In This Issue: 48 th Annual Meeting: Tradition & Change. Justice Bedsworth: Is Laughing More Fun Than Arguing?

Transcription

1 In This Issue: 48 th Annual Meeting: Tradition & Change Justice Bedsworth: Is Laughing More Fun Than Arguing? Discovery Where the Plaintiff s Legal Residency Is an Issue

2 Defense Comment Fall 2007

3 STAFF editor-in-chief Stephen A. Schram Editorial/Art Direction John Berkowitz A. D. C D E F E N S E Melissa Blair Aliotti Martin J. Ambacher Jack G. Angaran Jonathan C. Bacon Mike D. Belote Mark. G. Bonino Michael J. Brady Katherine Gallo Mary Gambino Contributors Peter O. Glaessner Brian Harrison Lonnie Haughton Michael Mordaunt Justin H. Pfrehm Todd A. Roberts Stephen A. Schram James M. Treppa Todd J. Wenzel ADC HEADQUARTERS Office 2520 Venture Oaks Way, Suite 150 Sacramento, CA Phone: (916) Fax: (916) [email protected] ADC HEADQUARTERS Staff Executive Director Jennifer Blevins, CMP [email protected] John Berkowitz Publications Director/Graphic Design [email protected] Joseph Davis Special Projects [email protected] Tricia Glanville, CPA Accountant [email protected] Kim Ingersoll Membership/Education/Advertising [email protected] Melissa Piano Account Executive [email protected] Stephanie Schoen Special Projects [email protected] Rebecca Venard Executive Assistant [email protected] The price of subscription is included in the membership dues. All other subscriptions are $ per year. The opinions and viewpoints expressed in the articles of the Defense Comment Magazine do not necessarily represent the opinions of, or reflect the official position of, the Association of Defense Counsel of Northern California and Nevada or the editors. ASSOCIATION OF DEFENSE COUNSEL OF NORTHERN CALIFORNIA AND NEVADA VOL. 22, NO. 3 / FALL 2007 Features 48 th Annual Meeting 7 Tradition & Change This year s meeting will include varied programs designed to satisfy the educational needs of our diverse membership, without abandoning some of the perennial favorites. Is Laughing More Fun Than Arguing? 14 This year s Keynote Speaker, Justice William W. Bedsworth, will remind us that laughter or for that matter life is more important than arguing or winning an argument. Substantive Law Committee Reports 18 Plus a look at the newly-reformed Insurance Liaison Committee Evaluating Wage Loss Claims 22 Where Plaintiff s Legal Residency May Be an Issue A timely look at non-resident alien discovery issues. Peter O. Glaessner Use and Misuse of Historic Building 28 Codes for Injury Trip and Fall Claims Issues with determining code violations at older buildings during the injury validation review. Lonnie Haughton The 1986 California Discovery Act 31 Analyzing the effectiveness of the discovery process after 20 years under this Act which dramatically changed the practice of law in the civil arena. Katherine Gallo Tip of the Cap Return of the Super Lawyers 36 Departments President s Message By Jonathan C. Bacon 4 California Defense Counsel (CDC) Report By Mike Belote 5 Trials and Tribulations Members Recent Jury Trials 40 Defense Comment would be pleased to consider publishing articles from ADC members and friends. Please send all manuscripts and/or suggestions for article topics to: Stephen A. Schram, Sedgwick, Detert, Moran & Arnold, One Embarcadero Center, 16th Floor, San Francisco, CA. Phone: (415) ; Fax: (415) ; [email protected]. Fall 2007 Defense Comment

4 President s Message Revisiting the Insurance Liaison Committee It s hard to believe that we are well into the fall season and that we are putting the finishing touches on this year s Annual Meeting. With the coming of the Annual Meeting comes the realization that I will soon be completing my term as president of this Association, something I approach with mixed feelings. While I am happy to pass this responsibility to incoming president, Pat Tweedy (and my partners are happy to see me do it!), I will miss the responsibility and the challenge the presidency of this Association presents. I am thankful that I have one more year to enjoy as Immediate Past President and I look forward to assisting Pat, the other officers, and all of the outstanding board members with the tasks ahead. Jonathan C. Bacon 2007 ADC President At last year s Annual Meeting I stated in my speech that among my goals as president was to ensure that civil defense practitioners from all types of civil practice areas were welcome as members of this Association. It is important to our membership numbers, and the recognition we enjoy before the Judicial Council, the legislature, and among other defense counsel associations on a national level, that we encourage strong membership from the insurance defense community (the long-standing foundation of the Association s membership), as well as from the broadest possible range of other civil defense practitioners. It is true that the bulk of our membership devote the majority of their time to insurance defense practice, working with a broad array of insurance carriers with both local and national presence. Many of our members have expressed curiosity, if not concern, over what, to them, appears to be a decrease in recent years in the number of insurance industry representatives who are involved in ADC activities and who attend our seminars and Annual Meetings. When I consider the fact that so many of our members are engaged in insurance-based defense litigation, it has caused me to question why it appears that carrier involvement and participation in our Association has diminished over the years. Through candid discussions of this issue with some of my friends in the insurance industry, I have learned that many of them feel that the ADC has lost some of its relevance to insurance professionals. Coincidentally, past president, Doug Sears, was having similar conversations with some of his carrier clients and through those discussions, Doug raised the idea of resurrecting the Insurance Liaison Committee of the ADC. There had been such a committee of the ADC a number of years ago but it slowly dissolved in the 1990s for a variety of reasons. Although I have been a member of the Board of Directors for seven years, I was unaware that such a committee ever existed. As Doug and I discussed the feedback we were getting from our carrier clients, it seemed to be a no-brainer that this long-dormant committee should be reformed. Doug and I approached a number 4 Defense Comment Fall 2007 Continued on page 44

5 California Defense Counsel (CDC) Report Governor Acts on Key Legislation Michael D. Belote, Esq. California Advocates, Inc. Although some might find the analogy unappealing, the legislative process has been compared to a snake swallowing a squirrel, in the sense that a very large number of bills are introduced at the beginning of the year, and proceed to move slowly through the hearing process. (No cheap jokes will refer to the end product.). As this column is written, the California Legislature has consumed more than 3000 newly introduced bills for 2007, sending some 962 to the Governor for signature or veto. The state constitution provides 30 days to complete this unenviable task, or bills become law automatically without the Governor s signature. The arithmetically inclined might assume that if only 962 of more than 3000 bills were passed by the Legislature, more than 2000 must have died. The answer is not so simple. California s legislature operates on two-year sessions, and we are presently in the first year of the session. In the second year of the session, all bills which are not passed die when the legislature adjourns. But in the first year, some of the bills not enacted this year will carry over for possible enactment in Except for issues important to the citizenry generally, for ADC all of this civics discussion is only relevant to the extent that the bills relate to defense practice. Of the bills signed by the Governor thus far, probably the most relevant is AB 500 (Lieu) relating to telephonic appearances. This bill, effective on January 1, 2008, adds new Code of Civil Procedure Section 367.5, and repeals a series of obsolete and conflicting sections. The bill is intended to work together with changes to be adopted in statewide Rules of Court. The concepts incorporated in AB 500 were developed in a Judicial Council working group, made up of judges, court administrators, and representatives of CDC and the Consumer Attorneys. The intent is to establish reasonably uniform rules for telephonic appearances, but to retain judicial discretion to require personal appearances in appropriate, individual matters. The biggest change is to make case management conferences presumptively eligible for telephonic appearances, instead of presumptively ineligible, but only if the party has made a good faith effort to comply with existing meet and confer obligations, and has timely filed and served case management statements. Other matters specifically mentioned in the statute as eligible for telephonic appearances include trial setting conferences, law and motion matters other than motions in limine, discovery motions, and others. AB 500 was an excellent example of the various stakeholders in the judicial process working together collaboratively for a consensus product. The Governor s signature on the bill was therefore no surprise. Much less certain was the Governor s action on Continued on page 45 Fall 2007 Defense Comment 5

6 Tradition & Chan 6 Defense Comment Fall 2007

7 48 th Annual Meeting ge We are planning an entertaining and useful meeting for all of the members of the ADCNCN. This year s meeting will include a number of varied programs designed to satisfy the differing educational needs of our large and diverse membership, without abandoning some of the perennial favorite programs that cut across the boundaries of practice area and specialization. This year, as every year, the Annual Meeting also affords the best opportunity for the members to renew acquaintances with friends and colleagues, and even with some of our adversaries who have generously agreed to speak to the membership on many of the individual programs in order to provide a different and enlightening perspective. Beginning on December 13, 2007 a week later than usual- the setting is the grand St. Francis Hotel on Union Square at the epicenter of San Francisco shopping and dining. The holiday season and its decorations will be in full swing providing numerous opportunities for shopping, dining, or just plain sightseeing for the members and their families and guests to enjoy. There is no better time of year to be on Union Square in San Francisco. And of course, as we do every year, the Thursday evening President s Reception provides the single best opportunity to see everyone who is attending the Annual Meeting. At Friday s Grand Luncheon Justice William Bedsworth, our featured speaker, will give what promises to be a memorable talk. Both for those in this year s compliance group and for those of us who are just in need of or collecting continuing education credits, this year s programs will provide 8.75 units. Included will be the full Continued on page Fall 2007 Defense Comment 7

8 48 th Annual Meeting continued from page 7 six required units of specialized credit including the required hour of substance abuse, the required hour of bias and the required four hours of ethics credit. One of the new programs this year will be headlined by Justice Edward Panelli, who together with renowned plaintiffs counsel, Michael Bidart, and defense counsel, Jim Wagoner, will discuss emerging trends in California law on insurance, bad faith and punitive damages. This topic could rightfully be called: A view of California law from 36,000 feet, since it will be an attempt to map the future direction of California law, given the recent decisions in each of these areas. Jim Wagoner, from Fresno, describes the approach to the program topics as: A literal, focused reading of insurance policy provisions, or a top of the trees perspective on coverage? Expansion of the duty to defend coupled with more hammers for recalcitrant insurers or a relaxation of the defense duty coupled with a right to investigate? The emergence of the genuine dispute doctrine in contrast to bad faith is a matter of law under Delgado? Constitutional restrictions on punitive damages, jury instructions and awards? Where are we headed? One of the traditional favorite programs will be the annual cavalcade of new cases presented by Mike Brady, Jakki Wilson and Jack Angaran. Mike Brady of Redwood City, who has done this program for more than 30 years, says: New cases saying that in progressive continuing loss only the carrier on the risk when the loss starts pays others are off the hook! Ways to get your attorney s fees when you win UM arbitration cases. Insurer not obligated to pay attorney s fees awarded against a policyholder as costs. How a settling insurer can get a presumption in its favor when it sues a non-settling insurer. Plaintiffs attorneys get Brandt fees on appeal. Discoverability of reserves and reinsurance. Good news for insurers 8 Defense Comment Fall 2007 on punitive damages. Bad news for insurers on punitive damages. These cases and more were decided this last year by the California courts. A topic overlooked in previous seminars growing out of a new and increasingly active area in which the Association has just created a committee is the area of landlord liability. Laura Flynn from San Francisco has put together a large panel of experts to discuss how to resolve those troublesome cases. Laura describes the program: How can you settle a breach of warranty of habitability claim and what strategy should be employed? Advice and opinions will be provided by plaintiffs counsel, defense counsel, an insurance representative and Judge David Garcia, who literally wrote the book on landlord/tenant law. What dangers are there in not settling, even nominal cases, based on the attorney s fees and treble damage issues? Do early 998 offers provide a source of relief? This discussion will provide practice tips that will assist in the defense of any case where attorney s fees are in play. Two areas in which our members have historically been very active, but which have not received much attention at the recent meetings, are medical malpractice and landowner liability. This year, you will have a program in each area. Mike Mordaunt from Stockton, who organized the medical malpractice panel, describes it this way: I am sitting at my desk when a new file arrives referring me the defense of a local physician. At first reading, it is a usual case, but a look at the complaint reveals that the plaintiff is alleging elder abuse and seeking enhanced remedies and punitive damages. How to defend this case is changed by those allegations and the types of motions, discovery and experts are all altered. This panel will help and guide the practitioner through these kinds of cases and back toward the familiar and calm waters of MICRA. Continued on page

9 48 th Annual Meeting continued from page Mike Burke of San Francisco will moderate the worker injury panel that will try to solve the riddle that is the Privette decision: Despite six Supreme Court cases since Privette, significant ambiguity remain in the law. These have been exacerbated by the 1999 changes to the admissibility of OSHA regulations in civil cases. Further, despite attempts at clarification, the issue of retained control nearly always finds its way into the trial. This panel will shed some light on these complex issues with an open discussion by attorneys from both sides of the bar. One of our ethics panels will be headlined by Pamela Phillips and Michael Bradley, both of whom specialize in the area of conflicts and ethical problems that arise in the practice of law. Pam and Mike will focus on direct conflicts and the recent flood of cases from the Court of Appeal on this subject. Another traditional area that is the focus of one of the panels this year is Sports Torts. Despite the decisions of the courts relating to the doctrine of assumption of the risk, these remain dangerous cases. Chris Beeman from Pleasanton, Rich Schoenberger of the Walkup office in San Francisco, and Mike Ney from Walnut Creek will be on a panel. Chris describes his group as follows: The Wide World of Sports brought us the thrill of victory and the agony of defeat. Jury trials bring the same adrenalin rush. Join a panel of hasbeen and wannabe athletes to review the wide range of litigation surrounding participation in all sorts of athletic endeavors. In addition to analyzing the existing state of the law on assumption of the risk as it applies to sports and recreational activities, the panel will discuss waivers, immunities and litigious parents. Two areas of new problems that have not yet even been defined by the courts of appeal involve black boxes in motor vehicles and the representation of dissolved corporations. Brian Powers from Sacramento and black box expert, Rusty Haight, will discuss the legal implications of attempting to use evidence from these devices in litigation. Brian says: The devices were first put in motor vehicles on a test basis during the 1970s to collect data. In the 1990s, manufacturers began installing the event data recorders as part of the airbag system. An incredible amount of pre-crash and post-crash information is stored and can be downloaded. Most consumers are unaware of the presence of a device recording their conduct. California has passed a law requiring disclosure. Whether you re interested in the use of these devices in your cases, or frightened of government intrusion, or just a parent who wants to check on your children, you will enjoy this discussion. Past-president Ric Blumhardt and board member Chris Wood, and Jim Sinunu will discuss the ethical and legal problems involved in representing corporations that are suspended, dissolved or have declared bankruptcy. Chris Wood describes the program as follows: What to do, what to do? You re defending your client corporation when it declares bankruptcy, or dissolves, or is suddenly suspended. Do you litigate as usual or has the field of litigation been rearranged? Is your representation terminated or are you stuck inside of Mobile with the Memphis Blues again and can t find your toes? It looks like the beginning of the end for your client, but surprisingly, you re only at the beginning. Tort liability may survive. Strict liability may live on. Insurance coverage is a wild card. This presentation will provide the how-to defend a suspended, dissolved or bankrupt corporation. Finally, as part of the ethics credit, longtime member, Jon York, will be joined by Bob Arns to present what is widely anticipated to be an entertaining program on professionalism during trial. As his partner, Margie Allen, the moderator of the panel, explains: The trial of a lawsuit includes the juggling of many complex issues. One issue that should get more attention but is sometimes lost in the heat of battle is professionalism. Two experienced trial lawyers will address successfully trying cases within the parameters of maintaining professionalism, collegiality and courtesy with their opponents. In addition, we will have Judge Nichols from Santa Clara County moderating a panel on pros and cons of attempting to use expert testimony in certain casualty cases. Melissa Aliotti from Sacramento will be joined by George Yaron and Jed Riddle to discuss the new insurance programs and policy language and the effect it is having on the settlement of construction defect claims. There will be a program on law firm bias and how the emerging family leave acts effect that, and a number of other interesting topics. We look forward to seeing at the 48 th Annual Meeting. We know you will find it enjoyable and educational. Fall 2007 Defense Comment 9

