided by the judgment."  It found that a judgment that disposes of fewer than all causes of action is interlocutory and not yet final.  The Court stated:

       "When, as here, the trial court has resolved some causes of action and  the others are voluntarily dismissed, but the parties have agreed to preserve the voluntarily dismissed counts for potential litigation upon conclusion of the appeal from the judgment rendered, the judgment is one that 'fails to complete the disposition of all the causes of action between the parties.' (Morehart, supra, 7 Cal.4th at p. 743) and is therefore not appealable."

The Supreme Court concluded that while the remaining causes of action are no longer pending before the trial court, the parties have arranged for those causes of action to be "resurrected upon completion of the appeal," thus meaning they are "'legally alive' in substance and effect.'  As such, this tactic allows the parties to "evade" the one final judgment rule.

A plaintiff or cross-complainant can voluntarily dismiss a cause of action without prejudice pursuant to trial, pursuant to Code of Civil Procedure section 581(b)(1) and (c), but it is the agreement to waive the statute of limitations that kept the claim alive and allowed for its later revival.  And it did not matter to the Supreme Court that the judgment did not incorporate the parties' agreement.  Nor would they consider arguments supporting appellate efficiency, noting California law does not provide for a "case-by-case efficiency exception" to the one final judgment rule, and "[w]here unusual circumstances justify it, review of interlocutory judgments may be obtained by petition for writ of mandate, but not by appeal."

A Trial Lawyer's Recommended Book List

              Trial attorney Mitch Jackson of Jackson & Wilson in Laguna Hills recently shared his list of "Trial Lawyer "How To" books in a recent Trial Lawyer Tips.  https://plus.google.com/108942083870019378089/posts/YjSmc3qt1x8

I was flattered to find my book, An Appeal to Reason, on his list.  What I respect about Mitch is, as he says it, that he never stops learning and improving.   Successful attorneys can continue to learn, even if they have achieved great victories at trial. 

               As an appellate attorney, I am not the first attorney on the scene. The trial attorney has the responsibility of effectively presenting the client's case at trial.  That responsibility also includes protecting the case in the event there is an appeal.  Since an appellate attorney is not always consulted until an appeal has been filed, my book will assist trial attorneys in taking those crucial steps at the lower court level.

               It is for that very reason that I wrote An Appeal to Reason, which is an accumulation of my wisdom after almost 35 years of handling appeals.  My book is written for trial attorneys and cautions them about common mistakes made by trial attorneys that I have observed during my career.

Mediating an Appellate Case - Part II

 

The decision to appeal involves more than a consideration of the merits of an appeal.  I find there are two major issues involved in every appeal:  a financial decision and a decision based on the merits.  Here are some factors that enter into the financial decision:

• Is the judgment immediately enforceable?  If so, does the appellant have the ability to bond the judgment or post an undertaking to stop enforcement proceedings?  A bond or undertaking will be 1-1/2 to 2 times the judgment and collateral for a bond is extremely limited (usually cash or a line of credit), not to mention the cost of the premium.  This factor alone can force a settlement, a bankruptcy petition, or a visit to an asset protection attorney to protect the appellant's assets.

• Is there an attorney's fees provision?  If so, the appellant has to realize that the loss of an appeal means paying two sets of attorneys:  the appellant's attorney and the respondent's appellate attorney.  

• Can the appellant afford to pay the attorney's fees for an appeal?  Appellate attorneys are not ordinarily risk-takers.  Because much of their work is done at the beginning of a case, they are less flexible in taking payments or handling a case on a contingency fee basis.  Appellants who have limited resources for these fees - not to mention the filing fees and costs of preparing the record -may have to consider whether an appeal is economically viable.

• What will the appeal get the appellant?  If a winning appeal merely means going back for a retrial, the appellant must be prepared to pay the costs of trial, including expert fees and attorney's fees, for a second trial.

• How much are the transcripts?  The costs of the clerk and reporter's transcripts can really add up and these costs must be paid up front.  Sometimes the expense of paying for a reporter's transcript for a long trial is enough to stop an appellant from proceeding.

• Does the appellant have the emotional stamina to go through more litigation?  Litigation produces a lot of stress and most people are not comfortable dealing with our legal system.  The best result for them would be to get them out of the system and back to their regular lives.

If you are the respondent, the odds are certainly in your favor, but your win is not a true win until you have the cash in your bank account.  The value assigned by the jury or court is capable of being slashed, discounted or negotiated down.  And when you consider that you have to pay attorney's fees to fight the appeal or pursue enforcement of the judgment, that judgment is quickly being chipped away.  Toss in the risk of losing on appeal, which can mean a retrial or a complete loss, then you can start sweating.  And stress is not limited to one side.  No client I know enjoys litigation.

