Archive | October, 2015

BIAS IN THE COURTS: UCC and TILA REVIEW

31 Oct

Source: BIAS IN THE COURTS: UCC and TILA REVIEW

Ex-FDIC Auditor Files Brief

31 Oct

Source: Ex-FDIC Auditor Files Brief

When is the Consummation of a Loan Contract?

31 Oct

Source: When is the Consummation of a Loan Contract?

Go to LA Seminar

31 Oct

Source: Go to LA Seminar

Understanding California SLAPP Law and Anti-SLAPP Motions

30 Oct

Understanding California SLAPP Law
and Anti-SLAPP Motions

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It is probably a safe bet that the vast majority of people have never heard the term “SLAPP”, even though it is a major factor in California litigation.  It is also likely that if you are reading this, it is because you are involved in litigation where the issue of an anti-SLAPP motion has arisen, and you are looking for information.  The information I provide below will give you a very good understanding of SLAPP suits, anti-SLAPP motions, and SLAPP-back claims.

What is a SLAPP lawsuit and an anti-SLAPP motion?

Let’s begin with the basic terminology.  “SLAPP” is an acronym for “strategic lawsuit against public participation”. A SLAPP is a lawsuit, filed for the improper purpose of trying to silence criticism, or to prevent someone from pursing their own right of redress. The typical SLAPP plaintiff does not care whether he wins the lawsuit, and often knows he has no chance of prevailing. The plaintiff’s goals are accomplished if the defendant succumbs to fear, intimidation, mounting legal costs or simple exhaustion and abandons the criticism.  As a bonus, if the SLAPP plaintiff can garner notice in the media, or even among the defendant’s circle, a SLAPP suit may also intimidate others from participating in the debate.boa-billboard1

Approximately 30 states have enacted anti-SLAPP legislation. Currently there is no Federal SLAPP law, but it is anticipated that a Federal version will soon be enacted, because of the importance of free speech in America. California has a unique variant of anti-SLAPP legislation which has led to a significant volume of SLAPP litigation in this state. California is truly the anti-SLAPP capitol.  A search for reported cases on SLAPP litigation in 2009 found 1,386 cases for the State of California alone, with just 341 case spread among the rest of the states with anti-SLAPP statutes. More than 2000 court opinions have interpreted and applied California’s anti-SLAPP law.

Before proceeding any further, let’s be sure you have a good grasp of the lingo. The “SLAPP” is the lawsuit filed by the Plaintiff against the Defendant, which seeks to either silence the Defendant’s free speech, or to prevent the Defendant from seeking a “right of petition“. The Defendant seeks to have the action dismissed by filing what is called a Special Motion to Strike. That Special Motion to Strike is the anti-SLAPP motion. The SLAPP can be, and often is, a cross-complaint filed in the action. That is where many attorneys who are unfamiliar with SLAPP law get into trouble, because they file a cross-complaint that attacks the complaint, and that itself is a SLAPP.

California’s anti-SLAPP Statute 

California’s anti-SLAPP law is contained in Code of Civil Procedure § 425.16, a statute intended to frustrate these actions by providing a quick and inexpensive defense.  Although called a special motion to strike, the anti-SLAPP statute creates a complicated hybrid of a number of motions from demurrers to motions for summary judgment, with a dash of injunctive relief.  When a defendant is served with a lawsuit the defendant asserts is designed to improperly silence his speech, he has the option of filing an anti-SLAPP motion in the first 60 days after service (although the court has the discretion to consider anti-SLAPP motions filed beyond the 60-day deadline). If the plaintiff files an amended complaint at any point, that restarts the 60 day clock. It is sometimes the case that the original complaint will not be a SLAPP, but the plaintiff either adds a cause of action or allegation that makes the amended complaint a SLAPP.

Once filed, the anti-SLAPP motion stops any discovery and any discovery motions.  This advances the purpose of the underlying statute, which is intended to save defendants from spurious defamation actions, but at the same time it can frustrate the plaintiff with a legitimate claim, who now must show a reasonable likelihood of success in the action, with his hands tied by the discovery stay. (The plaintiff can ask the court for permission to conduct limited discovery on a showing of good cause.)

Here are the three important anti-SLAPP statutes, but the heart of legislation is contained in subpart (e) of Code of Civil Procedure section 425.16, which provides:

(e) As used in this section, “act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue” includes:

(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law;

(2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law;

(3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest;

(4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.

First Prong: Defendant Must Show that the Speech Falls Under the anti-SLAPP Law. 

To win an anti-SLAPP motion, the defendant must first show that the speech in question falls under one of the four sections set forth above. But that is just the first prong of the analysis. If the defendant proves the speech was protected, the plaintiff can still move forward with the action if if he can show that he is more likely than not to prevail on the action (this is called making a prima facie showing).

Here is a typical scenario to illustrate the point. A person goes to a doctor and is very displeased with the appointment. The doctor did nothing but an excellent job, but the patient felt he had to wait far too long in the waiting room. The patient goes home and goes to Vitals.com, where he can post a review of the doctor. He writes that the doctor made him wait too long, but then realizes that sounds pretty trivial. He wants to really hurt the doctor for making him wait so long, so he erases that, and instead posts that the doctor is a quack who should lose his license.

Having sufficiently vented, the patient gives the matter no further thought, but the doctor sees the post and sues the patient for defamation. Is the doctor’s defamation lawsuit a SLAPP? Can the patient successfully bring an anti-SLAPP motion?