10 Registration Fees: Regular On-Site ADC Members $545 $570 Claims Personnel $370 $395 Non-Member Attorneys $795 $835 Young Lawyer (ADC member, in practice up to five years) $385 $420 Reception Companion Ticket $150 $150 Luncheon Companion Ticket $125 $125 Name/State Bar ID: Companion s Name for Reception/Luncheon: Company/Firm: Address: City/State/Zip: Phone: Fax: Luncheon Table Reservation: Please reserve table(s). (You must register 10 people to reserve a table.) Payment Information: Enclosed is my check for $ Please charge $ to my MasterCard Visa Card Number: Expiration Date: Signature: Registration Form 48 th Annual Meeting December Schedule of Events Thursday, December 13, :30 am 3:15 pm Registration Open Italian Room 7:30 am 3:15 pm Vendor Faire Open Colonial Room 7:30 am 8:45 am Continental Breakfast Vendor Faire Area Colonial Room 8:15 am 8:30 am Welcome and Annual Business Meeting Grand Ballroom A welcome to the Annual Meeting by our president, Jon Bacon, followed by the election of the 2008 ADCNCN Officers and Board of Directors. First Morning Session 8:30 am 9:30 am Track A: 2007 The Year In Review (One hour General MCLE credit) Grand Ballroom Our expert panelists, Mike Brady, Jakki Wilson, and Jack Angaran, review the major cases decided during 2007 tracking the changes and trends in California and Nevada law. A perennial favorite and most useful program. Jack Angaran Georgeson, Thompson & Angaran Michael J. Brady Ropers, Majeski, Kohn & Bentley First Morning Session Jacquelyn K. Wilson Samuelson Wilson & Roe 8:30 am 9:30 am Track B: Substance Abuse in the Legal Profession (One hour Substance Abuse MCLE credit) California East Bob Resner, has for the last eight years, served as the statewide coordinator and San Francisco representative for the Other Bar, a non-profit organization that helps attorneys and judges deal with the problems of alcohol and substance abuse. He explains the nature of addiction, the help that is available, and tells the compelling story of one lawyer s journey to recovery. Robert Resner The Law Offices of Robert Resner 9:30 am 9:45 am Break Name as Appears on Card: Credit Card Billing Address: City/State/Zip: Make checks ADC payable and 2520 Venture Oaks Way, Suite 150 mail to: Sacramento, CA (916) Fax: (916) Defense Comment Fall 2007

11 Schedule of Events Thursday, December 13, 2007 Second Morning Session 9:45 am 10:45 am Track A: Montrose Forms, Allegations of Discovery, WRAPS, OCIPS and Construction Liability Decoding the New World of Construction Insurance (One hour General MCLE credit) Grand Ballroom Hear from highly-regarded defense and coverage counsel as these three experts in construction defect litigation unravel and explain the new insurance programs, limitations on coverage, pleading anomalies and their impact on construction defect litigation and settlement. Melissa B. Aliotti Read & Aliotti 10:45 am 11:00 am Vendor Break Colonial Room George D. Yaron, Jr. Yaron & Associates Second Morning Session Second Morning Session John E. (Jed) Riddle Lamore, Brazier, Riddle & Giampaoli 9:45 am 10:45 am Track B: Liens Liability and Leverage (One hour General MCLE credit) California East David Rosenbaum reprises his excellent program on medical liens and the opportunities and problems that arise from them. Understanding these issues is essential to defending personal injury claims. David Rosenbaum McDowall & Cotter 9:45 am 10:45 am Track C: Leave of Absence Law and Law Firm Bias (One hour Bias MCLE credit) California West Four employment lawyers discuss the alphabet soup of laws including the Family Medical Leave Act, the California Family Rights Act, and Pregnancy Leave and how they affect the way your law firm deals with its employees. They explain how these laws interact with the Americans with Disabilities Act and the Fair Employment and Housing Act, and help to unravel your obligations. Todd A. Roberts Ropers, Majeski, Kohn & Bentley Erica Kelley Littler Mendelson THIRD Morning Session Tammy Wood Maire & Beasley 11:00 am 12:00 noon Track A: Sports Torts Liability and Assumption of the Risk (One hour General MCLE credit) Grand Ballroom Greg Simonian Clapp Moroney, Bellagamba & Vucinich Chris Beeman and Mike Ney will be joined by Walkup partner, Rich Schoenberger, to discuss liability for injuries suffered by participants in a variety of athletic activity, defenses such as assumption of the risk, and the risks of taking these cases to trial, including commentary on the jurors reactions to the injuries and circumstances. Chris Beeman Clapp, Moroney, Bellagamba & Vucinich Michael J. Ney McNamara Dodge Ney Beatty, et al. Richard H. Schoenberger Walkup Melodia, Kelly, Wecht & Schoenberger THIRD Morning Session 11:00 am 12:00 noon Track B: Keeping Elder Abuse Out of Your Medical Malpractice Case (One hour General MCLE credit) California East Three experienced trial lawyers explain strategies for keeping a medical malpractice case within the boundaries of MICRA law and procedure and the dangers presented by expanding the claim to include elder abuse causes of action. Scott Gassaway Wilke Fleury Hoffelt, et al. H. Patrick Canvel Gordon & Rees THIRD Morning Session Thomas J. Doyle Scheuring, Zimmerman, Scully, Tweedy & Doyle 11:00 am 12:00 noon Track C: Conflicts of Interest Who is Your Client? (One hour Ethics MCLE credit) California West Two renowned lawyers, Pam Phillips and Mike Bradley, discuss conflicts of interest and the duties of the lawyer who is contacted for representation. They will walk you through California s numerous conflicts rules and explain what the rules require, when to decline representation, what to do when you accept, and when you must remain silent about the request itself. Pamela Phillips Howard Rice Nemerovski, et al. 12:00 noon 1:45 pm Lunch on your own Michael S. Burke Vogl & Meredith Michael Bradley Murphy Pearson, Bradley & Feeney First Afternoon Session 1:45 pm 2:45 pm Track A: Privette, Toland & Beyond: Perspectives from Both Sides of the Bar (One hour general MCLE credit) Grand Ballroom Mike Burke will explain the defense side and Morgan Smith will explain the plaintiffs side. Tad Shapiro will referee this free-flowing discussion regarding the recent cases and practical trial problems inherent in worker injury cases. Morgan C. Smith The Arns Law Firm First Afternoon Session Tad Shapiro Shapiro, Galvin, Shapiro, Piasta, et al. 1:45 pm 2:45 pm Track B: Experts Where is the Boundary Line? (One hour general MCLE credit) California East Judge Leslie Nichols will moderate as three experienced trial lawyers discuss the pros and cons of expert testimony and strategies for maximizing the value of that testimony with the focus on human factors experts and scope of the testimony that may be admissible. Honorable Leslie Nichols Santa Clara Superior Court William Gavin Gavin & Cunningham Wilma J. Gray McNamara, Dodge Roger F. Allen Ericksen, Arbuthnot, et al. Fall 2007 Defense Comment 11

12 Schedule of Events Thursday, December 13, 2007 First Afternoon Session 1:45 pm 2:45 pm Track C: Trial Tactics and Ethics (One hour Ethics MCLE credit) California West A trial requires juggling complex issues. One such issue that is sometimes lost in the shuffle is professionalism. Margie Allen moderates a discussion between two experienced trial lawyers from the opposite sides of the bar regarding successfully trying cases without losing sight of either professionalism or collegiality. Jon H. York York, Hanawalt & Brock 2:45 pm 3:00 pm Final Vendor Break Robert S. Arns The Arns Law Firm Second Afternoon Session Margaret Allen York, Hanawalt & Brock 3:00 pm 4:00 pm Track A: Mediating and Settling Tenant Habitability Claims (One hour general MCLE credit) California West Recognized expert and Rutter Group author, Retired Judge David Garcia, Raquel Fox, a tenants rights attorney and Todd Wenzel a defense attorney, together with Joyce Spies, a claims representative, discuss strategies and tactics that have helped settle landlord liability disputes before the litigation costs take over the case. Moderated by Laura Flynn. Honorable David Garcia, Judge, Ret Joyce Spies Colony Insurance Todd Wenzel Ropers, Majeski, Kohn & Bentley Laura Flynn Low, Ball & Lynch Second Afternoon Session Raquel Fox The Tenderloin Housing Clinic 3:00 pm 4:00 pm Track B: Vehicle Event Data Recorders Investigative Tool, Safety Feature or Spy (One-half hour Ethics MCLE credit and one-half hour general MCLE credit) California East Expert Rusty Haight, the black box guru, and defense lawyer Brian Powers, explain the uses and abuses of the event data recorders and the limits of the information available and limits on the collection of the information, including ethical questions relating to privacy and safety issues. J. Brian Powers Powers & Miller W.R. Rusty Haight Collision Safety Institute Third Afternoon Session 4:15 pm 5:15 pm Track A: The View from the Pinnacle Trends in California Insurance, Bad Faith and Punitive Damage Law (One hour general MCLE credit) California West Retired Supreme Court Justice Edward Panelli, top plaintiffs trial lawyer Mike Bidart, and top defense lawyer Jim Wagoner, discuss the recent trends and anticipated future direction of California law in these important and highly dangerous areas of litigation. Honorable Edward A. Panelli California Supreme Court (Ret.),. and JAMS. Third Afternoon Session 4:15 pm 5:15 pm Track B: Keeping the Wolves at Bay Representing the Suspended, Dissolved or Bankrupt, Dissolved Corporations (One-half hour Ethics MCLE credit and one-half hour of general MCLE credit) California East What to do? You are defending your client corporation when it declares bankruptcy, or dissolves or is suddenly suspended Do you litigate as usual, or has the field of litigation been rearranged? Is your representation terminated, or are you stuck inside a mobile with the Memphis Blues again and can t find your toes? If it looks like the beginning of the end for your client, surprisingly you are at the beginning. Tort liabilities may survive. Strict product liabilities may live on like a toxic groundwater plume. Insurance coverage is a wildcard. This presentation will provide the how-to defend a suspended, dissolved or bankrupt corporation. It will cover the rules of representation, case law, the CA Corporation Code; successor liability issues and who insures what for when. W. Ric Blumhardt Archer Norris Michael J. Bidart Shernoff Bidart & Darras Christopher W. Wood McKenna Long & Aldridge 6:00 pm 8:00 pm President s Reception Grand Ballroom James P. Wagoner McCormick Barstow James Sinunu Adams, Nye, Sinunu Our traditional celebration is one of the highlights of the ADCNCN Annual Meeting and for the Holiday Season. This, along with Friday s luncheon, are the two events not to be missed. 12 Defense Comment Fall 2007

13 Schedule of Events Friday, December 14, :30 am 12:00 noon Registration Open Italian Room 7:30 am 9:00 am Continental Breakfast Italian Room 8:00 am 8:30 am Substantive Law Committee Meetings Construction Yorkshire Employment Boardroom Insurance Cambridge Landowner Liability Victorian Medical, Health Care and Malpractice Hampton Public Entity Kent Toxic Torts Essex Transportation Bristol First Morning Session 8:45 am 10:00 am Legislative Update (One and one-quarter hours general MCLE credit) Colonial Room Mike Belote, California Defense Counsel Legislative Advocate, will present a review of the 2007 legislation and those matters pending for consideration during the 2008 session. Be sure to join us for this always interesting tour through the year s legislation. Michael D. Belote California Advocates and CDC Legislative Advocate 10:00 am 10:15 am Break Italian Room Second Morning Session 10:15 am 10:45 am Electronic Discovery What is on California s Horizon? (One-half hour general MCLE credit) Colonial Room Past-President Peter Glaessner, who has been carefully tracking the electronic discovery issues, explains the matters under consideration both by the Legislature and by the Judicial Council. These rules will be here before we know it. Do not miss this preview of what they may entail. Peter O. Glaessner Lombardi Loper & Conant Third Morning Session 11:00 am 12:00 noon What I Learned at the Circus and How It Will Help Me in My Next Trial (One hour of Ethics MCLE credit) Colonial Room Celebrity trials have become part of every day American life. Whether it is the mysterious death of Anna Nicole Smith, a murder at Phil Specter s home, or a U.S. Senator caught in a rest room. These trials occupy the attention of the entire country. What ethical considerations are involved in handling high exposure litigation? Our panel of experts will explain. Daniel F. Quinn Quinn & Kronlund 12:15 pm Annual Meeting Luncheon Keynote Speaker: William Bedsworth, Justice of the California Court of Appeal, Fourth Appellate District Grand Ballroom Bill Bedsworth is a native Californian with roots in both Southern California (undergraduate degree at Loyola University) and Northern California (law degree at Boalt). After graduation from law school, he joined the Orange County District Attorney s Office, where he served as a felony trial deputy and ultimately as the managing attorney in charge of the appellate division of that office. He has argued cases before the Court of Appeal and before the California Supreme Court. In addition to his law-related activities, Bill Bedsworth has published a great deal in the field of legal humor. His monthly humor column, A Criminal Waste of Space, is nationally syndicated. As both an author and humorist, he has spoken to such diverse groups as the American College of Trial Advocates, the Nebraska State Bar, and the California Association of Hostage Negotiators. Not content with these activities, Justice Bedsworth also works for the National Hockey League as the goal judge for the Mighty Ducks games. We are fortunate to have Justice Bedsworth to speak to us for the luncheon. His speech focuses, not on the law, but on the rest and more important part of our lives. MCLE Credit Information This annual meeting has been approved for Minimum Continuing Legal Education credit by the State Bar of California and Nevada. The total available credit is 8.75, including specialty credits sufficient to satisfy the California triennial Specialty Credit Requirement (4.0 hours Ethics, 1.0 hour Bias and 1.0 hours Substance Abuse). Be sure to sign in for your MCLE credit in the Italian Room across from the Registration Desk. Fall 2007 Defense Comment 13