Don't forget to factor in the time spent on appeal.  Most appeals can be concluded within 1 to 1-1/2 years, but that was before our budget crisis.  You can add in more time, maybe even two years to process an appeal, and hope that the money is still there at the end of the process.  A petition for review to the Supreme Court could delay the process even more.  Of course, when the appellant posts a bond, you have the assurance the money is there, earning a nice 6-10% in interest, but that also means you still have to win.

So, consider the possibility of mediating your appellate case with an open mind.  You could be surprised and the case may settle.

Mediating an Appellate Case - Part I

I recently settled an appeal and thought I might write a few words about mediating appellate cases.  

One major difference between an appellate case and one at the superior court level is that before you take a case to trial, there are no official winners or losers.  Now you, the trial attorney, might feel that you have a rock-solid case and can't lose, but if you have been around long enough and tried enough cases, you know that s***t happens that can't be predicted.  To me, that means that there is a uncertainty in almost every trial.  So, you are taking a risk - could be small or big - but I think you have to factor that in.

Before the trial, the case does not have a set value, but once the jury presents its verdict or the court enters judgment, a third party or parties has assigned a value to the case.  That value often becomes the value of the case, at least in the winner's mind, and that is one reason it can be difficult to settle such cases.  Quite often, the winner views the judgment as "his or her" money and a sense of entitlement attaches to that figure.

Once the case is decided at the superior court level, there is now a winner and a loser.  That doesn't mean that the winner is satisfied with the win or the loser doesn't feel that victory is just around the corner.  Post-trial motions may be filed, and if they confirm the judgment, the winner's position becomes even more entrenched.

So, it may be difficult, but not impossible, to mediate an appellate case.    There are other factors that must be considered beyond the merits of an appeal.  In my opinion, every appeal involves a economic factors that impact the appeal.  This is what I call the "financial decision" on whether to appeal.  

Don't omit important facts from your appellate briefs!

In one of the largest sanction awards by the appellate court, the appellant's attorneys were ordered to pay the respondent the sum of $52,727.56.  So, how did that happen?

In Kleveland v. Siegel & Wolensky (2013) 215 Cal.App.4th 534, the appellate court was faced with a third appeal in the same case.  The first appeal was from the denial of Scott's petition for breach of trust and removal of a trustee.  The trial court found Scott's petition was pursued in "bad faith" and for an "improper purpose."  In the second appeal, Scott challenged the lower court's order approving a petition for approval of accounting and the proposed plan of distribution.  One of Scott's attorneys also appealed an award of sanctions against him.  

The third appeal involved a malicious prosecution lawsuit filed by the trustee against Scott and his attorneys arising out of Scott's petition for breach of trust and removal of trustee.  The attorneys who represented Scott filed an anti-SLAPP motion, which was denied, and the lower court awarded the trustee $20,055 in fees and costs.  They appealed that order.  

What is important here is that the Court of Appeal sharply criticized appellants for the failure to provide a "summary of significant facts limited to matters in the record."  (Cal. Rules of Court, rule 8.204(2)(C).)  Oddly enough, appellants omitted what the Court considered to be the most important fact:  the trial court found Scott's petition was filed in bad faith and for an improper purpose.  The Court stated, "This is all the more preposterous because this finding of bad faith was appealed and affirmed by this court."  (Id. at p. 557.)  Wow, one major OOPS!

 The Court also criticized appellants' use of "facts" and "evidence" beyond the petition "in an attempt to manufacture a reasonable justification for filing and pursuing the petition."  (Id. at p. 539.)   As such, the attorneys misrepresented the record and ignored case law without explanation.   The appellants were selective in presenting the "facts" from the record and they also asked the appellate court to consider "evidence" that was explicitly rejected by the trial court.  The court continued, "Attorney Defendants attempt to reargue factual issues that have long been decided (and affirmed on appeal) while ignoring the relevant statutes and case law.  At times, it is clear that Attorney Defendants brazenly misrepresented the record and/or obscured facts."  (Id. at p. 557.)

It further found the third appeal to be "patently frivolous" because there was no law or facts to support their arguments.  As a consequence, it ordered sanctions in the amount of $8,500 - as the cost of processing an appeal - to be paid to the clerk, and $52,727.56 as sanctions payable to the trustee.  (Id. at p. 539.)

Of particular note is the following language:

"It also should be obvious there is a great need to deter conduct of this nature in the future.  This is especially true considering the number of attorneys involved in this appeal . . . We find it incredulous that seven pairs of legally trained eyes failed to see that the opening brief distorted the record and ignored the trial court's findings to such an extent that it is appropriately characterized as nothing short of a farce.  . . . We cannot sit idly by when several members of the bar fail to live up to the standards of the profession."  (Id. at p. 559.)

The Court stressed the importance of being able to rely on the honesty of attorneys, who are called "officers of the court."  While it may be a honorary term, it is still one that should be respected, most of all by attorneys.  As I have often stressed, credibility is everything, and no case, client or amount of money is worth endangering your reputation with the court.