As set forth above, that will depend on a number of factors. Is the doctor’s performance a matter of “public interest”? Most courts have found that a doctor’s performance is one of public interest, but some look at the forum and the number of people involved. Some hold that the public’s interest in this one doctor is not broad enough to be a matter of public interest, and would deny an anti-SLAPP motion on that basis, never reaching the second prong. Others hold that a doctor’s performance, discussed on this website specifically intended to provide a forum for patients to discuss doctors, would constitute a matter of public interest, and would find that defendant has met the first prong, leading us to the second prong.

Second Prong:  Is the Plaintiff Likely to Succeed?

If the court does decide that the ill-spirited post by our hypothetical patient is protected speech under the anti-SLAPP statute, then the analysis moves to the second prong: Can the plaintiff make a prima facie case? Stated another way, can the plaintiff show that he is likely to succeed? You see, just because someone is speaking on a matter of public interest, that does not mean they get to say whatever they want.  The speaker is still subject to defamation laws. So if the defendant wins on the first prong, the plaintiff must put on sufficient evidence to show that even though the speech falls under the statute, it is still defamatory.

How Will the Court Decide?

The winner of our hypothetical will depend first on whether the judge feels that a posting on Vitals.com about a single doctor is a matter of public interest.

If the court finds that it is a matter of public interest, the burden will shift to the doctor to show sufficient evidence to prove his case. The fact that the doctor was called a quack would likely be found to be merely colorful hyperbole and not defamatory. There would be no evidence the doctor could put on to show he is not a quack, because there is no “quack meter” we can use to measure his “quack quotient”. Even if the doctor can show a string of awards, that would probably not be sufficient to show that this patient did not consider him to be a quack. A statement of opinion generally cannot be defamatory.

On the other hand, if the patient truthfully answers during discovery that his only beef with the doctor was that he made him wait too long, then the “quack” remark could be taken as an unwarranted attack on the doctor’s professionalism with no basis for doing so, and the court could conclude that the statement was defamatory.

Same facts, different results, and we don’t even get to the evidence until the court decides that the speech was a matter of public interest, or involved a right of redress.

Frankly, the procedural requirements of section 425.16, its interaction with other statutes such as Civil Code 47 (the statute defining what is privileged speech) and the latest definition of “public interest”, which changes from week to week, is often far too challenging for a trial court judge to decipher in the limited time he or she has to consider an anti-SLAPP motion.

A bad decision by the judge can be devastating to the defendant or plaintiff. If the special motion to strike is denied when it should have been granted, then the defendant remains hostage to the action.  In an effort to minimize this possibility, the statute provides that the order denying the motion is immediately appealable, but that is costly and time-consuming, which is what the anti-SLAPP statute was trying to prevent in the first place. Conversely, improperly (or properly) granting an anti-SLAPP motion will entitle the defendant to a mandatory award of reasonable attorney fees. This has turned into a significant problem because there are many unethical attorneys who submit inflated fee applications following a successful anti-SLAPP motion. I am frequently retained to testify as an expert to challenge these inflated bills, and thus far I have always been successful in having them reduced, but without such testimony far too many judges are rubber-stamping attorney fee motions, which I have seen exceed $100,000. And there are no “take-backs” when it comes to SLAPP suits. Once an anti-SLAPP motion has been filed, a plaintiff cannot escape this mandatory fee award by amending or even dismissing his complaint.

Any of the following types of actions (and perhaps more because the law is expanding) can be a SLAPP suit:

  • Defamation.
  • Malicious Prosecution or Abuse of Process.
  • Nuisance.
  • Invasion of Privacy.
  • Conspiracy.
  • Intentional Infliction of Emotional Distress.
  • Interference With Contract or Economic Advantage.

As you can see, many actions can result in an anti-SLAPP motion, and such a motion can be a costly and inequitable minefield if the judge fails to fully understand the law. If you are going to enter that minefield, you need an attorney who is a recognized expert in this field. You need Timothy McCandless, attorneys whose primary area of practice is civil and the accompanying SLAPP laws. Call (925) 957-9797 for a free telephone consultation.

The following are selected opinions issued by the California Supreme Court concerning the anti-SLAPP statute (CCP § 425.16).

Barrett v. Rosenthal
California Supreme Court, 2006 (review of Alameda Co. Superior Court)
40 Cal.4th 33, 146 P.3d 510

Three plaintiffs, vocal critics of alternative medicine, sued our client, breast-implant awareness activist Ilena Rosenthal, for defamation and related claims, based on critical comments she made about two of them on the Internet. The trial court granted her anti-SLAPP motion. The Court of Appeal affirmed this ruling as to two plaintiffs, but reversed as to the third. The California Supreme Court held that the third plaintiff’s claims should be dismissed as well, ruling that Rosenthal was protected from civil liability for republication of the words of another on the Internet by section 230 of the federal Communications Decency Act. On remand, the trial court awarded more than $434,000 for attorneys fees.

Briggs v. ECHO
California Supreme Court, 1999 (review of Alameda Co. Superior Court)
19 Cal.4th 1106, 81 Cal.Rptr.2d 471

The Briggses, landlords, sued our client, a nonprofit organization that provides counseling, mediation, and referral services related to landlord-tenant disputes, alleging that the organization harassed and defamed them. The trial court granted defendant’s anti-SLAPP motion. The appellate court reversed in a 2-1 decision, finding no “issue of public significance” in the defendant’s conduct. In its first case involving the California anti-SLAPP law, the California Supreme Court reversed the Court of Appeal, holding that the anti-SLAPP statute is to be construed broadly and covers any lawsuit arising from the exercise of the right to petition the government, regardless of the issue involved. In total, the trial court awarded more than $425,000 for attorneys fees and costs.