14 IS LAUGHING MORE FUN THAN ARGUING? Those outside our profession may believe that lawyers would rather argue than laugh. Most attorneys know better. However, sometimes even lawyers need to be reminded that laughter or for that matter, life outside the law is more important than arguing or winning an argument. This year s speaker at the 2007 Annual Meeting does know that there are more important aspects to life than lawyering. And, he will share his insights and priorities with us in a presentation that he has entitled Stop And Eat The Roses. Sounds serious with perhaps a soporific quality. Not when the speaker is Justice William W. Beds Bedsworth, California Fourth District Court of Appeal, who another out-of-state appellate justice has called the Dave Barry of the judiciary. Many ADC members know Justice Bedsworth as the author of a monthly column appearing in legal and lay press entitled A Criminal Waste of Space. While the California Newspaper Publishers Association twice has honored Justice Bedsworth for his writing with an annual award in its Commentary and 14 Defense Comment Fall 2007 Criticism category, his writing started and continues with large doses of humor. About 25 years ago, while working as a prosecutor (in Orange County), I was sitting in a calendar call when a defense attorney started talking about oral transverse of the search warrant, recalls Justice Bedsworth, describing how he remembers the genesis of his column. So, I turned to the prosecutor sitting next to me and asked him if the defense counsel was talking about an Oklahoma preacher. No, it s something the dentist charges you $500 for, his fellow prosecutor responded. Later that same night, Justice Bedsworth (call me Beds ) sat down and wrote an article entitled Criminal Law Specialist And Screen Door Repairman Test that consisted of 25 multi-choice questions. He sent the article to the state bar journal. Months passed. He heard nothing about his unsolicited submission. Then, the journal editor contacted Beds and told him that the journal liked the article very much, but the editor just was not sure if a humorous article should be published by the state bar. It was. The one time submission turned into an avocation. Five years later, or about 20 years ago, Beds started writing the monthly column. It s more humor than commentary or criticism, but sometimes I do comment or criticize, Beds said. Like the humorist with whom he is compared, Beds assembled 30 or so of his best columns into a book titled A Criminal Waste of Time. Those regular readers of Beds columns know that the real pearls of humor are not within the main text, but in the footnotes. One regular reader said the footnotes are the best part of Beds columns. Beds, himself, says that the footnotes resulted because he is incapable of linear thought, and has an aversion to multiple re-writes. Sometimes, I d think of something funny after writing the article, and I don t want to re-write or devote a whole paragraph to developing the thought, so I ll drop-in a foot note. So, can we expect to roll in the aisles with laughter at the St. Francis hotel in December when Justice Bedsworth speaks? Please, don t tell your members Continued on page 15

15 Justice William Bedsworth continued from page 14 that I m funny because when I stand to speak, they ll be sitting in their seats with their arms folded, staring and daring me to make them laugh, our Annual Meeting speaker said. The subject of his speech is serious in that Justice Bedsworth intends to reflect on why life outside the law is important. It is a subject that he began to consider as he reached his early 50s. About six years ago, he coalesced his ruminations into a speech that he presented to an ABA gathering. The reception to his speech was so enthusiastic, that he has been invited many, many times to present it all over the U.S. and, in two weeks, in London. It s about balancing your life and work, said Beds. As to his life outside his work, Beds is known for his fondness for Country music and dress, and hockey. My mother used to tell me you re from southern California, not El Paso, so why are you wearing jeans and boots, Beds said. But I got a lot of relatives in the southwest and southern United States who influenced me. When I became a judge, I finally could wear cowboy boots to my office, which I would not allow myself to do as a prosecutor, Beds said. And hockey? He is such a fan, that for almost 13 years, Beds was the full-time goal judge for the Mighty Ducks National Hockey League team that plays in Orange County. For those of us who are not students of the icy sport, the goal judge traditionally sat in a glass booth right behind the goal net at one end of the rink. When one team or another scored a goal by flicking the puck into the net, the goal judge would turn-on a red light to signal a point scored. Those fans right around the goal might see the goal, but thousands of other fans looked for the red light to confirm the score, explained Beds. These days, the goal judge has become, as one Canadian sports commentator wrote, the most useless, irrelevant position in sports. It s the most useless, irrelevant position in the universe, said Beds, laughing. With a television camera placed above goal nets, instant video replay available to referees skating the ice and Justice William W. Bedsworth (center) not only decides appellate issues in the Fourth District Court of Appeals, but sits as a judge for NHL hockey games. Here, at the recent pre-season game of the Anaheim Mighty Ducks, Justice Bedsworth acts as the penalty box judge. Not doubt Justice Bedsworth is wearing cowboy boots with his suit just as he will be when he speaks at this year s Annual Meeting. television broadcasting virtually every game, the goal judge s job has become less and less important. Now the goal judge in Anaheim, where the Ducks play, does not sit right behind the goal, but at the back of the first level of seats well above and away from the net. Nonetheless, Beds continues to act part-time as a hockey official, including an upcoming stint where Beds will be a penalty box official for the Ducks opening match in London, presumably after he finishes giving his Stop And Eat The Roses speech at an ABA gathering. It was his interest in balancing his life outside and inside the law that lead Beds to cut-back on deciding ice rink issues. He calculated that each year he spent 225 hours per year, or more than a full month, watching pucks fly into nets. It s a great hobby, but I wanted to start doing more writing and perhaps playing a little more golf. As to his life within the law, Beds calls his work an amazingly good job. Huh? On a Monday morning, when the Justice stopped working to describe the topic of his address to the ADC Annual Meeting, he faced a week where he would sit and listen to oral arguments on 22 cases. He spent his weekend reading briefs. I have the time to do the job right, said Justice Bedsworth. He has up to 90 days to study the issues presented and decide a case. More importantly, California appellate justices, including Justice Bedsworth, enjoy a rare benefit. California hires career appellate attorneys to assist the appellate justices. Most appellate attorneys love the law, but for various reasons do not want to work in private practice after experiencing it. The attorneys assisting the justices research issues in pending cases and prepare memoranda of the law. More importantly, remarked Justice Bedsworth, the attorneys have a variety of legal backgrounds so that he can discuss potential practical consequences of deciding a case. They help me avoid the Doctrine of Unintended Consequences, the Justice said. It s a job that the Justice suspects that, if he was not careful, he would keep until he was too old to focus on the words on paper. But, Beds is careful about balancing his enthusiasms for his amazingly good job with his interests outside the law. Something that we should learn about, and laugh about, at this year s Annual Meeting. Fall 2007 Defense Comment 15

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18 Recently, President Jonathan Bacon and Past President Doug Sears convened the inaugural meeting of the newly formed ADCNCN Insurance Liaison Committee with five insurance carrier representatives, who work in Northern California. The purpose of this Committee is to reach-out to insurance carriers and to re-establish our valued relationship with them, Mr. Bacon said at the meeting (and elsewhere in this publication). Even at the first meeting, it became clear that there was more than socializing on the minds of the attendees. Very soon, attorneys and carriers began a lengthy discussion on the issue of whether the amount of a personal injury plaintiff s verdict should include the amount of medical expenses billed or paid. (See, Hanif/Nishihama Reductions After Greer v. Buzgheia article by Gregory D. Pike and Ryan Vlasak, Defense Comment magazine, Summer 2007 ed.) This discussion lead to the subjects of what, if anything the ADC could do to prevent crafty plaintiffs attorneys from circumventing Hanif/Nishihama reductions, and the ADC s lobbying efforts through the California Defense Counsel (which is the political arm jointly operated by the Association of Defense Counsel of Northern California and Nevada and the Association of Southern California Defense Counsel) on legislation to support the common law. Several insurance representatives at the Committee meeting emphasized that this subject was an example of the type of information useful to them in their business of both underwriting insurance and adjusting claims; that is, what are the trends in the law impacting insurance. It is defense counsel who are aware of these trends both from their practice and involvement in ADC functions and lobbying activities. Other subjects that would benefit the insurance industry also were discussed at the inaugural meeting. The attendees discussed the possibility of a seminar where less experienced attorneys could learn from insurance industry professionals about the business of insurance, reporting guidelines and billing do s and don t s. There was a suggestion to conduct a round table discussion by plaintiffs attorneys, defense counsel, judges, special masters and claims representatives on issues surrounding the use of special masters for discovery and mediation. Co-Chairs Sears and Bacon intend to convene the Insurance Liaison Committee four times a year with the next meeting during January All ADC members are invited to suggest topics for discussion at committee meetings or subjects for seminars attended by both defense counsel and insurance representatives. You may contact Mr. Sears ([email protected]) or Mr. Bacon ([email protected]) with your ideas and suggestions. Those attending the inaugural meeting were: Vicki Campbell, NAIC; Deveney Totten, St. Paul Travelers; Margie Lariviere, CSAA; Lola Hogan, Sequoia Insurance; Patrick Fuller, AIG; and ADC members Jon Bacon, Doug Sears, Pat Beasley, Mark Bonino, Stephen Schram and Pat Beasley. Oakland / San Francisco Bay Area Specializing in Deposition Reporting Complimentary Condensed Transcripts and Disks 30 Reporters Realtime Reporters 15 Conference Rooms Copy Facility Free Wireless Internet Out-of-Town Arrangements Document Depository On-line scheduling / transcript requests ONE KAISER PLAZA, SUITE 505 OAKLAND, CA (510) Defense Comment Fall 2007

19 Construction Melissa Aliotti, Chair David Daniels, Vice- Chair David Daniels, co-chair of the Construction Law Committee, is chairing ADC s Basic Training series, the ever-popular 8-week program currently underway in Sacramento this year. This series was created for the purpose of providing our young lawyers with a solid and consistent foundation from which to build strategies for defense of the broad variety of lawsuits facing our clients. Meanwhile, planning is underway for the Construction Law program at the Annual Meeting, to be held at the Westin St. Francis again this year, December You may have missed the early bird special, but there is still plenty of time to register for this not-to-be-missed meeting. The construction panel will address coverage issues in construction litigation in Nevada and California, with an emphasis on the myriad ways OCIP s and CCIP s (wrap policies) affect our developer, contractor, and subcontractor clients. Also - don t miss the subcommittee meeting to convene during the annual meeting. Help us plan 2008 s full-day program, to be held in California this time. See you in December! Melissa Blair Aliotti, Chair, Construction Law Committee. Employment Todd Roberts, Chair Erica Kelley, Vice-Chair Earlier this year, Todd Roberts, Chair of the Employment Substantive Law Committee, wrote a letter brief to the California Supreme Court on behalf of the ADC urging the court to review the Fourth District Court of Appeal s decision in Jones v. The Lodge at Torrey Pines, which held, among other things, that a supervisor may be held personally liable for acts of retaliation prohibited by the Fair Employment and Housing Act. On June 13, 2007, the Supreme Court granted review. The ADC will seek leave of court to file an amicus brief on behalf of the employer, Respondent The Lodge at Torrey Pines. The Committee also will be presenting a program at the ADC Annual Meeting on leaves of absence, the elimination of bias in the workplace, and the interrelationship of State and Federal laws in these areas. Interested in becoming involved in the ADC? We are actively seeking authors to write articles to be published in Defense Comment magazine. Additionally, the Committee will be presenting a half-day program in the first quarter of 2008 on a variety of topics. Please contact Todd Roberts at [email protected] if you have an interest in writing an article or being part of the Committee programs. Insurance Lawrence Guslani, Chair Brian Harrison, Vice-Chair The Insurance Substantive Law Committee presented a Seminar on September 21, 2007 regarding Update on Recent Case Law in the Area of Insurance Coverage. On the panel were Lawrence M. Guslani of Hayes, Davis, Bonino, Ellingson McLay & Scott, LLP, Brian Harrison of Sedgwick, Detert, Moran & Arnold LLP and Lisa Pan of the Law Office of William J. Diffenderfer. Any suggestions or topics for additional CLE programs or brown bag lunch seminars are welcome. Please send your suggestions to Lawrence Guslani ([email protected]) or Brian Harrison ([email protected]). Landowner Liabaility Todd Wenzel, Chair Laura Flynn, Vice-Chair The Landowner Liability Substantive Law Committee presented a half day seminar at the St. Francis Hotel in San Francisco on June 29, 2007 on Litigating Residential Landlord Tenant Disputes. The seminar panelists were three experienced landlord-tenant practitioners, Mr. Jeffery Woo, Mr. Andrew Klimenko, and Mr. Kurt Bridgman. The well attended audience learned some valuable litigation tips in this active litigation area. The Landowner Liability Sub-Committee is teaming up with the Toxic Tort subcommittee in presenting a brown bag seminar on Mold Lawsuits, with an industrial hygienist speaker and medical allergist speaker. This jointly promoted seminar will take place on October 30, 2007 in Oakland. Check the ADC Web site for all meeting announcements; www. adcnc.org.. To complete the Landowner Liability Sub-Com m it tee s f i rst yea r, t he committee will be presenting former San Francisco Superior Court judge, The Honorable David Garcia, to discuss Settling Habitability Claims in Landlord Tenant Disputes on December 13, 2007, during this year s Annual Meeting. This event will conclude a successful first year of this sub-committee. Medical Health care and Malpractice Michael Mordaunt, Chair Dominique Pollara, Vice-Chair The Medical Malpractice and the Healthcare Subcommittee will be putting on a one-hour seminar at the annual meeting in San Francisco. The seminar will deal with how to keep Elder Abuse out of your Medical Malpractice case, a problem commonly faced by malpractice defense attorneys. We have an excellent panel of experienced defense counsel to discuss this issue, including Rick Cancel of Gordon & Rees, Tom Doyle of Schering Zimmerman Scully Tweedy & Doyle, LLP and Scott Gassaway of Wilke, Fleury, Hoffelt, Gould Continued on page 20 Fall 2007 Defense Comment 19

