LCPFV, Inc. v. Somatdary Inc. (Cal. Ct. App. - Nov. 11, 2024)

On occasion, I'll read an opinion by Justice Wiley that I feel is too harsh or curt (or both).

Not here.

A plumber allegedly didn't do a great job on work that cost $47,883.40, so the owner of the building had to hire someone else to fix it. The worker who subsequently fixed the problem charged the owner less than $43,883.40, but the owner nonetheless sued the original plumber for a fair piece of change. When the first plumber eventually defaulted, the owner submitted a default package asking for over $1 million, including over $300,000 in attorney's fees. The trial court said "No way" and awarded $120,319.22 total, and the owner appealed.

The Court of Appeal affirms. And isn't shy about explaining why.

Read the whole opinion -- it's 25 pages -- for a full understanding of why the trial court (as well as the Court of Appeal) thought that the owner was unnecessarily churning the case. Plus there's the whole "lack of candor" portion of the opinion. I'm fully on board for everything that Justice Wiley says on this score.

I nonetheless will mention that a small portion of the opinion seems erroneous to me.

The plaintiff here propounded a number of case-dispositive requests for admission, which the defendant didn't respond to (because no one represented him at that point). That's a time-worn strategy, and hardly unique to this particular case.

Justice Wiley takes umbrage at this practice, saying that it was unnecessary since the defendant had already essentially defaulted. I fully agree with that.

But he also attacks the practice writ large. He quotes the Rutter Group to say that "requests for admissions are useful 'only as to matters of lesser importance (for which they may not be necessary, since unimportant matters can usually be handled by stipulation with opposing counsel).'" And then goes on to say that, as a general matter, propounding RFAs on the ultimate issues in the case is "troubling," "not ‘in conformity with the spirit of the law,’" and does not "serve substantial justice.’”

I understand that there are occasional cases that so state, but that attitude seems flatly wrong to me. It's just fine, in my view, to propound case-dispositive RFAs, even at the very outset of the case. Mind you, if you do so, the RFAS may well not be successful, since the other side will almost surely deny them and the trial court will almost equally surely find "substantial justification" for such denials given the early stage of the litigation and hence deny cost of proof sanctions even if you establish the truth of the requests at trial. But if you want to give it a shot, I see nothing improper about the practice.

Moreover, I think the practice has affirmatively beneficial results as well. Sometimes, even early on in the litigation (and especially thereafter), there is in fact no substantial justification whatsoever to deny even case-dispositive RFAs. Say, for example, you rear-end someone on a bridge. Or drive drunk and smash into someone's house. That's pretty much certainly your fault. If you nonetheless deny liability in your answer, well, a case-dispositive RFA on an ultimate fact can -- and should -- be coming your way. And if you have the gonadular fortitude to deny the thing, well, if I'm the judge, I'm imposing cost of proof sanctions every day of the week if liability is ultimately found. Rightly so.

RFAs are designed to narrow disputes, and one (critical) way they do so is to impose a burden on those litigants who might wrongfully create disputes where none actually exist. That's equally true for both "important" (e.g., case dispositive) portions of the case, as well as less portions. RFAs are valuable in both settings.

So I'm 100% on board for Justice Wiley's language as applied here. But I don't think that language applies more broadly, and am worried that a published opinion contains language that litigants might well use to defeat the value (and use) of case-dispositive RFAs.

The Comedy Store v. Moss Adams LP (Cal. Ct. App. - Nov. 14, 2024)

You've got to pull quite a few doctrinal moves to make this opinion work. But Justice Mori pulls them all. The Court of Appeal holds that since the defendant's forum selection clause (which required all lawsuits to be filed in Washington state) also contained a waiver of the right to a jury trial, which is enforceable in Washington but not in California, it's not entitled to a dismissal of the California state court lawsuit on forum non conveniens grounds.

Even if the defendant stipulates to waive the impermissible (in California) jury trial waiver provision.

I thought that the equity of this result was best expressed in one particular paragraph near the very end of Justice Mori's opinion, in which she says -- quite correctly, in my view:

"Predispute jury waivers have been unenforceable in California for nearly 20 years. (See Grafton, supra, 36 Cal.4th at p. 956.) According to a declaration from Moss Adams’s general counsel, engagement agreements similar to the one signed by the Store have been in use throughout this time. If we were to hold that Moss Adams’s unilateral stipulation satisfied its burden of proof under Verdugo, it would have little incentive to take the jury waiver out of the agreements it provides to California clients. It can simply wait and see if a client who signs the agreement sues it in California and argues the forum selection clause impinges on the client’s right to a jury trial. Then Moss Adams can provide a non-enforcement stipulation. However, if the client does not recognize its right to a jury is unwaivable, it may end up abiding by the terms of the agreement and litigating the case in Washington without a jury."