City of Cotati v. Cashman
California Supreme Court, 2002 (review of Sonoma Co. Superior Court)
29 Cal.4th 69, 124 Cal.Rptr.2d 519, 52 P.3d 695
Note! This case was reviewed together with Navellier v. Sletten and Equilon Enterprises v. Consumer Cause, Inc.

A city’s action for declaratory relief respecting the constitutionality of its ordinance, filed in state court in response to a similar action filed by citizens in federal court, does not constitute a SLAPP and is not subject to Code of Civil Procedure section 425.16.

Club Members for an Honest Election v. Sierra Club
California Supreme Court, 2008 (review of San Francisco Co. Superior Court)
45 Cal.4th 309, 86 Cal.Rptr.3d 288

Club Members for an Honest Election (Club) sued the Sierra Club, claiming its elections were unfairly influenced when the board of directors promoted the views that advanced the majority of the Board and members’ position, in conflict with Club’s minority interests. The Court of Appeal applied the public interest litigation exception under C.C.P. 425.17(b) and allowed plaintiff’s claim to proceed, based on the reasoning that the main purpose of the lawsuit was to protect the public interest. The California Supreme Court reversed this decision, holding that the Court of Appeal applied the exception too broadly. The Supreme Court rejected the appellate court’s application of the “principle thrust or gravamen” test and stated that 425.17(b) must be narrowly interpreted. For a claim to fall within the public interest exception, the plaintiff must seek to advance the public interest, and only the public interest. In this case, plaintiff requested remedies that would benefit Club by advancing its interests within the Sierra Club. By seeking a personal gain, the plaintiff was prohibited from invoking the exception. The Court ruled in favor of the Sierra Club and granted its anti-SLAPP motion.

In re Episcopal Church Cases
California Supreme Court, 2009 (review of Orange Co. Superior Court)
45 Cal.4th 467, 87 Cal.Rptr.3d 275

The Los Angeles Diocese sued St. James Parish to recover property when the Parish broke with the Episcopal Church, largely over a doctrinal disagreement after the Episcopal Church ordained an openly gay bishop. The Parish filed an anti-SLAPP motion, arguing that its disagreement with the Church arose from protected speech. The trial court granted the motion, which was reversed by the Court of Appeal. The California Supreme Court affirmed the appellate court’s decision and held that, because the central issue in the case was a property dispute, the anti-SLAPP motion was not appropriate. The Court recognized that protected speech was tangentially at issue, but held that the action must “arise from” protected activity for the defendant to succeed in an anti-SLAPP motion. The Court recognized that protected activity might “lurk in the background,” but found that this would not transform a property dispute into a SLAPP.

Equilon Enterprises, LLC v. Consumer Cause, Inc.
California Supreme Court, 2002 (review of Los Angeles Co. Superior Court)
29 Cal.4th 53, 124 Cal.Rptr.2d 507, 52 P.3d 685
Note! This case was reviewed together with Navellier v. Sletten and City of Cotati v. Cashman

The party moving to strike a complaint under the anti-SLAPP statute is not required to demonstrate that the action was brought with the intent to chill the exercise of constitutional speech or petition rights.

Fahlen v. Sutter Central Valley Hospitals
California Supreme Court, 2014 (review of Stanislaus Co. Superior Court)
58 Cal.4th 655; 318 P.3d 833; 168 Cal.Rptr.165

Flatley v. Mauro
California Supreme Court, 2006 (review of Los Angeles Co. Superior Court)
39 Cal.4th 299, 46 Cal.Rptr.3d 606

Flatley, a well-known entertainer, sued attorney Mauro, who threatened to take legal action against him for Flatley’s alleged rape of Mauro’s client. Mauro sent Flatley a “prelitigation settlement” offer demanding payment of $100,000,000 to settle the claim. If Flatley refused to pay, Mauro threatened to not only file a lawsuit, but to widely publicize the rape allegation, including following Flatley around to every place he toured, and to “ruin” Flatley. In addition, Mauro threatened to publicly disclose other alleged criminal violations of immigration and tax law that were entirely unrelated to the rape allegation. The Court of Appeal found that Mauro’s actions constituted extortion as a matter of law, and affirmed the trial court’s denial of his anti-SLAPP motion. The California Supreme Court agreed with the Court of Appeal, holding that a defendant cannot assert the anti-SLAPP statute to protect illegal activity if “either the defendant concedes, or the evidence conclusively establishes, that the assertedly protected speech or petition activity was illegal as a matter of law.” The Court noted that this was a “narrow” exception, based on the extreme circumstance in this case. Thus, the Court held that Mauro’s anti-SLAPP motion was properly denied.

Gates v. Discovery Communications, Inc.
California Supreme Court, 2004 (review of San Diego Co. Superior Court)
34 Cal.4th 679, 21 Cal.Rptr.3d 663

Gates had been convicted of accessory after the fact to a murder and served three years in prison. Several years later Discovery produced a program about the crime, portraying Gates’s involvement. After the program was broadcast, Gates sued Discovery for defamation and invasion of privacy. The trial court granted Discovery’s demurrer to the defamation cause of action but denied its demurrer to the complaint for invasion of privacy. Discovery then filed an anti-SLAPP motion to strike the latter complaint; the court denied the motion, finding that Discovery had failed to demonstrate that its account of the crime was newsworthy, thus making it likely that Gates would prevail on his complaint for invasion of privacy. The appellate court’s reversal was upheld, since Discovery’s report is protected by the First Amendment and current case law would make it impossible for Gates to prevail on his claim.