20 Substative Law Committees continued from page 19 & Barney LLP. The panel will provide insight on defeating elder abuse claims from the initial appearance through trial. It promises to be an interesting presentation on a problem experienced on a regular basis by defense attorneys. The subcommittee will also hold a meeting at the time of the annual meeting. The Subcommittee will meet on December 14, 2007 at 8:00 a.m. at the St. Francis Hotel. Please plan on attending the annual meeting and contributing your suggestions on how to make this a better committee. If you have additional suggestions, please feel free to contact Mike (mmordaunt@ riggiolaw.com) or Dominique (dap@szs. com) with your comments, ideas and suggestions Public Entity Martin Ambacher, Chair The Public Entity Substantive Law Committee continues in its pursuit to provide up to date information for the public entity practitioner through monthly case law reviews and posting of information on the ADCNC Forums. We are working on scheduling a seminar for early 2008 general tort claims, public information requests, and police practices and misconduct cases. We will also be working with the Landowner Liability Substantive Law Committee on a seminar regarding ADA issues. If you would like to get involved in planning, have ideas for seminars, or would like to share information regarding recent trials or novel issues you have had to address, please contact me or John Vrieze. Toxic Torts Chris Wood, Chair Meg Gambino, Vice-Chair The Toxic Tort Committee will meet once again this year during the ADCNCN Annual Meeting. Please plan to join us in San Francisco at the Westin St. Francis Hotel on Friday morning, December 14, prior to the start of that day s sessions. We will discuss recent developments in toxic tort law and plan events for the coming year; so be sure to come with ideas for the 2008 Toxic Tort Committee Spring Seminar series. With input from our talented members, we expect that next year s seminars will rival the tremendous success of our 2007 series on asbestos litigation. The meeting will be led by committee chair, Chris Wood, and co-chair, Meg Gambino. October 30th, the Toxic Tort Committee will co-sponsor a brown bag seminar with the Landowner Liability Substantive Committee on mold claims. The Toxic Tort Committee meets approximately once a month to discuss recent developments and to plan its useful and popular seminars. Contact Chris Wood, at McKenna Long & Aldridge LLP, (415) , or Meg Gambino, at Schiff Hardin LLP, (415) , if you have questions about this committee or if you have suggestions for future seminar topics. Transportation Keith Chidlaw, Chair Jim Treppa, Vice-chair The Transportation Committee of ADC anticipates much more future activity. The committee is currently planning a brown bag seminar and are considering a half-day seminar for early The brown bag seminar will consist of a discussion from experienced trial and litigation attorneys in the field on the proper way to take depositions of sceneof-the-accident emergency personnel and CHP Officers that perform accident reconstruction as a part of their accident reports. One of our scheduled speakers is a former CHP Officer turned trial attorney. This will take place in late October or early November Our potential half-day seminar will be discussed at the Committee Meeting to be held during the ADCNC Annual Meeting in December. We encourage all attorneys practicing in the transportation industry to attend. We encourage all attorneys practicing in the field of transportation law to get involved in the committee. Ideas for seminar topics, articles and other areas of interest can be forwarded to Jim at [email protected] or to Keith at [email protected]. Substantive Law Committees Hoping to tap into someone else s knowledge? Join one of the ADC s Substantive Law Committees. The current chairs for the Substantive Law Committees are as follows: Construction Melissa Aliotti (Chair) Read & Aliotti (916) [email protected] David Daniels (Vice-Chair) Gurnee & Daniels LLP (916) [email protected] Insurance Lawrence Guslani (Chair) Hayes, Davis, Bonino, Ellingson, McLay & Scott (650) [email protected] Brian Harrison (Vice-Chair) Sedgwick, Deter, Moran & Arnold (415) [email protected] Employment Todd Roberts (Chair) Ropers, Majeski, Kohn & Bentley (650) [email protected] Erica Hermatz (Vice-Chair) Littler Mendelson (408) [email protected] Landowner Liability Todd Wenzel (Chair) Ropers, Majeski, Kohn & Bentley (415) [email protected] Laura Flynn (Vice-Chair) Low, Ball & Lynch (650) [email protected] Medical, Health Care and Malpractice Mike Mordaunt (Chair) Riggio, Mordaunt & Kelly (209) [email protected] Dominique Pollara (Vice-Chair) Schuering, Zimmerman Scully, Tweedy & Doyle (916) [email protected] Public Entity Marty Ambacher (Chair) McNamara, Dodge, Ney, Beatty, Slattery, Pfalzer & Borges (925) [email protected] Toxic Torts Christopher Wood (Chair) McKenna, Long & Aldridge (415) [email protected] Mary Ellen Gambino (Vice-Chair) Morgenstein & Juberlirer, LLP (415) [email protected] Transportation Keith Chidlaw (Chair) Schuering, Zimmerman Scully, Tweedy & Doyle (916) [email protected] James Treppa (Vice-Chair) Bledsoe, Cathcart, Diestel & Pedersen, LLP (415) [email protected] For more information, contact any of these attorneys or the ADC office: 2520 Venture Oaks Way, Suite 150 Sacramento, CA (916) fax (916) Defense Comment Fall 2007

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22 Evaluating Wage Loss Claims Where Plaintiff s Legal Residency May Be an Issue By Peter Glaessner, Lombardi. Loper & Conant, LLP Immigration reform is percolating in Congress again, stirring a heated debate. It is estimated that at least 12 million illegal immigrants currently reside in the United States, with a substantial percentage residing in California. Many are employed here and, as a matter of statistical probability, a percentage will become injured, either at work or otherwise. This article discusses strategies for defending the future wage loss claim in a personal injury lawsuit brought by a plaintiff while illegally residing and/or working in this state. A typical case arises from the following hypothetical facts: The plaintiff was born in Mexico and immigrated to the United States twenty years ago, then went to work washing dishes until his cousin got him a job at Local 3 as a painter. He lived in San Francisco and then established a relationship with a woman who was also born in Mexico and immigrated without authorization to California. Though never married, they had two children, both born in San Francisco. His pay as a painter was good really good, until he fell from a scaffold, seriously 22 Defense Comment Fall 2007 injuring his back. You know the story from here the plaintiff finds a third party to sue, usually the general contractor, or a host of specialty subcontractors other than his employer. The wage loss claim premised upon the argument that he will never again work as a union painter and his future is operating a computer at onefourth his pre-injury wages. The plaintiff s future wage loss claim is well into the seven figures, based on the assumption the plaintiff was deprived of an uninterrupted stream of future wages as a painter working in California. The defense lawyer must attack that premise, and to be ready to present a vastly different view of damages, based upon the current state of the law. When a person resides in our country illegally in violation of our immigration laws that person is subject to removal (a term of art in immigration law, replacing the word deportation ). Therefore, if the person is subject to removal, shouldn t this fact bear upon their anticipated future earnings? 1 Of course. Or, as one California appellate court succinctly put it: That is to say, if respondent were returned to Mexico, the income he could expect to receive there would be markedly less than a figure derived from his sojourn here. Rodriguez v. Kline (1986) 186 Cal.App.3 rd 1145, The Defense Goals So what is the defense strategy? There are two complimentary, but distinct goals. The first is to conduct discovery that will lead the trial judge to find that the plaintiff is residing and/or working here illegally, and then to exclude evidence of future wage losses based upon the assumption of future employment in this country. The second is to develop an alternative wage loss scenario, working with a vocational rehabilitation expert and economist. Their task is to develop one or more plausible scenarios for the plaintiff to become employed, or self-employed, if living in his/her country of citizenship. 2 A Preliminary Question of Law While jurors are called upon to measure the extent of damages, the jury s Continued on page 23

23 Wage Loss Claims continued from page 22 assessment must be based upon the proper foundational facts. Expect to hear from plaintiff s counsel that they should be permitted to put into evidence what the plaintiff would earn if he stayed in this country, and the defense can then present its own evidence of future wage loss, if the plaintiff was returned to his country of citizenship. This approach to the admissibility of wage loss evidence must be vigorously challenged by the defendant, because it is at odds with the controlling authority. As noted by the Rodriguez court: However, one s citizenship is comparable only to an on-off switch; a person is either subject to deportation or is not. If he has been injured through the fault of another, his recovery should not be raised or lowered based upon the probabilities that the law s commands actually will be carried out in any particular instance. Therefore, whenever a plaintiff whose citizenship is challenged seeks to recover for loss of future earnings, his status in this country shall be decided by the trial court as a preliminary question of law. Rodriguez v. Kline, supra, 186 Cal. App.3 rd at Like any preliminary question of law, a defendant should bring to the claim for future wage loss to the trial judge s attention before trial. Because this issue is not amenable to summary adjudication, the defendant must present the issue by way of a motion in limine to exclude all evidence of plaintiff s future wage loss under wages that could be earned here. 3 Coupled to this motion, the defendant should request a hearing to determine the foundational fact of the plaintiff s lawful status, as permitted by Evidence Code section 402. If the trial judge is reticent to hold such a hearing, the defendant should press the issue, citing the above-quoted language in Rodriguez. The plaintiff is either subject to removal or not -- if so, evidence of his future wage loss calculated applying U.S. wage scales is irrelevant; if not, evidence of what wages he would earn in his country of citizenship is likewise irrelevant. How does the trial judge decide this preliminary question of law? The threshold burden of proof is on the defendant to establish that the plaintiff is an alien who is subject to removal. This information can often be obtained through deposition and written discovery, as discussed in the next section of this article. If this effort is successful, then the burden will shift to the plaintiff to demonstrate to the court s satisfaction that he has taken steps which will correct his deportable condition. Rodriguez v. Kline, supra, 186 Cal.App.3 rd at Discovery Early identification of the citizenship issue, coupled with well-crafted written discovery will go a long way toward establishing the evidence to support the motion in limine. The defendant s discovery starts with the basics of determining where he was born, and his citizenship status. It is also important to know if the plaintiff has applied for and/or received lawful permanent non-residence status, also known as a PNR. If so, the plaintiff should be asked to produce his PNR application and/or card issued by the Immigration & Naturalization Service (INS). Continued on page 25 Fall 2007 Defense Comment 23

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25 Summary of Selected Federal and California Supreme Court and Appellate Cases By Michael J. Brady Ropers, Majeski, Kohn & Bentley, Redwood City Recent Cases Editor s Note: The summaries in Defense Comment do not include all of the California cases summarized by Mike Brady, as the ADC is limited by the expense of printing and mailing all cases summarized. However, all cases summarized by Mike Brady (approximately 40% more than published in some issues) can be found on the ADC Web site ( Just another reason to use the Web site! Also, as always, remember to carefully check the subsequent history of any case summarized as the reported decisions may have been depublished or have had review granted. CALIFORNIA SUPREME COURT INVASION OF PRIVACY; LITIGATION PRIVILEGE Jacob B. v. County of Shasta (2007) 40 Cal.4th 948, 56 Cal.Rptr.3d 477 FACTS: Jacob B., while a 15-year-old minor, molested a 5-year-old boy. In complicated family law matters pertaining to divorce and visitation rights, a county official became aware of the fact of the molestation years later (after Jacob B. was an adult) and sent a letter to the court pointing out the molestation by Jacob B. because this was relevant to whether the victim should be allowed to see Jacob B. Jacob B., contending that this information was an invasion of privacy (because it reflected on what he had done as a juvenile) brought a lawsuit against the county. The trial court in essence held that the litigation privilege did not trump the constitutional right of privacy, allowed the action to go to the jury, and the jury returned a verdict for Jacob B. in the amount of $30,000. The court of appeal affirmed. SUPREME COURT DECISION: Reversed. The constitutional right of privacy must yield to the litigation privilege. The litigation privilege under Civil Code 47(b) applies to the letter sent to the family court by the county official. It was a communication protected by the statute. Fall 2007 Defense Comment

26 Recent Cases PRIVACY; INVASION OF PRIVACY Taus v. Loftus (2007) 40 Cal.4th 683, 54 Cal.Rptr.3d 775 FACTS: Plaintiff Taus was the anonymous subject of a case study which had been set forth in a scholarly article. The case study dealt with plaintiff s experiences with repressed memory as a result of childhood abuse. The defendants had published subsequent articles about plaintiff but had still kept plaintiff s name anonymous (Jane Doe). The plaintiff sued the defendant however claiming invasion of privacy and improper tactics on the part of defendants in gathering the information that was the subject of the subsequent articles. The defendants moved to dismiss under the Anti-SLAPP statute. The trial court dismissed most of the claims. The court of appeal agreed. SUPREME COURT DECISION: The Supreme Court agreed that most of the numerous claims that plaintiff alleged should be dismissed. However, the Supreme Court created an important exception allowing plaintiff to proceed under the theory that the defendants had made misrepresentations to plaintiff s friends and family members in order to convince them to reveal confidential information about the plaintiff. The plaintiff was claiming that the defendants (journalists) represented themselves as mental illness experts who were associated with mental illness experts in whom plaintiff had confided, and that this was the way that plaintiff s friends and relatives had been convinced to provide private information about plaintiff to these defendants. COMMENT: This decision will undoubtedly cause alarm among the journalistic community, since they sometimes do make such misrepresentations in order to obtain information from individuals. The Supreme Court rejects the defendants claims that such conduct is protected by free speech guarantees under the Constitution. CALIFORNIA COURT OF APPEALS EMPLOYMENT TORTS; REPORTING CRIMINAL ACTIVITY; WRONGFUL TERMINATION Franklin v. Monadnock Co. (2007) 151 Cal.App.4th 252, 59 Cal.Rptr.3d 692 FACTS: Franklin worked for Monadnock Company. A co-worker threatened to kill various employees. The employees elected Franklin to complain to Human Resources, which he did. Human Resources failed to do anything. The bad employee then attempted to stab Franklin with a screwdriver. He complained to the police; Franklin was then fired by Monadnock and he filed a wrongful termination action in violation of public policy. The trial court sustained Monadnock s demurrer and dismissed the case. APPELLATE COURT DECISION: Reversed. Firing an employee for reporting criminal activity or unsafe working conditions at the place of employment is a violation of public policy. The public has an interest in a crime-free workplace. INSURANCE BAD FAITH; DUTY TO DEFEND; STIPULATED JUDGMENTS Delgado v. Interinsurance Exchange of the Automobile Club of Southern California (2007) 151 Cal.App.4th 227, 59 Cal. Rptr.3d 799 FACTS: Delgado and Reid got into a fight. Reid allegedly kicked Delgado in the nose. Delgado sued Reid and the complaint alleged intentional assault and negligent assault. Specifically Delgado claimed that Reid had negligently exercised Reid s right of selfdefense and unreasonably acted in self-defense. Reid tendered the complaint to his insurer (Auto Club) but the insurer refused to defend on grounds that there was no occurrence, on grounds of the intentional acts exclusion, and on grounds that there was no duty to defend because of Insurance Code section 533 (precluding coverage for willful acts). Delgado and Reid then entered into a stipulated judgment for $150,000. Reid assigned his rights to Delgado, and Delgado proceeded to sue the Auto Club for bad faith and punitive damages. The trial court sustained the insurer s demurrer without leave and also found the stipulated judgment to be suspect. ii Defense Comment Fall 2007

