The e-magazine of the Solo and Small Firm Section of the California Lawyers Association
Renee N. G. Stackhouse, Chair
San Diego, CA
Here's your December update of what's happening in the #SSF world, complete with our new hashtags to use and to look for on social media. You can find us on Facebook and Twitter.
The Solo & Small Firm and Workers Compensation Sections of CLA joined forces to submit comments to The State Bar in response to its request for public comment on the statutorily mandated review and study being conducted by its Malpractice Insurance Working Group. The study is considering the advisability of mandating malpractice insurance for attorneys licensed in California. SSF took the position that it would disproportionately impact smaller practices and that there was no particular need for these practices to be insured. Mandatory malpractice also raises the question of whether minimum coverage amounts would be required, otherwise the mandatory nature would be almost meaningless. At the same time, mandatory minimum coverage cannot be rationally determined across the industry as a whole. Additionally, mandatory malpractice would negatively impact SSF retired members who retain active status for volunteer and pro bono work. As such, and while SSF supports the protection of the public, SSF spoke out against implementing mandatory malpractice insurance.
For 2019, Solo & Small Firm Section has re-imagined our Attorney of the Year Award and created the Excellence in Service award and Excellence in Practice award. The Excellence in Practice award will recognize service that made a significant impact on the legal community and/or the public. The Excellence in Service award will recognize an SSF attorney who demonstrated leadership and dedication to the legal profession, contributes to the positive image of the legal profession and made exceptional accomplishments in the law or made a significant impact on the practice of law. Both awards will be presented at the upcoming Solo Summit. You can find more information about the awards below.
Make sure to nominate someone who shines!
The Holidays can be a difficult time of year. What we do is hard. If you're hurting, I'm sorry you're hurting. You are not alone in this. If you are thinking about hurting yourself, I hope you will tell someone how you feel. If you feel like there's no one to listen, this number will connect you right away to someone who cares: 1-800-273-8255. It's confidential. It's 24/7. You can also get more information here.
Why is SSF talking about suicide during the Holidays? Because everyone in our profession knows that it has one of the highest stress and suicide rates. If you can't talk about it, it's out of control. Let's support each other and provide a safe place to encourage our colleagues to talk about it. Let's take back control. Let's listen and be there for each other. Let's take the time to care.
#IAmSSF #YouAreSSF #WeAreSSF
SSF members are, by definition, small units. Together we make a big difference. Together we are SSF, a state-wide section representing and advocating for the best interests of our members, educating our members and shining a spotlight on our members. You can be a part of that leadership. As this year winds down, start thinking about what next year holds for you and your firm. We will start looking for diverse, strong, self-starters to join our Executive Committee early in 2019, so think about whether that could be you. We also offer state-wide visibility through sponsorships that work for a SSF budget.
Dream big. We're here to help you make it happen.
Renee N.G. Stackhouse
Nominate a Worthy Solo or Small Firm Practitioner Who:
Please refer to the forms for information regarding eligibility requirements. The forms can be found below:
Nomination Deadline: January 25, 2019
Some of the most popular and essential SSF Webinars are being re-offered through the CLA online catalogue! You can view the schedule of upcoming webinars here. To see the full catalogue of MCLE available through CLA please visit cla.inreachche.com.
The 21st Century Law Firm
June 13-15, 2019
Hyatt Regency, Huntington Beach, CA
The California Lawyers Association is excited to announce the re-launch of the Solo & Small Firm Summit to provide several days of sought-after educational programs designed to address the needs of legal professionals who work in a solo or small firm practice — from business management and technology to substantive law updates in areas commonly practiced in a solo or small firm setting. The Summit agenda also will include networking events, mentoring circles, and a vendor showcase with products and services unique to the solo or small firm practitioner.
For updates on the Solo Summit program and registration, visit us at calawyers.org/Solo-Small-Firm.