Jarrow Formulas, Inc. v. LaMarche
California Supreme Court, 2003 (review of Los Angeles Co. Superior Court)
31 Cal.4th 728, 3 Cal.Rptr.3d 636

The court affirms the Court of Appeal’s decision that a malicious prosecution action is not exempt from scrutiny under the state’s anti-SLAPP law.

Ketchum v. Moses
California Supreme Court, 2001 (review of Marin Co. Superior Court)
24 Cal.4th 1122, 104 Cal.Rptr.2d 377

Ketchum sued his tenant Moses for allegedly filing false reports with government agencies about the condition of Ketchum’s property. Moses prevailed on a special motion to strike Ketchum’s complaint. Moses had a contingency fee contract with his attorney; if the anti-SLAPP motion failed, the attorney would receive no fee. The trial court awarded attorney’s fees, as required by the anti-SLAPP statute, and included a fee enhancement to reflect the risk of nonpayment in a contingency contract. It later supplemented this award with additional fees and costs after Ketchum attempted to challenge the fee award. The Court of Appeal reversed. The Supreme Court affirms the judgement of the Court of Appeal but criticizes the rationale of the Court of Appeal. A successful movant of an anti-SLAPP motion is entitled not only to attorney fees incurred in the pursuit of the anti-SLAPP motion, but also to fees incurred in litigating the award of attorney fees. While attorney fees incurred in pursuit of an anti-SLAPP motion may be enhanced to reflect contingent risk, fees incurred after a successful motion may not be so enhanced because an award of fees is mandatory under the anti-SLAPP statute and therefore there is no risk of nonpayment.

Kibler v. Northern Inyo County Local Hospital District
California Supreme Court, 2006 (review of Inyo Co. Superior Court)
39 Cal.4th 192, 46 Cal.Rptr.2d 41

Physician George Kibler sued defendant hospital and its employees for defamation and other torts after defendants addressed complaints in a peer review meeting that Kibler was verbally abusive and physically threatening at work, resulting in his temporary suspension. Both the trial and appellate courts granted the hospital’s special motion to strike Kibler’s complaint.

The California Supreme Court reviewed the case to establish whether a hospital peer review proceeding was “any other official proceeding authorized by law” under 425.16(e)(2). The court concluded that peer review actions, mandated by the Business and Professions Code, function as a quasi-judicial proceeding and are within the ambit of anti-SLAPP protection. The court affirmed the granting of defendant’s anti-SLAPP motion.

Navellier v. Sletten
California Supreme Court, 2002 (review of San Mateo Co. Superior Court)
29 Cal.4th 82, 124 Cal.Rptr.2d 530, 52 P.3d 703
Note! This case was reviewed together with Equilon Enterprises, LLC v. Consumer Cause, Inc. and City of Cotati v. Cashman

Plaintiffs sued Sletten for a variety of causes, including breach of contract for filing counterclaims in an earlier lawsuit in federal court. Sletten moved to strike this cause of action as a SLAPP, claiming that his counterclaims were protected under the First Amendment’s right of petition. The Court of Appeal (in an unpublished decision) concluded that Sletten’s counterclaims were not a “valid exercise” of that right, as required by the anti-SLAPP statute, since he had earlier waived his right to sue Navellier in a “release of claims” as a condition of return to employment. The Supreme Court reverses, holding that Sletten had met his threshold burden of demonstrating that Navellier’s action for breach of contract “is one arising from the type of speech and petitioning activity that is protected by the anti-SLAPP statute.” (See follow-on decision in Navellier v. Sletten, First District Court of Appeal.)

Rusheen v. Cohen
California Supreme Court, 2006 (review of Los Angeles Co. Superior Court)
37 Cal. 4th 1048, 39 Cal. Rptr.3d 516

Rusheen sued Cohen for abuse of process, for allegedly filing false declarations on the issue of service, and conspiring to execute the resulting default judgment against Rusheen. Cohen filed an anti-SLAPP motion, asserting that Cohen’s conduct was privileged under Civil Code section 47(b) as communications in the course of a judicial proceeding. The trial court agreed and granted the motion. The appellate court reversed on the grounds that executing on the improper default judgment was unprivileged, noncommunicative conduct.

The California Supreme Court reversed, holding that the anti-SLAPP motion should have been granted. It concluded that where the gravamen of the complaint is a privileged communication (i.e., allegedly perjured declarations of service) the privilege extends to necessarily related noncommunicative acts (i.e., act of levying).

S.B. Beach Properties v. Berti
California Supreme Court, 2006 (review of Santa Barbara Co. Superior Court)
39 Cal. 4th 374, 46 Cal. Rptr.3d 360

When plaintiffs voluntarily dismissed their entire action without prejudice before defendants filed an anti-SLAPP motion, defendants could not recover attorney fees and costs pursuant to 425.16, subsection (c).

Simpson Strong-Tie Co. v. Gore
California Supreme Court, 2010
49 Cal.4th 12, 109 Cal. Rptr. 3d 329

In 2004, defendant attorney Pierce Gore placed several newspaper ads advising deck owners of potential legal claims against plaintiff Simpson Strong-Tie. The company sued Gore, listing a litany of claims like trade libel and unfair business practices, for implying that the company’s galvanized screws were defective, and sought to enjoin the ad. When Gore filed a special motion to strike, Simpson Strong-Tie invoked C.C.P. §425.17(c), the commercial speech exception. The trial court rejected Simpson Strong-Tie’s argument and granted the special motion to strike, which was upheld on appeal.

In affirming the Court of Appeal, the California Supreme Court looked at the parameters of the commercial speech exception under 425.17(c). The Court held that the burden of showing the applicability of 425.17(c) falls on the plaintiff. The Court then clarified that the purpose of the exception was to stop businesses from using advertising to “trash talk” competitors. Gore sold legal services, not screws—he was not a business competitor with defendant, thus his ad was not the type of speech targeted by subsection (c). Under the two-step analysis, the Court found that Gore’s speech was protected.