27 Recent Cases APPELLATE COURT DECISION: Reversed. The claim of self-defense raises a factual dispute concerning the potential or possibility of coverage under the policy. See Gray v. Zurich, 65 Cal.2d 263, 275. Given this factual dispute, as a matter of law, the insurer owed a duty to defend. Furthermore the failure to defend under these circumstances constituted bad faith as a matter of law. The stipulated judgment was not invalid; it simply creates a rebutable presumption of reasonableness which the insurer is entitled to challenge as a factual matter. COMMENT: The court rejected the insurer s argument that there was a genuine dispute over the duty to defend, saying that the genuine dispute document does not apply to the duty to defend when there is a factual dispute concerning the potential for coverage. Indeed it is the factual dispute itself which creates the potential for coverage. However when there is a legal dispute concerning the duty to defend, the genuine dispute doctrine will apply. The unfortunate aspect of this decision is its holding that bad faith exists as a matter of law for breach of the duty to defend. There certainly is a possibility that the insurer could demonstrate to the jury that other evidence in the possession of the insurer indicated that it may have been mistaken in its decision not to defend, but not unreasonably so, thereby negating bad faith. CIVIL RIGHTS; DUE PROCESS CLAUSE; GOVERNMENT LIABILITY AND IMMUNITY O Dea v. Bunnell (2007) 151 Cal.App.4th 214, 59 Cal.Rptr.3d 684 FACTS: Patrick O Dea was a prison guard at Folsom Prison. He alleged that prison officials deliberately staged a fight between two rival gangs; that the gangs were released at the same time into the yard; that O Dea was never warned that this was going to happen; that plaintiff tried to break things up with pepper spray and a baton; but plaintiff suffered personal injuries as a result of the fight; and that plaintiff was deprived of his liberty rights under the Fourteenth Amendment by reason of what the prison officials had done. The trial court granted summary judgment for the defendants. APPELLATE COURT DECISION: Affirmed. Plaintiff had no claim under the Fourteenth Amendment due process clause. The prison officials did not prevent plaintiff from defending himself (he was able to do so with pepper spray and a baton). Simply because they may have orchestrated the fight and foreseen that plaintiff might get injured is not enough to create a due process violation. DAMAGES; EMOTIONAL DISTRESS; LANDLORDS McNairy v. C.K. Realty (2007) 150 Cal.App.4th 1500, 59 Cal.Rptr.3d 429 FACTS: Plaintiffs were tenants in a Los Angeles apartment complex. The complex was in terrible condition and was not properly maintained by the landlord. It was infested with cockroaches, floods occurred, the appliances didn t work, and it was filled with mold. In trial, the trial judge found that the landlord violated the warranty of habitability and was in violation of Civil Code section which allows for an award of actual damages. The trial court further found that the landlord was subject to Civil Code section allowing punitive damages for this kind of culpability. Emotional distress damages were awarded (among other damages). APPELLATE COURT DECISION: Affirmed. The statute allowing the tenants to recover actual damages includes the award of emotional distress. GOVERNMENT LIABILITY AND IMMUNITY; BIKEWAY; TRAIL IMMUNITY Prokop v. City of Los Angeles (2007) 150 Cal.App.4th 1332, 59 Cal.Rptr.3d 355 FACTS: Plaintiff was riding his bicycle along a Los Angeles designated bikeway. When he attempted to exit from the bikeway he collided into a cyclone fence. He sued the City claiming dangerous condition of property. The trial court granted summary judgment in favor of the City. APPELLATE COURT DECISION: Affirmed. This Class I bikeway was a trail within the definition of Gov. Code section which creates an absolute immunity for a public entity for injuries suffered during recreational activity on such a trail. Fall 2007 Defense Comment iii

28 Recent Cases INSURANCE COVERAGE; DUTY TO DEFEND AND INDEMNITY ADMINISTRATIVE PROCEEDINGS Ameron International Corp. v. Insurance Company of State of Pennsylvania (2007) 150 Cal.App.4th 1050, 60 Cal.Rptr.3d 55 FACTS: In complex proceedings involving construction defect which were before the United States Dept. of Interior Board of Contract Appeals, the Court of Appeal examines whether insurers have a duty to defend and indemnify policy holders in such hearings. The court follows Foster-Gardner and Powerine in holding that even though a carrier does not define the term suit or damages, it will still have no duty to defend or indemnify these kinds of adjudicative proceedings (as distinguished from civil actions in court or money orders of a court to pay damages). However if the insurance policy defines the term suit to say civil proceedings or arbitration hearings, then the term suit is broader than civil actions and the insurer will have a duty to defend these kinds of adjudicative administrative hearings. In addition if the policy requires the insurer to indemnify against expenses or loss in addition to damages, the liability of the insurer to indemnify will not be limited to money a court orders the policyholder to pay and can include money ordered to be paid by the administrative proceeding. INSURANCE COVERAGE; CONTINUOUS LOSS; EXCESS AND PRIMARY COVERAGE; DUTY TO DEFEND; SIR Padilla Construction Co. v. Transportation Insurance Co. (2007) 150 Cal.App.4th 984, 58 Cal.Rptr.3d 807 FACTS: A stucco contractor allegedly improperly applied the stucco, resulting in claims that were continuous and progressive over a number of years. The stucco contractor had primary insurance with four different policies over four continuous years. These policies were Stage I, Stage II, Stage III and Stage IV. During the Stage I policy year, the stucco contractor also had an umbrella carrier which had an obligation to drop down to defend once all underlying insurance had been exhausted. With respect to the Stage IV policy, there was a $25,000 self-insured retention (SIR) which included defense costs. The Stage I policy was exhausted; Stage II and Stage III insurers were insolvent; the insured for strategy reasons did not commence the SIR under Stage IV desiring to trigger a defense under the umbrella policy (over the Stage I policy). Hence, the litigation. APPELLATE COURT DECISION: The Appellate Court ruled in favor of the umbrella carrier. The SIR did constitute other insurance even though the umbrella policy and the use of the term other insurance did not refer to the concept SIR. Hence, until the SIR was exhausted under the Stage IV policy, the umbrella carrier would have no duty to defend. COMMENT: What the Appellate Court is doing here is applying the horizontal rule, namely, that an excess carrier has no duty to drop down and provide a defense until all existing primary coverage has been exhausted. The vertical rule applies only when an excess carrier s language states that it is excess above a specifically described policy and will drop down when that specifically described policy is exhausted. Otherwise the horizontal exhaustion rule is the settled rule in California. EMPLOYMENT TORTS; FAMILY LEAVE ACT; DISCRIMINATION Faust v. California Portland Cement Co. (2007) 150 Cal.App.4th 864, 58 Cal.Rptr.3d 729 FACTS: Faust had communicated on his computer information about some internal theft at his place of employment. For some reason this information got out and became known to other employees who shunned Faust and Faust became very agitated over this phenomenon. He began to have serious psychiatric and other physical problems and presented a claim for workers compensation, had a workers compensation attorney, and also saw a psychiatrist. His employer never told him about California s Family Medical Leave Act; Faust took time off and was then fired by his employer who contended that Faust had not communicated to the employer when the employer had requested information. Faust took the position that a chiropractor had communicated with the employer concerning his disability, but the employer took the position that only a physician, not a chiropractor, was qualified to submit reports on the medical condition of Faust. The employer fired Faust while he was on leave. Faust filed suit but the trial court dismissed all claims. iv Defense Comment Fall 2007

29 APPELLATE COURT DECISION: Substantially reversed. The failure of the employer ever to tell Faust about his rights under California s Family and Medical Leave Act justified Faust s claim for wrongful discharge when he was on leave, taking the leave that was allowed to him under the Act. Faust did communicate with the employer through a psychiatrist and the employer had the opportunity to consult the workers compensation attorney, which it did not. There is no justification for the employer s failure to accept reports from a chiropractor, as distinguished from a physician. DEFAMATION; REPUTATION; TERMINATING SANCTIONS Del Junco v. Hufnagel (2007) 150 Cal.App.4th 789, 60 Cal.Rptr.3d 22 FACTS: Tirso Del Junco was a vascular surgeon. He filed a lawsuit against Hufnagel alleging that Hufnagel had established a counterfeit website (purporting to be the website of Dr. Del Junco himself). The information on this counterfeit website suggested that Del Junco was not licensed and did not have the kind of education to qualify him to be a vascular surgeon. Del Junco lost income as a result of a fall off in patients and he brought a defamation action. There was an incredible lack of cooperation on the part of the defendant (who was in pro per), including numerous failures to comply with discovery, failure to pay monetary sanctions, etc. Finally the trial court issued terminating sanctions awarding more than $500,000 to plaintiff, including $200,000 in punitive damages. MALICIOUS PROSECUTION; ANTI-SLAPP STATUTE; SLAPP-BACK LAW Hutton v. Hafif (2007) 150 Cal.App.4th 527, 59 Cal.Rptr.3d 109 Recent Cases FACTS: Herein we enter the bizarre world of the anti- SLAPP and SLAAback statutes, combined with the morass of malicious prosecution! If you can figure out who s on first you are ahead of the game! The anti-slapp statute is CCP The brand new SLAPPback statute is CCP The well-known plaintiffs lawyer Herb Hafif represented Hutton in a lawsuit. Hutton was unhappy with the result that Hafif achieved, and Hutton sued Hafif for malpractice. The malpractice claim was dismissed and Hafif then filed a maliciously prosecution action against Hutton. That lawsuit was dismissed pursuant to the anti-slapp statute. Hutton then filed a malicious prosecution action against Hafif arising out of the dismissal of Hafif s malicious prosecution suit. This particular lawsuit is known as a SLAPPback lawsuit (lawsuit allowed after dismissal of a lawsuit pursuant to the anti-slapp statute). Hafif in turn filed a special motion to strike under the anti-slapp statute, which was granted and Hafif obtained an award of attorney fees. APPELLATE COURT DECISION: Reversed. Attorney fees are not permitted to a party who achieves a dismissal of a SLAPPback lawsuit. SLAPPback lawsuits have various provisions in favor of the plaintiff and are much more plaintiff friendly than anti-slapp lawsuits. APPELLATE COURT DECISION: Affirmed. It was obvious that the information was defamatory and injured Del Junco s reputation. There was also abundant support for the trial court s terminating sanctions. Note: in an unpublished part of the opinion the Court of Appeal reversed the trial court s $200,000 in punitive damages as a terminating sanction because plaintiff had not introduced any evidence of wealth of the defendant. COMMENT: Whoever dreamed up anti-slapp and SLAPPback lawsuits certainly is looking out for the permanent employment of lawyers! FURTHER NOTE: This writer believes that the plaintiff used to be the state Republican Chairman of California when Reagan was President. Fall 2007 Defense Comment v

30 Recent Cases ARBITRATION; WRONGFUL DEATH; MEDICAL MALPRACTICE; PATIENTS BILL OF RIGHTS Fitzhugh v. Granada Healthcare and Rehabilitation Center, LLC (2007) 150 Cal.App.4th 469, 58 Cal.Rptr.3d 585 FACTS: Ruth Fitzhugh was 83 and admitted to Granada to receive care for a fractured hip. There was evidence that she may have fractured her femur at Granada before she was transferred to another facility. When she was admitted to Granada, her son had signed a binding arbitration agreement, but claims under a Patients Bill of Rights (elder abuse) were not embraced by the agreement. The arbitration agreement also embraced wrongful death actions. Her husband had also signed a binding arbitration agreement as the legal representative and agent of Ruth. The husband and son filed a lawsuit for violation of the Patients Bill of Rights and for wrongful death. Defendants sought to compel arbitration, which was denied by the trial court. APPELLATE COURT DECISION: Affirmed. By statute, rights under the Patients Bill of Rights survived the death of a patient. Furthermore, the arbitration agreement itself exempted such claims. With respect to the wrongful death claims, the husband did not sign the arbitration agreement in his individual capacity, but in his representative capacity. Therefore, he may sue for wrongful death. The son never signed the arbitration agreement, he is therefore not bound. COMMENT: Interesting decision; it appears to conflict with other binding arbitration decisions, which do allow a binding arbitration agreement to bind non-signators in wrongful death cases. EMPLOYMENT TORTS; DISCRIMINATION; DISABILITY; ADVERSE EMPLOYMENT EFFECT Malais v. Los Angeles City Fire Department (2007) 150 Cal.App.4th 350, 58 Cal.Rptr.3d 444 FACTS: Plaintiff Malais was a Captain II in the Los Angeles Fire Department. He suffered the loss of a leg while working; he was then assigned to desk duty (entitled special duty) despite his request to be assigned to platoon duty, which would have placed him in charge of a group of firefighters involved in fighting fires. He sued for disability discrimination and adverse employment effect. The trial court granted summary judgment for the employer. APPELLATE COURT DECISION: Affirmed. Even though the plaintiff did not particularly like his work assignment, there was no discrimination. His pay was comparable, and his opportunities for promotion up the ladder were comparable. Therefore, there was no discrimination and no adverse employment effect. PROFESSIONAL LIABILITY; LEGAL MALPRACTICE; PARTNER S AUTHORITY TO ACT ON BEHALF OF FIRM PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 348, 58 Cal.Rptr.3d 516 FACTS: The case involves well-known attorney Robert Shapiro (O.J. Simpson case) and his law firm. Shapiro had a client (Laing) who was in receivership. Laing was arrested. Shapiro arranged for someone to visit Laing s house and numerous bags of cash were removed from the house and used to post bail for Laing and to pay $250,000 to Shapiro for legal fees. The plaintiff in this suit alleged that all of this was improper conduct with respect to the receivership (which allegedly owned the cash) and efforts were made to hold the law firm liable for Shapiro s conduct. The trial court granted summary judgment for the law firm. APPELLATE COURT DECISION: Reversed. Triable issues of fact existed as to whether Shapiro had authority to act on behalf of the law firm, of which he was a partner. Plaintiff had produced evidence that he was a member of the firm and that he had represented in court that he was appearing for the firm when he represented Laing. Therefore, summary judgment was improperly granted. vi Defense Comment Fall 2007

31 Recent Cases ANTI-SLAPP STATUTE; RELIGIOUS PRACTICE Castillo v. Pacheco (2007) 150 Cal.App.4th 242, 58 Cal.Rptr.3d 305 FACTS: Castillo sued his neighbor Pacheco under a theory of nuisance. Pacheco was lighting big fires in his backyard. Pacheco claimed that this was pursuant to a religious ceremony, and Pacheco filed a special motion to strike under C.C.P on grounds that the anti-slapp protected the free exercise of religion. The trial court denied the motion to strike. APPELLATE COURT DECISION: Affirmed. The anti- SLAPP statute does not incorporate the entire Bill of Rights and is meant to protect the exercise of free speech. It is not broad enough to embrace the free exercise of religion. Accordingly, the special motion to strike was properly denied, and the anti-slapp statute is not applicable. INSURANCE COVERAGE; CONTINUING LOSS; CIGA Stonelight Tile, Inc. v. California Insurance Guarantee Assoc., (2007) 150 Cal.App.4th 19, 58 Cal.Rptr.3d 74 FACTS: This action involved a claim by a tile company against a recycling company. The recycling company injected a lot of dust pollution into the air, which hurt the tile company s business. The losses went on for a long period of time, (since 1991) and were continuous and progressive in nature. There were various insurance companies (liability) on the risk. Plaintiff settled with some of the insurance companies (which were solvent) for less than the policy limits; other insurance companies were insolvent, and plaintiff sought to bring in CIGA with respect to those claims. CIGA successfully obtained dismissal from the trial court. APPELLATE COURT DECISION: Affirmed. Plaintiff has no claim against CIGA until all limits of available insurance have been exhausted. In this case, plaintiff settled with solvent insurers for less than the policy limits, meaning the limits were not exhausted. DEFAMATION; ANTI SLAPP Morrow v. Los Angeles Unified School District (2007) 149 Cal.App.4th 1424, 57 Cal.Rptr.3d 885 FACTS: Morrow was a school principal; there were riots at the school caused by racial tensions. Newspaper articles mentioned the problem and quoted the superintendent of schools as saying that Morrow was about to retire and that this tenure had been a contributing factor to the problems. Morrow sued for invasion of privacy and defamation. The trial court granted defendant s anti-slapp motion under C.C.P APPELLATE COURT DECISION: Affirmed. The comments related to a matter of public interest; furthermore, the comments were privileged under the executive officer comment privilege in Civil Code 47(a). The defamation and invasion of privacy claims were therefore properly dismissed. DEFAMATION; ANTI SLAPP Morrow v. Los Angeles Unified School District (2007) 149 Cal.App.4th 1424, 57 Cal.Rptr.3d 885 FACTS: Morrow was a school principal; there were riots at the school caused by racial tensions. Newspaper articles mentioned the problem and quoted the superintendent of schools as saying that Morrow was about to retire and that this tenure had been a contributing factor to the problems. Morrow sued for invasion of privacy and defamation. The trial court granted defendant s anti-slapp motion under C.C.P APPELLATE COURT DECISION: Affirmed. The comments related to a matter of public interest; furthermore, the comments were privileged under the executive officer comment privilege in Civil Code 47(a). The defamation and invasion of privacy claims were therefore properly dismissed. The trial court correctly dismissed CIGA from the suit. Fall 2007 Defense Comment vii