By Steven L. Krongold/Irvine, CA
Martinez v. Eatlite One, Inc., No. G055096 (4th Dist., 10/3/18)
Defendant made a 998 offer in the amount of $12,001, but was silent as to whether costs were included or excluded. Plaintiff never responded, and the 998 offer expired. The case proceeded to trial, and the jury found in favor of plaintiff on all claims. The jury awarded $11,490 in damages to plaintiff. Trial court awarded $4,095.07 in costs and $60,000 in pre-offer and post-offer attorney fees to plaintiff. The court reasoned the 998 offer “was silent as to excluding costs or attorneys’ fees[ so] pre-offer costs, including attorneys’ fees are added to the amount of the verdict for the purposes of deciding whether the ‘judgment’ was greater than the . . . 998 offer.” Reversed. The value of defendant’s 998 offer, which was silent on costs, necessarily included $12,001 plus plaintiff’s pre-offer costs and fees defendant would have been liable for if plaintiff had accepted the offer. This is consistent with the purpose of section 998, which “is to encourage settlement by providing a strong financial disincentive to a party—whether it be a plaintiff or a defendant—who fails to achieve a better result than that party could have achieved by accepting his or her opponent’s settlement offer.” (Bank of San Pedro v. Superior Court (1992) 3 Cal.4th 797, 804, italics added.) Because, for comparison purposes, the pre-offer costs and fees are added to both the jury award and the (silent on costs) 998 offer, we may simply compare the jury award with the 998 offer. Thus, the $11,490 jury award is less than the 998 offer. Plaintiff did not obtain a “more favorable judgment.”
Attorney Fees as Damages—Admissibility of Evidence
Lloyd Copenbarger, Trustee v. Morris Cerullo World Evangelism, Inc. (4th Dist., 11/13/18)
Defendant MCWE breached a settlement agreement by not timely dismissing with prejudice the underlying unlawful detainer action. As damages, the court awarded plaintiff $118,000—the amount of attorney fees it claimed to have incurred in defending the U/D action. The court first noted but did not decide that plaintiff could recover fees as damages because had MCWE performed its obligations under the settlement agreement by dismissing the action, plaintiff would not have incurred the fees. The court did not decide the issue because it reversed on different grounds: a “wholesale failure of proof of the amount of damages.” At trial, plaintiff did not authenticate as business records its attorney invoices and admit them into evidence nor present testimony from its attorneys, or anyone else, of billing rates and work performed in the U/D action. Plaintiff offered only the testimony of the client. His testimony constituted rank hearsay and violated the secondary evidence rule. He did not know what the plaintiff’s attorneys did in the U/D action. As the evidence was insufficient to support the judgment, it was reversed with directions to enter judgment in favor of MCWE on the plaintiff’s complaint.
Attorney Fees—Prevailing Party
Jason Olive is a model and actor who contracted with General Nutrition Centers, Inc. (GNC) to use his likeness in its advertising campaign. GNC continued using Olive’s likeness in its advertising after its right to do so expired. Olive’s complaint alleged misappropriation of his likeness in violation of Civil Code section 3344 and sought restitution for GNC’s unjust enrichment. GNC initially denied Olive’s allegations but it eventually admitted liability. GNC made pre-trial offers to compromise in the amounts of $65,000, $150,001, and $200,000. During closing, Olive sought actual damages of $500,000 to $1 million, claw back of profits attributable to unauthorized use between $11.7 million on the low end and $35.2 million on the high end, and emotional distress between $500,000 and $1 million. GNC impliedly recommended actual damages of no greater than $4,800, and explicitly recommended no emotional distress damages or profits attributable to the unauthorized use.
The jury found Olive was entitled to $213,000 in actual damages and $910,000 in emotional distress damages. The jury also found Olive failed to prove any of GNC’s profits were attributable to the unauthorized use of his image, or that GNC acted with malice or fraud for the purpose of punitive damages.
The trial court determined that neither party prevailed because “the jury accepted neither party’s recommendation but instead awarded a middling sum amounting to a tie.” The decision was reversed. Olive achieved an undeniable victory on his section 3344 claim, even if there was a wide disparity between where each party began and ended in terms of the relief sought and the relief obtained. The fact that Olive received substantially less damages than what he sought does not defeat his prevailing party status because a complete victory is not required.