Soukup v. Law Offices of Herbert Hafif
California Supreme Court, 2006 (review of Los Angeles Co. Superior Court)
39 Cal.4th 260, 46 Cal. Rptr.3d 638

Plaintiff Peggy Soukup filed a SLAPPback action for abuse of process and malicious prosecution against her former employers after prevailing on her anti-SLAPP motion. Plaintiffs’-turned-defendants’ attorney Herbert Hafif then filed a special motion to strike her complaint.

The California Supreme Court considered the legislative purpose of C.C.P. §425.18(h), which precludes a SLAPPback defendant from filing a special motion to strike if the underlying action was illegal as a matter of law; the statute also “stack[s] the procedural deck in favor” of SLAPPback plaintiffs. Finding that the SLAPP Hafif filed against Soukup did not violate various statutes and was not a “sham” lawsuit, the court ruled that Hafif did not break the law in asserting claims against Soukup, despite the fact that his claim was dismissed as a SLAPP. Ultimately, the court found that Soukup showed a probability of prevailing on the malicious prosecution claim and remanded the case for further proceedings.

In a separate motion, Hafif’s anti-SLAPP appellate counsel Ronald Stock sought to strike Soukup’s claim, arguing that his limited involvement in appealing the anti-SLAPP motion was insufficient to sustain a malicious prosecution claim. The Court rejected this argument based on the evidence.

Taus v. Loftus
California Supreme Court, 2007 (review of Monterey Co. Superior Court)
40 Cal.4th 683, 54 Cal.Rptr.3d 775

Nicole Taus sued defendant authors for defamation and other torts after a journal published articles relating to a psychologist’s study about her as a child. The California Supreme Court reversed the appellate court on several grounds, but affirmed its finding that Taus could proceed with her claim of improper intrusion into private matters.

While recognizing that it is common practice for reporters to conceal motives in newsgathering, the Court drew a distinction, finding that this protection was not so broad as to allow a person to falsely pose as the colleague of a mental health professional to elicit highly personal information about a subject from the subject’s relative or close friend. While a single claim survived on appeal, the Court awarded costs and fees to defendants because the majority of plaintiff’s claims should have been dismissed under the anti-SLAPP statute.

The Court also expressed reservations about the appellate court’s unequivocal conclusion that Taus was not a limited public figure based on her consent to be the subject of a prominent medical study, and revealing her face and voice in publicly viewed materials.

Varian Medical Systems, Inc. v. Delfino
California Supreme Court, 2005 (review of Santa Clara Co. Superior Court)
35 Cal. 4th 180, 25 Cal. Rptr.3d 298

“The perfecting of an appeal from the denial of a special motion to strike automatically stays all further trial court proceedings on the merits upon the causes of action affected by the motion.”

Vargas v. City of Salinas
California Supreme Court, 2009 (review of Solano Co. Superior Court)
46 Cal.4th 1, 92 Cal.Rptr.3d 286

The City of Salinas distributed a newsletter explaining Measure O, a contentious ballot measure that would phase out the city’s utility tax. Supporters of the ballot measure sued the city for expending public funds on the newsletter, claiming it was an impermissible election communication as defined by the Government Code.

The California Supreme Court affirmed the appellate court’s granting of defendants’ anti-SLAPP motion, but based its conclusion on a different standard than the Court of Appeal. The Court clarified that government entities and public officials are entitled to anti-SLAPP protection. The Court concluded that plaintiffs failed to establish a prima facie case that defendants’ conduct was unlawful and affirmed the Court of Appeal’s judgment granting defendants’ anti-SLAPP motion.

Wilson v. Parker, Covert & Chidester
California Supreme Court, 2002 (review of Riverside Co. Superior Court)
28 Cal. 4th 811, 123 Cal. Rptr.2d 19
Note! Opinion overruled by Assembly Bill 1158 (2005), amending Code of Civil Procedure section 425.16(b)(3).

The issue presented is whether, in an action for malicious prosecution, denial of an anti-SLAPP motion in the underlying action establishes that there was probable cause to support the action, thus precluding a suit for malicious prosecution. The court says it does when the denial is predicated on a finding that the action had potential merit.

Zamos v. Stroud
California Supreme Court, 2004 (review of Los Angeles Co. Superior Court)
32 Cal. 4th 958, 12 Cal.Rptr.3d 54, 87 P.3d 802

The tort of malicious prosecution includes continuing to prosecute a lawsuit discovered to lack probable cause. (This decision expands the tort, which previously was limited to commencing an action without probable cause.) Evidence to this effect is sufficient to defeat a special motion to strike a complaint for malicious prosecution.

Advice if Creditor is Increasing balance After Judgment

23 Oct

I had my wages garnished on account of a default, and made all the payments. Now a creditor is claiming more…Help!

I had a collection account with a major creditor; after many calls and correspondence from to arrive at a payment plan I could afford, I never received a response until I was service with a Civil Lawsuit and my wages were garnished from 9/2007 until 7/2008 for payment of this debt. I never disputed the amount owed, unfortunately, no one would work with me. I was contacted by phone in October, 2008 (4 months later) by the law firm representing the creditor. They have indicated that I still owe “interest” on this matter and filing fees. I received another call 11/13/08. Also, thru the regular mail, I received an unrecorded copy of a judgement indicating the interest due and fees. The law firm rep. will not provide me with any statement of what this “interest” amount is calculated on or even a rate. Just short of hiring an attorney myself (which I should have done years ago), how do I proceed? It’s been a financial nightmare that I could not avoid due to disability and huge medical bills. Thank you for any insight you can provide.