32 Recent Cases ASSAULT AND BATTERY; INTENT Austin B. v. Escondido Union School District (2007) 149 Cal.App.4th 860, 57 Cal.Rptr.3d 454 FACTS: The plaintiffs were severely disabled autistic children (approximately eight years of age) attending a special education program in defendant district facilities. Plaintiffs allege that an instructor sexually abused them by improperly touching them and stated causes of action for assault and battery. The trial court threw out most of the claims by granting non-suit, holding that no intent to harm had been proven. On the remaining causes of action, the jury ruled for the defendants. The trial court awarded attorney fees of $24,000 to the plaintiffs and against the defendants. APPELLATE COURT DECISION: Affirmed. The trial court correctly ruled that intent to harm was a necessary element of the claim, and no evidence of intent to harm was shown. With autistic children, touching and guidance will often be a necessary element of the instruction process, and enrollment of the children in the special program is consent to such touching. Attorney fees were properly awarded because the action was not brought in good faith due to the total lack of evidence of improper conduct. INSURANCE COVERAGE; EMPLOYEE DISHONEST POLICY Simon Marketing v. Gulf Insurance Co. (2007) 149 Cal.App.4th 616, 57 Cal.Rptr.3d 49 FACTS: The policyholder (Simon) ran a promotional business. One of its major clients was McDonald s and it ran a promotional campaign for McDonald s for about 12 years. This also included McDonald s franchisees. The promotion included the program Who Wants To Be A Millionaire and Monopoly. Under the plan, prizes were awarded all across the country through the practice of seeding winning tickets under a giveaway contest. An employee of Simon by the name of Jacobson engaged in a secret conspiracy with others deliberately sending the winning tickets to selected and known people. The value of all the winning tickets was more than $21 million by the time the conduct was discovered. McDonald s cancelled Simon, Simon lost an incredible amount of business and was also sued and driven out of business through the settlements and judgments that resulted. Simon sought coverage under an employee dishonesty policy, but the trial court ruled that there was no coverage. WORKERS COMPENSATION; STATUTORY EMPLOYER Heiman v. Workers Comp. Appeals Bd. (2007) 149 Cal.App.4th 724, 57 Cal.Rptr.3d 56 FACTS: Condominium association hired Pegasus, a property management company, to manage its affairs including doing repairs. Some gutter work needed to be done and Pegasus hired Hruby to do the work. Hruby was an unlicensed contractor. One of Hruby s employees (Aguilera) was on the job for only one day when he fell and was severely injured. He filed a worker s compensation claim against the association, the unit owners, Pegasus, and Hruby. APPELLATE COURT DECISION: Affirmed. Under the court s interpretation of the policy, there had to be physical damage to the policyholder s property, and that did not exist. Even if there were a physical loss, there would still be no coverage. The covered property belonged to McDonald s, not Simon, and therefore, Simon would not have a claim for coverage. There was also an exclusion in the policy excluding loss of income exactly what Simon is claiming. APPELLATE COURT DECISION: In a complex case, the court of appeal in essence ruled that everyone except the unit owners would be treated as employers of the injured employee for purposes of workers compensation. The unit owners were exempt because special statutes exempt individual homeowners from liability unless the injured employee had worked for the homeowner more than 52 hours within 90 days of the accident. viii Defense Comment Fall 2007

33 Recent Cases SETTLEMENT; GOOD FAITH SETTLEMENT TSI Seismic Tenant Space, Inc. v. Superior Court (2007) 149 Cal.App.4th 159, 56 Cal.Rptr.3d 751 FACTS: This is a very interesting construction defect case involving issues of indemnity and good faith settlement. The plaintiff owned an apartment complex. There was some serious settlement problems with resulting damage and the owner sued three defendants: the general contractor, the structural engineer, and Geocon, a geo-technical engineer who had done soils analysis and made foundation recommendations based on the analysis. The unusual feature of the case is that the owner had a special contract with Geocon, which provided that Geocon s liability to the owner would be limited to $50,000 for the entire project and that if Geocon was exposed to any amount greater than that, the owner would indemnify Geocon for that additional amount. The owner entered into a settlement with Geocon for the $50,000. The parties then moved to obtain a good faith settlement determination from the trial court. This was opposed to the non-settling defendants who argued that Geocon was responsible for approximately half of the owner s $6 million damage claim. Expert declarations were produced to corroborate that. A referee determined that the limitation of liability ($50,000) was valid. The trial court ruled that the settlement was in good faith and therefore prevented the non-settling defendants from filing cross-complaints against Geocon. APPELLATE COURT DECISION: Reversed. In determining whether a settlement is in good faith, a trial court is not only to determine whether the proportionate share of responsibility has been paid by the settling defendant to the plaintiff, but also the trial court must determine whether the amount paid by the settling defendant is an appropriate amount given the exposure of the settling defendant to the nonsettling defendants who would be suing the settling defendants for indemnity or contribution. $50,000 is way below the proportionate amount that the settling defendant would be exposed to with respect to the indemnity cross-complaint, and therefore, it was an abuse of discretion for the trial court to enter a good faith settlement determination. The owner obviously had an incentive in obtaining a good faith settlement determination because this would also eliminate the owner s obligation to indemnify Geocon on the inevitable indemnity crosscomplaints brought by the non-settling defendants. COMMENT: Interesting case, but this type of limitation of liability (to a cash amount) is probably rarely seen in the construction defect context. GOVERNMENT LIABILITY AND IMMUNITY; ESTOPPEL Jordan v. City of Sacramento (2007) 148 Cal.App.4th 1487, 56 Cal.Rptr.3d 541 FACTS: Plaintiff Jordan slipped and fell on a public sidewalk. Plaintiff filed a timely claim against the City of Sacramento. The City denied the claim and contended that the private landowner was responsible and not the City. Plaintiff then sued the private landowner, but the lawsuit was filed more than six months after the claim had been filed against the City and when plaintiff sought to add the City as a defendant, the City successfully moved for summary judgment on grounds that the lawsuit had not been timely filed against the City. Plaintiff contended that estoppel applied. APPELLATE COURT DECISION: Summary judgment in favor of the City affirmed. The City was probably responsible despite its protestations. However, no bad faith was present in light of the City s representations, and the law was accessible to the plaintiff and her attorney (plaintiff at all times represented by counsel). No basis for estoppel was present. Fall 2007 Defense Comment ix

34 Recent Cases EMPLOYMENT TORTS; HARASSMENT; LIABILITY OF EMPLOYER FOR CONDUCT OF SUPERVISOR Myers v. Trendwest Resorts, Inc. (2007) 148 Cal.App.4th 1403, 56 Cal.Rptr.3d 501 FACTS: Trendwest was in the resort business; Myers and Damlahki were salespersons. Damlahki was promoted to supervisor of the sales people. Damlahki and Myers were on a sales promotion trip. Myers alleged that Damlahki sexually harassed her by telling her that he could guarantee bonuses for her if she cooperated with him sexually. She also alleged that he stalked her. Myers sought to hold Trendwest liable. The trial court granted summary judgment for Trendwest on grounds that harassment had taken place outside the workplace. APPELLATE COURT DECISION: Reversed. The employer under the FEHA is strictly liable for sexual harassment committed by a supervisor if the harassment is connected to the employment relationship. In the present case, it is not an absolute defense that the harassment allegedly took place away from the workplace; it was on a sales promotion trip, and therefore, had some connection with the employment. There were triable issues of fact, and therefore summary judgment should not have been granted. INSURANCE COVERAGE; EQUITABLE SUBROGATION; PRIMARY VERSUS EXCESS Transcontinental Insurance Co. v. Insurance Company of the State of Pennsylvania (2007) 148 Cal.App.4th 1296, 56 Cal.Rptr.3d 491 FACTS: The underlying litigation was a construction defect case involving a developer and multi subcontractors. CNA insured the subcontractors, and the developer was an additional insured under those policies. The developer had its own primary insurance policy and an excess insurance policy with ISOP. The CNA policy insured the developer as an additional insured for liability arising out of the subcontractors work. The developer s primary insurance policy exhausted. The ISOP policy contained a provision obligating ISOP to defend when the primary policy was exhausted, but ISOP refused to do so. Therefore, CNA assumed the entire defense while reserving its rights later to make claims against ISOP. The underlying case settled for more than $5 million. ISOP paid more than $1 million, and CNA paid only a small amount. CNA then filed an equitable contribution claim against ISOP, and the trial court agreed that this was proper. APPELLATE COURT DECISION: Affirmed; however, equitable subrogation is the proper theory, not equitable contribution. The claims against the developer were mixed in nature insofar as the CNA coverage was concerned. Some of the claims were covered (those against the developer arising out of the subcontractors work); some were potentially not covered (those involving direct liability of the developer would not be covered under the CNA policies). CNA had defended everything. When the developers own primary policy exhausted, with respect to the defense obligation, ISOP became primary along with CNA. Therefore, CNA has a valid equitable subrogation claim. INSURANCE; PAYMENT OF PREMIUM IN INSTALLMENTS Interinsurance Exchange of Automobile Club v. Superior Court (2007) 148 Cal.App.4th 1218, 56 Cal.Rptr.3d 421 FACTS: Insurance Code section 381(f) requires that on the declaration page, the amount of the premium paid by the policyholder be set forth. This case presents the issue as to whether, when the insured elects to pay the premium in installments, that must be set forth on the declarations page as well on the theory that this constitutes a premium as well. The insurer had explained in a letter to the insureds the concept of installment payments, that the interest would be more than 17%, and the insured conceded that he understood the letter and that it was unambiguous. In a suit brought by the policyholder against the insurer for failure to state the installment sales amounts on the declaration page, the trial judge postponed the matter and sought an opinion from the Department of Insurance on the issue. The Department of Insurance issued an opinion stating that the installment sales amount was a premium and should be stated on the declarations page. The trial court followed the ruling and granted summary judgment for the policyholder. APPELLATE COURT DECISION: Reversed. The installment sales method is not a premium and is not required to be set forth in the declarations page. Installment sales method is simply the time value of the money, as distinguished from the premium itself. Summary judgment should be granted to the insurer. x Defense Comment Fall 2007

35 Recent Cases DAMAGES; HOSPITAL LIENS; SETTLEMENTS County of San Bernardino v. Calderon (2007) 148 Cal.App.4th 1103, 56 Cal.Rptr.3d 333 FACTS: Calderon was involved in an automobile accident and the other driver was at fault. Calderon was injured. Hospital rendered $113,000 in medical services to him. Calderon hired an attorney (Parker) to represent him in the auto accident case and they had an agreement that Parker would have a lien against any settlement. Parker did $50,000 worth of work. On November 13, 2003, the County notified Parker and Calderon of its lien (this was after Calderon and Parker had agreed to the attorney lien). Calderon settled for $150,000. The County sought to collect the full lien, but the trial court ruled that the attorney lien had priority since it was created before the County Hospital had given notice. APPELLATE COURT DECISION: Affirmed. The Hospital Lien Act requires that to gain priority, the hospital should give notice. Since notice was given by the hospital after the attorney lien had been created, the attorney lien has priority. BAD FAITH; GENUINE ISSUE DEFENSE Jordan v. Allstate Insurance Co. (2007) 148 Cal.App.4th 1062, 56 Cal.Rptr.3d 312 FACTS: In the first case (Jordan I) Jordan, a homeowner, suffered damage when a window fell out and part of the floorboard collapsed. It was ascertained that this was because of a fungus. Jordan filed a claim against Allstate, the homeowners carrier. The policy contained an exclusion for wet or dry rot, which would include fungus. The policy also had an exclusion for collapse. But another section of the policy indicated that there was an exception to the collapse hazard unless the building totally collapsed or part of the building collapsed due to hidden decay. In Jordan I, the court found that these provisions in the policy created inconsistency and ambiguity and the court reversed a summary judgment granted by the trial court in favor of Allstate and remanded the case. APPELLATE COURT DECISION: In Jordan II, the appellate court reversed. The court said that the genuine issue defense would not apply because of the triable issues of fact as to whether Allstate had done a full and complete investigation. The appellate court pointed to numerous claims as to the inadequacy of Allstate s investigation. Summary judgment was therefore reversed. COMMENT: Note that the California Supreme Court has granted review in a case called Wilson v. 21st Century Ins. Co., 38 Cal.Rptr.3d 514, which will review the same issue, namely, whether the genuine issue defense applies in failure to investigate cases. NEGLIGENCE; GOOD SAMARITAN STATUTE Van Horn v. Watson (2007) 148 Cal.App.4th 1013, 56 Cal.Rptr.3d 272 FACTS: Plaintiff Van Horn was in a single-car accident and was trapped in the car. Torti was driving along and saw the accident and attempted to assist by removing Van Horn from the vehicle. Van Horn claimed that she was not seriously injured but the removal process caused her permanent spinal damage resulting in paraplegia, and Van Horn sued Torti for negligence. Torti, relying upon the Good Samaritan statute (Health & Safety Code ) moved for summary judgment, which was granted by the trial court. APPELLATE COURT DECISION: Reversed. This statute only applies to the rendition of emergency medical care at the scene of an accident, and that was not what Torti was engaged in. COMMENT: The court pointed out that Government Code and Harbor and Navigation Code 656 are statutes, which apply to good samaritans who simply render emergency care at the scene of an accident. Perhaps those statutes would provide a basis for Torti s dismissal from the case. When the case was remanded, Allstate moved for summary judgment based upon the genuine issue defense, taking the position that the court of appeal in Jordan I had determined that Allstate s interpretation of its own policy was reasonable, even though erroneous. The trial court agreed granting summary judgment for Allstate. Fall 2007 Defense Comment xi