Due Process in School Disciplinary Hearing
Doe v. Regents, No. B283229 (2nd Dist., 10/9/18)
UCSB held a hearing to determine whether a student violated the code of conduct arising from an alleged sexual assault. The court held the student was deprived of a fair hearing when the Committee allowed a detective to testify about a single phrase from a report on the physical examination of the victim without requiring production of the entire report to the Committee and to the accused. The accused was denied a fair opportunity to cross-examine the detective and challenge the medical findings in the report. At the hearing, the victim was asked about the possible side effects of Viibryd, especially when combined with alcohol. She refused to answer the question, stating, “It’s my private medical information.” The student proferred the reasons for this line of inquiry: Viibryd “has many side-effects” that “become severe when alcohol is consumed . . . such as hallucinations and sleep paralysis and night terrors.” Sustaining this objection also denied the student due process.
Collateral Estoppel by Criminal Conviction
Kerley v. Weber, No. B282202 (2nd Dist., 10/3/18)
After Marcie Weber waived jury and agreed to a court trial, she was convicted of one count of theft from an elder or dependent adult under Penal Code section 368, subdivision (d). Weber’s victim, Johnston, was an elderly woman with dementia. Conservator of Estate, Sarah Kerley, filed a Probate Action in 2006, seeking recovery of the money that Weber and family members took from Johnston along with enhanced damages pursuant to Probate Code section 859. The court found that Weber’s criminal conviction established all the elements of elder abuse under Welfare & Institutions Code section 15610.30. The court also found that, based on her stipulation to the $700,000 restitution amount, Weber was estopped from claiming that she took less than that amount from Johnston. Based upon Kerley’s agreement that damages could be calculated based upon that amount of loss, the trial court awarded double damages in the amount of $1.4 million under section 859. Affirmed. Collateral estoppel applied to establish liability in the civil case based upon the prior felony conviction because the prior criminal case established all the elements of the civil claims. (Miller v. Superior Court (1985) 168 Cal.App.3d 376, 381–382.)
Attorney-Client Privilege and Work Product: Due Diligence Documents
Uber Technologies, Inc. v. Google, LLC, No. A153653 (1st Dist., 9/28/18)
Google issued a third-party subpoena in arbitration proceedings, demanding that Uber produce documents related to pre-acquisition due diligence conducted by its investigative firm. Google sought the documents to show that its former employee stole trade secrets and used that information to form Ottomotto LLC, a competitor acquired by Uber. Over Uber’s objections, the arbitration panel determined the due diligence documents were not protected by either the attorney client privilege or the attorney work product doctrine and ordered them produced. Uber prevailed on a motion in the superior court to vacate the discovery order. Reversed. Google could appeal the superior court’s order vacating the order to compel. Further, the documents requested were not protected by attorney-client privilege or work product.
Mandatory Relief Under C.C.P. § 473 for Attorney Mistake
Pagnini v. Union Bank, N.A., No. A151390 (1st Dist. 10/17/18)
Effective January 1, 2016, plaintiff can moot a demurrer only by filing an amended complaint no later than the date for filing an opposition to the demurrer. Unaware of this change in law, plaintiff’s counsel tried to file the amended complaint shortly before the hearing on demurrer. The attempt was unsuccessful, and the court sustained the demurrer without leave to amend and entered judgment. Counsel filed a motion for relief under C.C.P. § 473(b). The motion was denied. The Court of Appeal reversed. The mandatory provision provides: “the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any . . . (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (Italics added.) The demurrer was a dismissal motion for purposes of Section 473(b). “Counsel’s mistake in misapprehending the time for filing an amended complaint deprived appellant of an opportunity to respond to the demurrer and resulted in a dismissal that was ‘the functional equivalent of a default for a plaintiff.’”
Posted on October 17, 2018 by Julie Brook, Esq., CEB
[Reprinted by permission.]
Do you know how to keep your client’s fee deposit from emptying out as you earn the fees? Here are two ways to do it.
When the original deposit runs out, make another one. The first way requires the client to make an additional deposit in the amount of the original deposit whenever the balance in the client’s account (s) has been depleted.