Yep. Spot on right.

In re Baby Girl R. (Cal. Ct. App. - Nov. 12, 2024)

Let's begin the week with the only published appellate opinion in the last four days. Albeit a somewhat depressing one. The facts:

"S.R. and Baby Girl R. were transported by ambulance to a hospital shortly after S.R. gave birth in a homeless encampment. The identity of Baby Girl R.’s father is unknown. S.R. informed hospital staff she was unaware of her pregnancy and was using methamphetamines daily. Baby Girl R. tested positive for the drug and exhibited withdrawal symptoms. The hospital placed S.R. on an involuntary psychiatric hold as she displayed paranoia, delusions, and aggression. When the hospital discharged S.R. a few days later, she returned to the homeless encampment and left Baby Girl R. at the hospital. . . . Despite diligent search efforts, the Department was unable to locate S.R. after she left the hospital."

Man.

It's been over a year now, by the way, and they still haven't found the mother.

There's at least some potential good news, though. They originally placed Baby Girl R. in foster care. But while the present appeal was pending, the trial court apparently placed her with her maternal grandparents.

So at least there's some hope there.

Grand Canyon University v. Bolton (9th Cir. - Nov. 8, 2024)

I gotta be honest that I liked the district court's decision better than the Ninth Circuit's in this one.

It's a summary judgment ruling, so maybe reasonable minds could perhaps differ. But it's a challenge to an administrative ruling, so the agency's decision needs to be "arbitrary and capricious" to be overturned, and that's a super difficult standard.

As I see it, there's pretty ample evidence that Grand Canyon University's purported "transition" from a for-profit corporation to an alleged nonprofit is basically a scam. (Which, in very loose -- and admittedly opinionated -- language on my part, is what the Department of Education essentially concluded.) You can read the whole opinion for yourself for the details. But they basically fold the existing for-profit entity into an existing nonprofit but then "capture" the nonprofit, plus get basically all the tuition revenue flowing to the purported nonprofit.

(Here are some of the mind-numbing details, according to the opinion's recitation of the DOE's views:

"The Department concluded that the “primary purpose” of the GCE-Gazelle transaction “was to drive shareholder value for GCE.” The Department based this conclusion on the purportedly disproportionate 60% share of GCU’s revenues to which GCE was entitled under the transaction, which included revenue from operations to which GCE was not obligated to “provide[]” any “services” under the MSA. The Department also found that, when taking into account payments on the loan under the Credit Agreement, GCE would be “receiving approximately 95%” of the university’s revenues. “[E]qually concerning” to the Department was its view that GCU was a “captive client” under the transaction, given the initial seven-year term of the MSA and the substantial financial payment that the university would have to make in order to terminate the agreement. The Department concluded that “GCU d[id] not meet the operational test’s requirement that both the primary activities of the organization and its stream of revenue benefit the nonprofit itself.” According to the Department, “[t]his violates the most basic tenet of nonprofit status—that the nonprofit be primarily operated for a tax-exempt purpose and not substantially for the benefit of any other person or entity.” The Department also stated, as “additional support” for its conclusion that GCU was not entitled to nonprofit status, that Gazelle was “not the entity actually operating” the university under the Department’s regulations. See 34 C.F.R. § 600.2 (stating that a HEA nonprofit must be “operated by one or more nonprofit corporations or associations”); 20 U.S.C. § 1003(13) (same). The Department reasoned that the board “responsible for managing and overseeing the University” consisted predominantly of GCE employees."

Pretty damning, in my view. As well as a sufficient basis for calling GCU not a "true" nonprofit -- with all of the various financial advantages and benefits from the Department of Education that arise alongside such a status.

I understand Judge Collins' hypertechnical (IMHO) argument to the contrary. I'm just not confident that the DOE's opposite conclusion is genuinely arbitrary or capricious, or that (as the panel found) it really applied an inappropriate legal standard here.

At a minimum, it seems to me like they reached a result with which I'm entirely comfortable.

But if reasonable minds could perhaps differ, so be it.