36 Recent Cases REINSURANCE; ATTORNEY CLIENT RELATIONSHIP Zenith Insurance Co. v. O Connor (2007) 148 Cal.App.4th 998, 55 Cal.Rptr.3d 911 FACTS: This is one of those rare published decisions dealing with reinsurers, the relationship between reinsurers and the ceding company, and the attorney who is defending the underlying case. The underlying case was against an insured and involved claims to force the insured to clean up environmental problems. Royal was the insurer for the policyholder. Royal had reinsurance with Zenith and the Zenith policy of reinsurance provided 100% reimbursement to Royal for settlements and judgments including 100% reimbursement to Royal for costs and legal fees incurred in defending the action. Royal hired Cozen O Connor to represent the insured. Royal had exclusive control over the defense. There were reporting obligations on the part of Royal and Cozen to Zenith. Zenith wrote to Cozen demanding that Cozen bring cross-claims against other insurers seeking to involve them and force them to contribute to the underlying costs and settlements. When Cozen indicated that it could not do so because it had a conflict of interest, Zenith insisted that Royal discharge Cozen O Connor, which Royal did, substituting another lawyer. Royal settled the case, but Zenith refused to reimburse Royal for the full amount of the settlement. Zenith then brought suit against Royal for mishandling of the case and also sued Cozen O Connor for malpractice. The trial court sustained Cozen O Connor s demurrer without leave to amend and dismissed the case. APPELLATE COURT DECISION: Affirmed. No attorneyclient relationship existed between Cozen O Connor and Zenith. The only attorney-client relationship was with Cozen O Connor and Royal, the ceding company. Cozen O Connor could not have represented Zenith because a conflict would have existed: the reinsurer was never exposed to extra-contractual liability, whereas Royal was always exposed to such liability, precluding representation of both by Cozen O Connor. INSURANCE COVERAGE; BREACH OF CONTRACT BY LANDLORD TO MAINTAIN LEASED PROPERTY; PROPERTY DAMAGE; PERSONAL INJURY COVERAGE Golden Eagle Ins. Co. v. Cen-Fed, Ltd. (2007) 148 Cal.App.4th 976, 56 Cal.Rptr.3d 279 FACTS: Washington Mutual leased the first floor of a building and a basement from Cen-Fed under a 25-year lease. Cen-Fed was obligated to maintain the leased property in first-class condition. WaMu contended that Cen-Fed failed to do so, breached its contract, and this resulted in the inability of WaMu to use part of the basement. WaMu sued Cen-Fed for breach of contract and declaratory relief. Cen-Fed was insured by Liberty Mutual under a CGL policy. A jury awarded WaMu $500,000 in damages. Liberty had defended that case under a reservation of rights. In later coverage litigation, the trial court found that there was no potential for coverage under the Golden Eagle CGL policy for personal injury coverage, but that since Golden Eagle had defended and since WaMu had obtained its attorney fees against Cen-Fed as a prevailing party and as part of the cost bill, Golden Eagle had to pay those attorney fees awarded against Cen-Fed. APPELLATE COURT DECISION: Affirmed in part, reversed in part. First of all with respect to the CGL coverage [coverage A] there was no occurrence in this case because what you had was a straight breach of contract and no fortuitous event. Furthermore, there was no property damage meaning physical injury to tangible property; the loss was economic only. Turning to coverage B, (personal injury coverage) while it is true that WaMu was unable to use part of the property because of deterioration of the building, the case of Mirpad, LLP v. California Ins. Guar. Assn. 132 Cal.App.4th 1058 (2005) holds that when the claimant is a corporation, as distinguished from an individual, no covered personal injury loss under the personal injury section can occur under a theory of invasion of the right of private occupancy. The coverage issues are not affected by Golden Eagle s admission in papers that it had a duty to defend; the insurer is not bound when an admission is contrary to law. xii Defense Comment Fall 2007

37 Recent Cases EMPLOYMENT TORTS; WRONGFUL TERMINATION Carter v. Escondido Union High School District (2007) 148 Cal.App.4th 922, 56 Cal.Rptr.3d 262 FACTS: Carter was teaching at a school district. He found out about a coach who had advised a student to take a weight-gain nutritional supplement and that this resulted in injury to the student. When he protested to the coach, the coach said that he would not do anything unless the parents became involved. Carter left that school district and went to work for the defendant school district. Defendant school district failed to renew Carter s probationary teaching position when it found out what he had done at the former school district. Carter sued for wrongful termination and recovered a verdict for over a million dollars. APPELLATE COURT DECISION: Reversed. No fundamental public policy had been violated. The weight-gain supplement was not an illegal substance and what the district did was not tethered to any fundamental constitutionally protected right. ARBITRATION; CLASS ACTIONS PROFESSIONAL LIABILITY; VETERINARIANS; MALPRACTICE De Mercado v. Superior Court (2007) 148 Cal.App.4th 711, 55 Cal.Rptr.3d 889 FACTS: McClungs wanted to buy a horse as a jumper for his daughter. McClung hired De Mercado, a veterinarian, to examine the horse. De Mercado gave a favorable report, except for slight arthritis. After McClung purchased the horse, it was discovered that the horse had a progressive degenerative disease, and that it was unfit as a jumper. McClung sued De Mercado for professional negligence under MICRA and sought punitive damages. De Mercado demurred. The trial court in essence ruled that the lawsuit was timely filed. APPELLATE COURT DECISION: Although veterinarians are embraced by MICRA, this action was not for professional negligence under MICRA. Under MICRA actions, claims may be asserted for personal injury or wrongful death. This action was not such an action; instead it was for economic loss as a result of a purchase of a horse. The trial court correctly ruled that the MICRA statute of limitations did not apply (a one-year statute), and the action was therefore timely filed. Lee v. Southern California University for Professional Studies (2007) 148 Cal.App.4th 782, 56 Cal.Rptr.3d 134 FACTS: Lee was enrolled in defendant s program. She sought permission to go inactive because of illness. The defendant did not comply with her request and she brought suit. She brought suit as a representative of a class, which was made up of more than 500 similarly situated people. The defendant sought to compel arbitration based upon the fact that more than 400 of the reported class members had signed arbitration agreements. The trial court denied the request for arbitration. APPELLATE COURT DECISION: Affirmed. Lee was the only plaintiff and the sole representative of the class, and she had not signed an arbitration agreement. When only some of the purported class members have signed arbitration agreements, this would not be binding upon the rest. Furthermore, Lee had a claim for injunction, and claims for injunction are not arbitrable. INSURANCE COVERAGE; CONTINUOUS PROGRESSIVE LOSS; SINGLE VERSUS MULTIPLE OCCURRENCES Safeco Insurance Co. v. Fireman s Fund Ins. Co. (2007) 148 Cal.App.4th 620, 55 Cal.Rptr.3d 844 FACTS: Homeowner lived on a hill. There was a landslide on the homeowner s property, and this caused damage to downhill landowners. The damage went on for a number of years, with additional damage occurring during the storms of each season. Safeco insured the homeowner for a period of four years, and damage was occurring during all four years. The actual landslide however happened during the first year of coverage. There as a $500,000 per occurrence limit under the Safeco coverage during each year. This was $500,000 per occurrence. There was also personal injury coverage under the policy during all four years; and the downhill landowners were claiming constant eviction or interference with their right to use their property and during all four years. Fall 2007 Defense Comment xiii

38 Recent Cases The insurance coverage dispute was between an excess policy and Safeco (the primary insurer) with the excess carrier taking the position that Safeco was on the risk for all four years and, not only that, but Safeco provided $500,000 under the CGL policy each year and $500,000 under the personal injury coverage each year, for a total of $1 million coverage each year. There was a verdict against the landowner (policyholder) for $4 million, and therefore the excess carrier contended the primary carrier was liable for all of the verdict, and there was enough primary coverage to satisfy the verdict. In a coverage dispute, the trial court agreed with Safeco that there was only $500,000 total coverage available, and that there was only a single occurrence (the landslide). APPELLATE COURT DECISION: Affirmed. The occurrence or the cause of the loss was the landslide, which happened at a discrete time. Simply because the damages resulting from the landslide extended over four years, and even though the happening of the damage triggered those later policies, this does not mean that those later policies were obligated to pay. There was only one occurrence, and therefore, Safeco s liability is limited to the $500,000 per occurrence limit. Furthermore, there is no separate $500,000 coverage available under the personal injury section. There was only one event (the landslide) and there is a total of only $500,000 available. COMMENT: Coverage attorneys must read this decision. This is one of those rare cases rejecting the continuous and progressive damage analysis (made famous in the asbestos cases) which hold that all the policies on the risk when any damages are happening are obligated to pay. Note that this dispute is between two insurance companies. Would the results have been different if the policyholder was suing the insurer (or the claimant under an assignment of rights)? Nonetheless, the analysis of the court of appeal is bound and somewhat of a departure from liberal principles of insurance policy construction followed for years in California. ARBITRATION; AUTHORITY Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 55 Cal.Rptr.3d 823 FACTS: Josephina Flores was senile and incompetent. Her husband, Luis, arranged for her to be admitted to a nursing home. He signed the admission papers and also signed an agreement providing that any disputes would be subject to binding arbitration. He was not the personal representative nor did he have a power of attorney. Later Josephina and Luis filed an action for negligence against the nursing home contending that Josephina had suffered a fractured leg and had been denied treatment for 24 hours. The nursing home petitioned to compel arbitration, but this was denied by the trial court. APPELLATE COURT DECISION: Affirmed. Simply because Luis was the next of kin would not authorize him to sign an arbitration agreement, even though he would be authorized to sign the admission documents. Nothing had been conveyed to the nursing home indicating that Luis was an authorized agent for Josephina. Being a spouse alone will not confer such authority. COMMENT: Interesting decision, which will certainly have ramifications in the nursing home context where many incompetent or severely disabled persons are placed. PROFESSIONAL LIABILITY ACCOUNTANTS; NEGLIGENCE AND FRAUD Kouri v. Superior Court (2007) 148 Cal.App.4th 460, 55 Cal.Rptr.3d 777 FACTS: Wincom was a private company in the telecommunications field contemplating a merger with Struthers Industries, a public company. The accounting firm BDO Seidman, was hired by Wincom to do an audit. They listed some assets that Wincom had on the balance sheet as contingent assets, meaning that they would have no value unless the merger took place. This was a violation of accepted professional accounting principals. Assets of Wincom were stated to be $121 million. Investors allegedly held onto stocks that they had bought before the accountants did their work in reliance on information in the balance sheets. After the merger, the merged company went bankrupt. The investors sued the accountants for negligence and fraud. The accountants demurred and the trial court xiv Defense Comment Fall 2007

39 Recent Cases sustained the demurrer. The appellate court reversed that and remanded the matter to the trial court. On remand, the trial court granted summary judgment on the negligence and the fraud count in favor of the accountants. APPELLATE COURT DECISION: Reversed. It is not necessary for the investors to prove that the accountants actually knew that their audit was false. If the accountants did their work recklessly and in violation of accepted accounting principles, this was enough. The plaintiff investors had produced declarations from experts indicating that such a departure from accepted accounting principles would have been a red flag to any accounting firm. This was sufficient to create a triable issue of fact on these issues. It also made no difference that the investors bought their stock before the accountants did their work; they made a showing that they held on to their stock in reliance on the audit report, and that was sufficient. COMMENT: This case has substantial interest to those attorneys who represent accountants in professional liability cases. It appears to widen the exposure of the accounting profession with respect to carelessly crafted audits a phenomenon that we have seen much of in recent years (led to the Sarbanes-Oxley laws). NINTH CIRCUIT INTERNET LIABILITY; COMMUNICATIONS DECENCY ACT Fair Housing Council of San Fernando Valley v. Roommates. com, LLC (2007) 489 F.3d 921 (Ninth Circuit) FACTS: Roommates.com was an online company engaged in matching up people as roommates. Roommates.com had 150,000 members. The company would prepare detailed questions which the members would answer. There was also a place at the end for random comments provided by the members in narrative form. Various public interest groups sued Roommates.com claiming that it had turned into a content provider and was facilitating discrimination on the basis of sexual orientation and also discrimination against people who had children living with them. The trial court threw the case out on grounds of the Communications Decency Act immunity for an internet provider. NINTH CIRCUIT DECISION: Reversed. Roommates.com was not just a passive internet provider but a content provider in light of the way that its questionnaires were set up and distributed. Accordingly it was not entitled to immunity under the CDA section 230(c)(1). However it was immune for the narrative information at the end of the questionnaire. COMMENT: This is a very controversial decision; there is a possibility that the entire court en banc will hear it. ARBITRATION; EMPLOYMENT AGREEMENTS; LAW FIRMS Davis v. O Melveny & Meyers (2007) 485 F.3d 1066, Ninth Circuit FACTS: Davis was a paralegal at the O Melveny firm in Los Angeles. As a condition of employment, Davis had to sign a binding arbitration agreement. Davis had a dispute concerning wage, hour, and overtime issues. He brought a class action. The firm sought to compel arbitration and asserted the Federal Arbitration Act. The trial court agreed ordering the case to arbitration. NINTH CIRCUIT DECISION: Reversed. An arbitration agreement will be found to be unconscionable if it is procedurally and substantively defective. Procedurally, this arbitration agreement was a take it or leave it agreement, giving the employee no choice and no opportunity to opt out. If the employee did not sign the agreement, the employee had to leave the firm. Substantively, there were several problems with the agreement: the agreement required the employee to give one year notice of any claims that the employee intended to pursue. This was a shorter period than the existing statute of limitations. The arbitration agreement contained a confidentiality provision; while some confidentiality provisions will be valid, this one was onerous and would interfere with the ability of the employee to investigate his own case, talk to other employees, outside persons, etc. The agreement also contained undue limitation on using customary employment related administrative procedures. Fall 2007 Defense Comment xv

40 Recent Cases COMMENT: This arbitration agreement was too technical. Arbitration agreements can be drafted which should be upheld by the courts and employers and other businesses should think of inserting provisions in the agreements that are of special benefit to the employee, such that a court will rule that the agreements are fair and reasonable and, indeed, unusually generous to the employee in certain respects. INTERFERENCE WITH CONTRACT; INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE; VIOLATION OF UNFAIR COMPETITION LAW CRST Van Expedited, Inc. v. Werner Enterprises, Inc. (2007) 479 F.3d 1099 (Ninth Circuit) FACTS: CRST was a trucking company. They hired drivers and put the drivers through a trainee program for about a year. During this year period, the drivers had a one-year signed contract with CRST. Werner, a competitor of CRST, hired away two of the drivers. CRST informed Werner of the contractual relationship and that the contract included a non-competition clause. Werner ignored this information and continued to use the drivers. CRST sued Werner for interference with contract, interference with prospective economic advantage, and violation of the Unfair Competition Law. The district court dismissed the claim. STATUTE OF LIMITATIONS; PRIVATE RIGHT OF ACTION; HOLOCAUST SURVIVORS Orkin v. Taylor (2007) 487 F.3d 734 (Ninth Circuit) FACTS: Orkin was the descendant of a Jewish art collector. The art collector had once been in possession of a Van Gogh painting during the Hitler era. The painting had been taken from him. The painting wound up in the possession of actress Elizabeth Taylor, and this was known since Orkin, the descendant of the art dealer, brought a claim against Taylor based on the Holocaust Victims Redress Act. The trial court dismissed the claim and also said the claim was barred by the three year statute of limitations. NINTH CIRCUIT DECISION: Affirmed. The congressional act created no private right of action; it was simply a statement by Congress on general principles. Furthermore, under state law, the claim was time barred. The claim is barred by the three year statute of limitations contained in CCP section 338(c) providing for the taking of goods or chattels. Even though the discovery rule applies to the statute, it was known since 1993 that Elizabeth Taylor owned the painting. NINTH CIRCUIT DECISION: Reversed. Plaintiff adequately stated a cause of action for interference with contract. The contracts were not at-will but were terminable only for cause and there was a signed written employment contract of which Werner was aware. The cause of action was adequately stated. Furthermore, this conduct of Werner constituted a violation of the Unfair Competition Law (UCL) and the cause of action was properly stated for that. Finally, plaintiff stated a proper cause of action for interference with prospective economic advantage. Even though that cause of action requires an independent wrongful act, this requirement is satisfied when Werner allegedly interfered with the contractual relationship that CRST had with the employees. xvi Defense Comment Fall 2007