Top it up with each bill. The second way, sometimes called an “evergreen” or “replenishing” deposit, calls for the client to “top up” the amount on deposit with the attorney as the balance is expended, as reflected in each billing statement sent by the attorney.
Once you choose which way you want to go, include an appropriate provision in your fee agreement. Here are sample provisions:
[Alternative 1: Additional deposit when original exhausted]
Attorney will notify Client whenever the full amount of any deposit has been applied to _ _[attorney fees/costs/attorney fees and costs]_ _ incurred by Client. Within _ _[number, e.g., 15]_ _ days after each notification is mailed, Client will pay to Attorney an additional deposit in the same amount as the initial deposit to be applied in the same manner. _ _[Deposit of such additional amounts and payment of any interest earned will be made in the same manner as for the initial deposit. Client authorizes Attorney to withdraw the principal from the trust account to pay _ _[attorney fees/costs/attorney fees and costs]_ _ as they are incurred by Client.]_ _ The balance remaining of such additional deposits will also be refundable. If, at the termination of services under this agreement, the total amount incurred by Client for _ _[attorney fees/costs/attorney fees and costs]_ _ is less than the total amount of all deposits, the difference will be refunded to Client.
[Alternative 2: Replenishing deposit]
Attorney will provide Client with a monthly statement of all _ _[attorney fees/costs/attorney fees and costs]_ _ incurred by Client during the applicable billing period. Attorney will apply the deposit to the balance shown on the statement. If _ _[attorney fees/costs/attorney fees and costs]_ _ exceed the amount of the deposit, Client will pay any additional balance due on receipt of Attorney’s monthly statement. Client will also replenish the deposit each month in the amount of all payments made to Attorney from the deposit. At the conclusion of the matter, the deposit will be applied to the final statement. Client will be responsible for any amount due over and above the deposit. If the amount due from Client in the final statement is less than the amount of the deposit, the difference will be refunded to Client.
Note that these provisions wouldn’t be appropriate for use in cases in which the overall fee amount is based on the recovery in the case, such as a contingent fee agreement.
Get a sample billing letter to send to a client requesting that the client replenish retainer fees and many more useful forms and letters in CEB’s California Client Communications Manual: Sample Letters and Forms, chap 3. And get sample fee agreements with expert commentary in CEB’s Fee Agreement Forms Manual.
In the weeks since the November 2018 General Election, Governor Brown has filled the State’s bench with appointments to each level of the California judiciary. On November 14, he appointed Joshua Groban to the California Supreme Court, to fill the seat vacated by Justice Werdegar’s retirement in August 2017. Mr. Groban previously served as a senior advisor to the Governor. Click here for the original article.
Over the following weeks, Governor Brown has made several additional judicial appointments. He appointed Tracie Brown, Gordon B. Burns, and Ioana Petrou to the First District Court of Appeal; Brian S. Currey and John Shepard Wiley to the Second District Court of Appeal; and appointed twelve superior court judges to courts around the state.
Under California Rule of Court Rule 9.9.5, all active attorneys licensed in California must be re-fingerprinted. The State Bar is requiring attorneys to resubmit fingerprints by April 30, 2019. As noted in our previous issue, the cost of the re-fingerprinting falls to the attorney. Fingerprints must be taken by a licensed Live Scan vendor.
Failure to timely resubmit your fingerprints will result in monetary penalties (ranging from $75 to $100), and can lead to the Bar changing your status to involuntary inactive.
More information, including the required forms and a list of licensed vendors, are available at the State Bar website.
Starting this month, section board members Bennett Root and Stephen Duvernay have assumed editorial responsibility for the ePractioner. Ben is based in Pasadena, and his practice focuses on helping business navigate legal issues at all stages from startup to dissolution. Steve is based in Sacramento, where he represents clients in complex civil and constitutional litigation in state and federal courts, political and election law matters, and appeals. Please send any submissions, suggestions, or comments to them at firstname.lastname@example.org and email@example.com.
Solo and Small Firm Section
California Lawyers Association
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San Francisco, CA 94105