In re Marriage of Diamond (Cal. Ct. App. - Nov. 5, 2024)

I thought it was very nice of Justice Feuer to spend 32 pages carefully analyzing this appeal, which affirmed the trial court's rejection of a self-represented litigant's attempt to vacate a marital dissolution judgment in which she failed to show up for trial (or respond to discovery, or basically do anything). The opinion exhaustively discusses the relevant evidence, is very careful about the underlying standards, and takes the issues seriously. All this despite the fact that, in my view, the proper outcome is crystal clear, particularly since the trial judge found the appellant not credible (for more than sufficient reasons).

I certainly feel bad for the appellant, and am confident that Justice Feuer does too. She was clearly depressed during a period of time, and did not handle her divorce (or mental health during that period) well. But she had plenty of notice and plenty of opportunities to show up, and failed to do so, even as she was able to successfully participate in a variety of events. So, yes, I feel bad, but the proper result is fairly clear. (I'm also quite confident that the trial court rightly awarded custody of the children to the father under the circumstances.)

One thing that you learn about the appellant midway through the opinion is that she's an attorney, which is ironic given her failure to appear in the divorce action. If there's anything you'd think an attorney would know to do, it's to keep in touch with her attorney and/or show up at trial.

But I get it. She was depressed. She simply didn't want to deal. Not a sufficient excuse under the particular circumstances here (and given the evidence presented below), but understandable.

Parenthetically, I also thought it was interesting that when I looked up the appellant's name on the State Bar's website. All three of the attorneys with that same name ("Susan Diamond") are currently ineligible to practice law. The one at issue here (in LA) is suspended for failure to pay child support, failure to pay bar fees, and failure to satisfy the MCLE; the second (a fellow HLS grad!) just recently went inactive last year after practicing law for 40 years; and the third (in Sacramento) was suspended just four months ago for client trust account noncompliance (oops!).

Three for three.

Anyway, a very nice opinion by Justice Feuer, who clearly gives this appeal the careful attention it deserves (and perhaps even more).

Mountain View P.D. v. Krepchin (Cal. Ct. App. - Nov. 4, 2024)

I seriously hope that Mr. Krepchin gets some assistance with his mental heath. But, in the meantime, I completely agree with the Court of Appeal that he shouldn't possess any guns.

Good luck, Mr. Krepchin. Things can get better.

Martinez v. Superior Court (Cal. Ct. App. - Nov. 4, 2024)

I understand where the Court of Appeal is coming from here. The Legislature may well allow you to retrospectively withdraw your guilty plea -- for example, when you weren't advised at the time of the immigration consequences of that plea. But that doesn't mean that the state is barred from refiling those charges after the resulting dismissal. The statute doesn't expressly say that refiling is barred, and in some circumstances, I could totally understand why refiling would be permissible.

So the basic holding is something that doesn't seem to me out of this world. Under those circumstances, I can see why the Double Jeopardy clause doesn't necessarily bar refiling, the statute doesn't, etc.

But the situation here involves someone who's served his original sentence -- namely, probation. When the Legislature says that, after you've successfully served such a sentence, you can withdraw your plea and get the charges dismissed, it seems a bit bizarre to say that the state can then refile those same charges. And, to make matters worse, to say that the state can now refile those charges as a felony even though the California Supreme Court has said that "when a court has granted relief under section 17, subdivision (b), the offense is 'deemed a ‘misdemeanor for all purposes.’"

Doesn't it seem crazy to allow the state to refile the charges after you've served your entire sentence and to potentially now seek to incarcerate you for a longer period as a result of your successful petition under a statute that the Legislature passed to ameliorate the consequences of your prior conviction?

The Court of Appeal responds to that basic point by saying that "at this stage of the proceedings, whether the state may seek additional punishment is not before us." True enough, I guess. But that's the mountain that astrides the molehill. If the state isn't allowed to seek additional penalties beyond the ones that you've already served, then what's the point of allowing refiling? And if the point of the statute was to ensure that there aren't additional penalties, then it seems to me that allowing refiling would impermissibly conflict with the core purpose of the statute, and be improper even if the statute didn't expressly say whether such refiling was permissible or not. (That matters; just like preemption can be found even if its implied rather than express, so too can a statute sometimes require something even though the Legislature didn't pass a statute that contains those exact words.)

So it seems to me important whether additional punishment is allowed, even though the Court of Appeal doesn't feel like it needs to reach that issue at this point.

It seems to me like it nonetheless matters. A ton.