20090709-foreclosuredebt-

Most states do allow creditors to add interest, collection costs, and attorney’s fees to the balance of a judgment after the judgment is entered by the court, but the amount the creditor can add and how it must go about this process will largely depend on your state of residence. For example, in California, a judgment creditor must file with the court a document called a “Memorandum of Costs after Judgment, Acknowledgement of Credit, and Declaration of Accrued Interest,” in which it outlines the costs it has incurred in its efforts to enforce the judgment, the interest accrued, and the amount it has received in payments to reduce the judgment balance. Once the creditor files this statement with the court, the court will review the claimed costs and interest, and unless you object to the claim, will likely add the request amount to the judgment balance. The creditor is required to mail you a copy of this document before it is considered by the court, giving you an opportunity to file an objection; if you do file an objection, the court will likely set the matter for a hearing, allowing you and the creditor to argue your cases to the judge.

While the process is similar in many other states, please remember that the procedure outlined above is specific to California, and is only provided as an example of the fact that judgment balances can have interest and fees added. Regardless your state of residence, a judgment creditor usually cannot increase the balance owed on a debt arbitrarily without court approval. Even though you are receiving collection calls claiming you owe additional money on this debt, if you have not received a statement from the creditor outlining what charges it claims you now owe, you should be cautious about making any additional payment. I encourage you to consult with an attorney in your state of residence to discuss the situation you are facing and to determine what steps you can take to protect yourself from arbitrary claims by this judgment creditor. You may also wish to contact the court which entered the judgment against you to inquire about any request for increase in the judgment balance the creditor may have filed without notifying you.

You should remember that in many states, the amount of interest that can be charged on judgments is limited by law; for example, California law limits judgment interest to 10% per annum. If you suspect that the creditor is claiming interest at a rate higher than that allowed by your state law, or requesting fees which are unreasonable, you may wish to consult with an attorney to determine what recourse is available to you.

If the creditor follows the correct procedure to have its costs and legal interest added to the judgment balance, you may have no choice but to pay the amount claimed. However, I would be wary about a call from a creditor demanding payment for costs and interest for which it refuses to provide an itemized statement. As I said, many states (if not most) require judgment a creditor to file a request with the court which issued the judgment to request an increase in its fees; if the creditor has not taken that step in your case, you may simply be dealing with a rouge collector who is trying to squeeze money out of you which is not rightfully owed. I again recommend that you consult with an attorney in your state to determine what actions the creditor can take in this situation and what steps you can take to protect yourself.

I wish you the best of luck in resolving your dispute with this creditor, and hope

Motion for an order taxing costs in California

23 Oct

Filing a motion for an order taxing costs in California is the topic of this blog post. Also discussed is requesting an order striking certain costs claimed in a Memorandum of Costs.

The motion is made pursuant to California Rule of Court 3.1700(b)(1). Taxing costs means that the costs are reduced to a certain amount because the claimed costs are excessive for some reason, striking costs means that the costs are stricken because they are not authorized by law, or for other reasons.

Any party who wants to have certain costs taxed or stricken must serve and file their motion within the time limits specified by California law. Any motion for an order taxing or striking costs in California must be served and filed 15 days after service of the cost memorandum. If the cost memorandum was served by mail, the period is extended as provided in Code of Civil Procedure section 1013. See California Rule of Court 3.1700(b)(1).

And the party filing the motion must also specify which item or items listed on the Memorandum of Costs should be taxed or stricken, unless they are objecting to the entire cost memorandum.

“Unless objection is made to the entire cost memorandum, the motion to strike or tax costs must refer to each item objected to by the same number and appear in the same order as the corresponding cost item claimed on the memorandum of costs and must state why the item is objectionable. ”  See California Rule of Court 3.1700(b)(2).

Note that there is also a deadline for serving and filing a Memorandum of Costs.

California Rule of Court 3.1700(a)(1) states that,  “A prevailing party who claims costs must serve and file a memorandum of costs within 15 days after the date of mailing of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first. The memorandum of costs must be verified by a statement of the party, attorney, or agent that to the best of his or her knowledge the items of cost are correct and were necessarily incurred in the case.”

If the Memorandum of Costs was not served and filed in accordance with the law, a motion to strike the entire cost memorandum could be filed.

Section 1033.5 of the Code of Civil Procedure states in pertinent part:

“Any award of costs shall be subject to the following:

Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.

Allowable costs shall be reasonable in amount.”

Even if a cost claimed is authorized by law, if it was not reasonably necessary to the conduct of the litigation, or is not reasonable in amount, a motion taxing costs can be filed.

And once items in a cost memorandum are properly objected to, the burden of proof is placed on the party claiming them as costs. See Ladas v. California State Auto Assn. (1993) 19 Cal.App.4th 761, 774, rehearing denied. (internal citations and quotations omitted.)

Requesting an order striking certain costs is also appropriate in certain situations.  This is due to the fact that many times a party will attempt to claim costs that are not authorized by any California law, such as fees for experts that were not ordered by the Court, for example, or attorney fees when there is no contractual or other basis for claiming them.

Over 10 years ago I worked on a case where the opposing party attempted to claim costs for witness fees where the witness testified in Court that they had not been paid for their appearance!

Because right to costs is governed strictly by statute, court has no discretion to award costs not statutorily authorized. See Ladas v. California State Auto Assn. 19 CAl.App. 4th, supra at 774, rehearing denied. (internal citations and quotations omitted.)

Judgment Debtor Hearing in California

23 Oct

Judgment Debtor Hearing


If you win your case, the money the court awards you is the Judgment. You are the Judgment Creditor. The person who owes you money is the Judgment Debtor.

If you don’t know what assets the Debtor has, you can ask for a Judgment Debtor Hearing. At the hearing, you can ask questions about the debtor’s job, bank account, home, car, and other assets. For a list of questions to ask, print a Judgment Debtor Questionnaire to take with you to the hearing. This information helps you decide where to send the Sheriff to collect your money.

Requesting a Judgment Debtor Hearing

  1. Fill out the form: Order to Produce Statement of Assets and to Appear for Examination.
  2. File the form with the clerk’s office at the court where your case was heard.
  3. Pay the filing fee.
  4. The clerk will provide you with copies of the completed form with a hearing date. You must have the Sheriff or a Registered Process Server personally serve the form to the Judgment Debtor at least 10 days before the hearing,
  5. If you want the Judgment Debtor to bring documents to the hearing you should also serve them with a subpoena. A subpoena is the only document you can serve yourself. If you don’t care to serve it yourself, you can have it served.

Information the Debtor should bring to court

You want the Judgment Debtor to bring financial information that will help you collect your money.

Here are examples of what you should ask the Debtor to bring to court:

  • Driver license
  • Social Security Card
  • Marriage certificate
  • Name and address of employer
  • Most recent paycheck receipts or stubs
  • All bank account statements
  • All real estate deeds for property owned by the Debtor

To order the Debtor to bring this information, you should subpoena the information from them.

Getting a Subpoena

A Subpoena Duces Tecum orders the Debtor to bring financial information to court. To get a subpoena:

  • Fill out the form: Subpoena for Personal Appearance and Production of Documents.
  • File the form with the court clerk’s office. There is no fee.
  • Serve the Debtor at least 10 days before the hearing.

If the Debtor lives far away

If the Debtor lives more than 150 miles away from the court where the judgment was entered, you must request a hearing at a court in the county where the Judgment Debtor lives. Contact a Small Claims Advisor to find out the procedure.

The hearing

At the hearing, you question the Debtor about his job, bank account, home, car, and other assets. You can have an attorney represent you at the hearing if you wish. The hearing is not recorded, so be prepared to write down the information you get.

After the hearing

Use the information to have the Sheriff collect your judgment. If you did not get information that will help you collect your money, you can try again. You are allowed to ask for a Judgment Debtor hearing every 120 days.

If the Debtor does not come to court

If the Judgment Debtor fails to appear, you can ask the Judge to issue a bench warrant. A bench warrant orders the Judgment Debtor to be arrested if the police stop him. You must pay the Sheriff a fee to issue the bench warrant.

Court forms are available at California Courts – Forms. Select “Small Claims” from the pull down menu. Forms are also available at the Court Clerk’s office.
County of Los Angeles Department of Consumer and Business Affairs. Last change: May 19, 2015.

Default Judgment

23 Oct

Legal Guide: How to Enter a Default Judgment in California Personal Injury/Wrongful Death Cases

 

What is a Default Judgment?:

A defendant is “in default” as soon as the defendant fails to file a responsive pleading (e.g. an Answer or a Demurrer) within the statutory time limit.  This means little until the clerk “enters a default” against the defendant.  The plaintiff must make an application for the clerk to enter a default judgement.

Requirements Before You Can Enter a Default:

  • (1)  Defendant must be served with Summons and Complaint. Then Plaintiff must have a Proof of Service of Summons and Complaint and file it with the court.  Service may be accomplished by publication.  [CCP 585(c)].
  • (2)  The time for responding to the Summons and Complaint must have passed. Defendant has 30 days after service is complete (see below) to serve a response.  [CCP § 412.20(a)(3)].
  • (3)  Defendant must have failed to file a responsive pleading to the Complaint. E.g. an Answer or a Demurrer.  Note:  Even if a defendant serves a responsive pleading, if it is not filed, plaintiff may obtain a default.
  • (4) Defendant must be served with a Statement of Damages. A statement of damages (Judicial Council Form Civ-050) lists the amount of monetary damages that the plaintiff seeks.   Personal injury complaints are not allowed to state the amount of damages sought (to protect defendants from negative publicity) however the law requires that the plaintiff inform the defendant of the specific monetary damages sought before a default can be taken  (This serves as a final reminder that the defendant may be on the hook if they fail to answer, see Greenup v. Rodman (1986) 42 C3d 822, 829).  Service must be accomplished in the same manner governing service of the summons—i.e., pursuant to CCP § 413.10 et seq. [CCP  413.10, CCP 425.11].   Note:  There are some pre-1993 cases that say defendant can be served by mail alone – these are out of date and incorrect.

When Has the Defendant Been “Served?”

  • Personal Service:  On the day of personal service.  [CCP § 415.10].
  • Substituted Service:  The 10th day after other copies are mailed.  [CCP § 415.20(a)].
  • By Mail (with Acknowledgment of Receipt):  On the date the defendant signs the Acknowledgment of Receipt.  [CCP § 415.30(c)].
  • By Publication:  28 days after first day of publication.  [Government Code § 6064].
    • Note:  When service is by publication, it is likely that a default will follow.  Therefore, it makes financial sense to publish the summons and a statement of damages at the same time.

Procedure For Entering a Default:

  • (1) Time Limit:  10 days after the time for service has elapsed.  If plaintiff waits longer, the court may enter an Order to Show Cause why sanctions should not be imposed.  [CRC 3.110(g)].
  • (2)  Make Sure That You Meet All The Requirements for Filing a Default. See above. This includes serving the defendant with the summons, complaint, and statement of damages,  and having the defendant fail to respond on time.
  • (3) File an Application For Entry of Default.  This should contain the following documents:
    • Request to Entry Default Form (Judicial Council form CIV–100) (including a Declaration of mailing copies to defendant and defendant’s counsel if known);
    • Proof of Service of Summons (unless already filed);
    • Statement of damages and Proof of Service of Statement of Damages..  [CCP § 425.11].
  • (4) Request A Default In One of Three Ways:
    • (a) Request a simple entry of defendant’s default (paragraph 1.a.-c.) – Note that getting a default entered is just the first step in obtaining a default judgement.
    • (b) Request a clerk’s default judgment (paragraph 1.a.-e.) – In some cases, after entry of defendant’s default, the court’s clerk is may enter judgment against the defendant without a court hearing or judicial action of any kind.  This is only allowed when (1) The action is one “arising upon a contract or judgment; and (2) the lawsuit seeks recovery of “money or damages only” in a fixed or determinable amount; and (3) defendant was not served by publication.  Therefore this option cannot be used in personal injury cases.
    • (c) Request a default judgment hearing by the court (paragraph 1.a.-e.) – In all personal injury cases, and all cases in which defendant was served by publication, plaintiff will need a court judgement.  This will require the plaintiff to “prove up” his case – meaning that the plaintiff will have to present evidence to the court, the court will consider the evidence, and then the court will enter a judgement.  See more on this process below.  [CCP 585; CRC 3.1800]
  • (5) Mail a Copy of the Application for Default to Defendant’s Last Known Address – there is a box on the Request for Entry of Default Judgement that must be filled out indicating that the attorney is mailing a copy of the Request for Entry of Default to defendant’s last known address.  It is fine to mail the copy to the defendant the same day the Request is filed with the court.
  • Plaintiff Applies for Judgment

Obtaining a Court Judgement

Step 1: Submit the Proper Documentation.  [CCP 585; CRC 3.1800]

  • (1) Case summary: Include the facts of the case, the parties, and the plaintiff’s claims/injuries. [CRC 3.1800 (a)(1)]
  • (2) Declarations: A declaration, sword under oath, or other admissible evidence in support of the judgment requested. [CRC 3.1800(a)(2)]
  • (3) Interest computations: If you are asking for interest on the judgement, you need to show how you calculated it. [CRC 3.1800(a)(3)]
  • (4) Costs memo: What costs has the lawyer expended on the case so far.  Use Paragraph 7 of the Judicial Council form CIV-100 for this. [CRC 3.1800(a)(4)].
  • (5) Affidavit re military service: State that defendants are not in the military. Use Paragraph 8 of the Judicial Council form CIV-100 for this.[CRC 3.1800(a) (5)].
  • (6) Proposed judgment: A proposed form of judgment. [CRC 3.1800(a)(6)].
  • (7) Dismissal of Other Parties or Applications for Seperate Judgement – If there are other parties to the case, either request that they are dismissed, or request a separate judgement against them.  [ CCP 579, CRC 3.1800(a)(7)].
  • (8) Exhibits – Exhibits as necessary. [CRC 3.1800(a)(8)].  Note:  If you are using photocopies, you may need a declaration to authenticate the records.
  • (9) Request for attorney fees if allowed by statute or by the agreement of the parties.  Note: Check with the court whether it has established a fee schedule for default judgements.  Many courts have established a schedule of fees.
  • (10) Proof of publication (In cases where defendant was served via publication): An affidavit by the newspaper publisher showing the dates on which summons was published.

Step 2:  Hearing Date is Set by Court Clerk.

Upon receiving the above documents, the court clerk may set the matter for hearing before a judge.  In some counties the plaintiff has to call the court to find out when and where the hearing will be.  Check with the local court as to their procedures.  In some counties the clerk simply gives the papers to the judge, and the judge then decides whether he or she can render judgement on the submitted papers, or whether a live “prove up” hearing is required.

Step 3:  Prove Up The Damages

Whether done by declarations or by a live hearing, the plaintiff will have to prove up their damages be submitting evidence of the extent of their damages.  The judge acts as gatekeeper to make sure that a reasonable judgement is entered.  Check with the local court as to whether the judge prefers live testimony or declarations/affidavits.  [CCP 585].

Time Limit for Entering a Default:

  • Mandatory Dismissal of suit:
    • If defendant is not served with summons and complaint within 3 years after the complaint is filed;
    • OR
    • If no proof of service is filed with the court within 60 days after expiration of the 3–year period (unless defendant appeared in the action by that time). [CCP §§ 583.210, 583.250].
  • Discretionary Dismissal of Suit:
    • If defendant is not served within 2 years after the action is commenced. [CCP § 583.420(a)(1)]

Effect of Entry of Default:

  • If a default is successfully entered by a plaintiff, it instantly cuts off a defendant’s right to appear in the case.  In other words, the plaintiff wins the case, and the defendant is not allowed to make any arguments on the merits of the case.  The defendant may however move the court to set aside the default and allow an answer.
  • While in default Defendant has NO RIGHT to appear at prove-up hearing.  [Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 CA3d 381].

Defendant’s Remedies to Default:

  • A defendant that had been defaulted against has two options, he may (1) Request the court set aside the default, or (2) appeal the default.

This page is not legal advice, and there is no guarantee that this information is up to date.  If you need legal advice, you should contact a lawyer.

This page was created by and (c)  Noah Schwinghamer, a Sacramento Injury Lawyer.  If you would like to copy this information, please request permission.   Please feel free to link to this page.

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