41 Summary of Selected Nevada Supreme Court Cases Recent Cases By Justin Pfrehm Georgeson Angaran, Chtd., Reno, NV CIVIL PROCEDURE OBJECTION TO CLASS ACTION SETTLEMENTS BY UNNAMED CLASS MEMBERS: Marcuse v. Del Webb Communities 2007 W.L (Aug. 2, 2007): Unnamed class members in a construction defect action are parties to the class action and are bound by any final settlement in the class action. Thus, such unnamed class members have standing to appeal the trial court s dismissal of their class action. In addition, unnamed class members who are unable to opt out of a class action settlement must be permitted an opportunity in a separate action (if necessary) to preserve their own interests against settlement, which are independent from the certified defect issues. RELATIONSHIP BETWEEN SUMMARY JUDGMENT AND NRCP 41(E) S FIVE YEAR MANDATORY DISMISSAL RULE: Monroe v. Columbia Sunrise Hospital 158 P.3d 1008 (May 17, 2007): A trial court s complete grant of summary judgment in favor of a defendant and against plaintiff constituted a trial of the action for purposes of NRCP 41(e), which requires an action to be brought to trial within 5 years or is subject to mandatory dismissal. TOLLING OF FIVE YEAR MANDATORY DISMISSAL RULE DURING BANKRUPTCY STAY: Edwards v. Ed Ghandour 159 P.3d 1086 (June 7, 2007): The tolling effect of a bankruptcy automatic stay upon NRCP 41(e) s 5 year period of bringing a suit to trial only applies to the particular defendant who is engaged in the bankruptcy proceedings. Unless a trial court separately stays the plaintiff s action for other nondebtor defendants, the action may proceed against those defendants and the 5 year period continues to advance. Fall 2007 Defense Comment xvii

42 Recent Cases EMPLOYMENT OFFSETTING WORKERS COMPENSATION INSURER S BENEFITS FROM UNDERINSURED MOTORIST BENEFITS: St. Paul Fire & Marine Ins. Co. v. Employers Ins. Co. of Nevada 146 P.3d 258 (Nov. 9, 2006): NRS 616C.215(3) allows workers compensation insurers an independent right to seek subrogation against UM/UIM coverage purchased by an insured s employer. However, that right may be restricted by the UM/UIM carrier through the use of limitations and exclusions in the policy, i.e., the insurer may offset workers compensation benefits from UM/UIM benefits. WORKERS COMPENSATION INSURER DOES NOT HAVE ABSOLUTE RIGHT TO INTERVENE: American Home Assurance Co. v. Eighth Jud. Dist. Ct W.L (Nev.)(Dec. 21, 2006): A workers compensation insurer does not have an absolute right to intervene in the injured worker s third-party tort action pursuant to NRCP 24(a)(1). The insurer has a right to intervene pursuant to NRCP 24(a)(2) when it can prove that the injured worker might not adequately represent its interest. WORKERS COMPENSATION EXCLUSIVE REMEDY; PROPERTY OWNER IMMUNE FROM SUIT: Richards v. Republic Silver State Disposal, Inc W.L (Nev.)(Dec. 21, 2006): Immunity to property owners under Harris v. Rio Hotel & Casino, 117 Nev. 482 (2001) operates to bar claims that arise out of risks associated with the work for which the property owner hired the licensed contractor. NEGLIGENCE/DAMAGES CONSTRUCTION DEFECTS SCOPE OF VENDOR S STATUTORY DUTY TO DISCLOSE DEFECTS IN REAL PROPERTY: Nelson v. Heer 2007 W.L (Nev.)(July 26, 2007): The determination of whether a vendor of residential property is aware of a defect which would trigger a statutory duty to disclose a defect to a purchaser per NRS (1) is a question of fact to be determined by the trier-of-fact. A vendor has no statutory duty to disclose the presence of mold to a purchaser when the vendor is not aware of the mold. Also, the vendor has no statutory duty to disclose prior water damage after the vendor has repaired the damage and it was no longer a condition that materially lessened the value or use of the residence. xviii Defense Comment Fall 2007

43 Recent Cases COMPARATIVE NEGLIGENCE; SPECIAL VERDICT FORMS: Skender v. Brunsonbuilt & Development Co. 148 P.3d 710 (Dec. 28, 2007): In construction defect cases comparative negligence jury instructions must address claims subject to comparative negligence, including the expanded role of the homeowner in planning, design or construction of the residence, as well as those defects that occur later because of homeowner conduct. A special verdict form in construction defect cases is appropriate when multiple potential theories of liability are asserted and a party asserts a comparative negligence defense. In such a case, the trial court must specifically instruct on those aspects of the case to which the negligence claim applies, being mindful of the limitations on the comparative negligence defense, and use a special verdict form that makes clear under which theory damages are awarded and to which theories of liability the defenses apply. NEGLIGENCE Arata v. Faubion 161 P.3d 244 (June 28, 2007): Nevada s statute, NRS , imposing vicarious liability on motor vehicle owners who lend their vehicles to immediate family members is not unconstitutional under equal protection or substantive due process after applying the rational basis test. Also, who is an immediate family member is a question of fact to be resolved by the trier-of-fact. MED MALPRACTICE DISMISSAL OF COMPLAINT FOR LACK OF SUPPORTING MEDICAL EXPERT S AFFIDAVIT; NO AMENDMENT ALLOWED: Washoe Med. Center v. Second Jud. Dist. Ct W.L (Nev.)(Dec. 28, 2006): As a matter of first impression, when a plaintiff in a medical malpractice case fails to meet NRS 41A.071, requiring a plaintiff s complaint be supported by an affidavit from a medical expert setting forth averments of medical malpractice, the complaint is void ab initio, and must be dismissed without prejudice. No amendment to cure such a defect is allowed. Fall 2007 Defense Comment xix

44 Recent Cases PROFESSIONAL RESPONSIBILITY ATTORNEY MISCONDUCT DURING OPENING/ CLOSING; STANDARD FOR NEW TRIAL BASED UPON SUCH CONDUCT: Lioce v. Cohen 2006 W.L (Nev.)(Dec. 28, 2006): The standard for a new trial differs and is decided by whether the misconduct was objected to or not. For objected to and admonished attorney misconduct, the party moving for a new trial has the burden of showing that the misconduct is so extreme that the objection and admonishment could not remove the misconduct s effect. For unobjected to attorney misconduct, plain error review applies. The attorney in this case engaged in three types of misconduct during closing arguments: (1) jury nullification; (2) statements of personal opinion; and (3) golden rule arguments. All of his closing arguments were improper; thus the attorney was reported to the State Bar for discipline. FORMER CLIENTS; RELATIONSHIP BETWEEN DEFENSE COUNSEL, INSURER AND INSURED: Nevada Yellow Cab Corp. v. Eighth Jud. Dist. Ct. 152 P.3d 737 (Mar. 8, 2007): Under SCR 159, which governs conflicts based upon former representation, a lawyer may be disqualified from representing a client against a former client if the current representation is substantially related to the former representation. The Nevada Supreme Court adopted the majority rule that an attorney retained by a liability insurer to defend the insured represents both the insurer and insured in the absence of any conflict. xx Defense Comment Fall 2007

45 Wage Loss Claims continued from page 23 If the deposition testimony suggests the plaintiff is in this country illegally, ask two important, but often overlooked, questions at the deposition: 1. Have you done anything to pursue legal citizenship? 2. Do you have any present plans to pursue legal citizenship or legal immigration status? Many plaintiffs have taken no action, and have no plan or intent to apply for legal status. It is the very last thing they desire to do, unless they are assured of amnesty, and they will often, readily admit they have done nothing and have no future plan to do anything. This evidence is useful later to prove there has been no attempt to cure their illegal status. Do not be fooled into thinking that if the plaintiff can produce a social security card that it proves U.S. citizenship. Countless illegal aliens have obtained false social security cards in order to provide a prospective employer with a facially valid social security number to satisfy the employer s duty to screen for illegal immigrants. While it is always useful to try to obtain this information through a deposition, this is an area in which well-crafted written discovery is very useful. Written discovery requires a responding party (and the attorney) to search for all available information. Written discovery can require a responding party to admit facts in the form of legal conclusions, and to admit that the plaintiff has not applied for, or received various safe harbors under this country s immigration laws. The plaintiff s written responses, verified under oath, will be the foundational evidence for the trial judge to later decide the preliminary question of law, i.e., if the plaintiff is an alien who is subject to deportation. Some fairly basic, but well-drafted set appears in Appendix A of Metalworking Machinery, Inc. v. Superior Court (1977) 69 Cal.App.3 rd 791, 795. Additional discovery is posted on the ADC s website ( The Fifth Amendment Objection Plaintiff s attorneys may object that this discovery as irrelevant, or violating the discovery violates their client s Fifth Amendment rights. As to the relevancy argument, this discovery is proper unless the plaintiff can demonstrate that his lawful status in this country has been previously adjudicated in some INS proceeding. As to the Fifth Amendment argument, this is simply incorrect. In Metalworking Machinery, the court addressed this argument in a writ petition and squarely rejected it, observing that deportation proceedings are civil, not criminal, proceedings. Another important way to gather information is by subpoenaing from the plaintiff s past employers his personnel files, including his I-9 forms. This may also elicit relevancy, privacy and related objections, but if the requests are limited to the I-9 forms and supporting documents, then these objections should fail. The I-9 forms are the forms that all persons are required to complete demonstrating their ability to work legally in this country. Since the Immigration Reform Control Act was passed in 1986, employers are required to obtain supporting documentation and retain copies of such documents. It is not at all unusual for a plaintiff to have supplied conflicting documentation to different employees over time, or to have simply submitted falsified documents. Continued on page 26 Fall 2007 Defense Comment 25

46 Wage Loss Claims continued from page 25 Help From An Immigration Lawyer Immigration law is a complicated subject, and full of unique terminology, definitions and classifications. For example, there are many aliens residing and working in the United States who are here lawfully, working under Permanent Non-resident Status (PNR) with every expectation of remaining here lawfully in the future. In addition to PNRs, there are lawful non-immigrants (such as academics or professional on special work visas), refugees/asylumees, and types of persons applying for PNR status, just to name some. There are also at least half a dozen ways a person can immigrate permanently into the Unites States. An immigration lawyer can help you draft the written discovery, and explain the meaning of whatever documents are provided by the plaintiff. Immigration lawyers are excellent sources not only of immigration law, but in identifying forged or suspicious documents, based on their training. A second advantage to consulting with an immigration attorney is to able to designate that attorney as an expert witness, and to present his testimony at an Evidence Code 402 hearing as part of the motion in limine. Some judges may resist this idea on the basis that an expert witness should not be allowed to testify about the law. But the expert s role in this case is not simply to testify about the law, but to assist the court in determining if the plaintiff is subject to removal. This is a question of law, but deportability often turns upon a variety of facts, many of which are far beyond the knowledge of civil lawyers, or civil trial judges. There are more than 30 classes and subclasses of removable aliens. (8 U.S.C. 1227). A common argument is that while the plaintiff is not a U.S. citizen and has made little or no effort to obtain either citizenship or PNR status in this country, there is some familial reason why he is not subject to removal. This may involve a marital relationship or, more likely, the fact that he has fathered children who were born here and therefore are legal U.S. citizens. But, as immigration lawyers know, the mere fact that the plaintiff is the father 26 Defense Comment Fall 2007 (or mother) of such children does not itself prevent removal. Immigration statutes and decisions require a much higher showing of exceptional and unusual hardship to defeat removal. Curing Removable Status Once the defense meets its burden of showing that the plaintiff is subject to removal, the burden shifts to the plaintiff to demonstrate that he has taken steps to correct his removable condition. Often, there is little or no evidence offered to meet this standard. Instead, the plaintiff s lawyer will argue that plaintiff is in the process of doing something. (This is also where any immigration lawyer can help explain to the trial judge that something is or is not relevant to actually achieving a safe harbor.) The obvious reply to this argument lacking in evidence is to remind the trial judge that the plaintiff has been living in this country for many years and has done nothing to cure the problem. It is only now, when the defendant raised the issue, and when it poses an impediment to recovery of damages under the U.S. wage scales, that any attention has been paid to the issue. This suggests a certain lack of good faith/ unclean hands in many situations. Even when the plaintiff presents evidence of some activity to cure his status, this is where having an immigration lawyer to explain to the trial judge what has occurred, if the steps taken are meaningful or not, and what the likelihood is that the steps taken will cure his removable status. Before trial, a defendant should seek in discovery the production of any petition or other papers filed with the INS seeking to cure removable status. Courts have held that if the plaintiff has not yet filed a petition, or merely hired an immigration lawyer, then that is no evidence that he has taken steps which will cure his deportable condition. 4 The plaintiff may have taken appropriate action to prevent removal. There are numerous ways to try to prevent removal, including a process known as cancellation of removal. (8 U.S.C. 1229b.) The cancellation of removal statute is a very fertile ground for discovery by the defendant. For example, if a person seeks to cancel their removable status under this statute, they must meet a four prong test. Among the factors is whether the alien has been physically present in the United States for a continuous period of not less than 10 years immediately preceding the date of such application. Another element of the test is whether the alien has been a person of good moral character during such time period. Finally, if the plaintiff is asserting a family hardship if he was removed, this statute requires that removal would result in exceptional and extremely unusual hardship to the alien s spouse, parent or child. Accordingly, a great deal of information becomes relevant in discovery that might otherwise be irrelevant. For example, false I-9 documents signed by the plaintiff to obtain work may constitute evidence of lack of good moral character (as well as perjury). The Defendant s Wage Loss Analysis The second defense goal is the development of the plaintiff s future wage loss assuming that the plaintiff can no longer live and work in the United States. You may ask, why would a defendant undertake that task when it is the plaintiff s burden to prove damages? It is impossible to predict how the trial court will rule on the pre-trial motion Continued on page 27

47 Wage Loss Claims continued from page 26 to exclude United States wage loss calculations. The defendant can not wait until trial to prepare this damages defense, though it may decide at trial not to present it. The defendant needs to prepare for trial by utilizing two different scenarios the first, a future wage claim based upon U.S. wages, and the second, a future wage claim based on the plaintiff s country of citizenship. Preparation of the damages defense under the first scenario is what we do regularly; however, devising the damages defense under the second scenario takes extra time and special thought. One of the first challenges is finding a vocational rehabilitation consultant familiar with the occupational opportunities and wage scales of the foreign country involved. Especially when dealing with plaintiffs subject to removal to Mexico, there are a handful of consultants with special expertise in developing self-employment plans for these persons if they returned to Mexico. Familial work history, businesses and the like are also an important basis for formulating future employment plans, based on the plaintiff s education, qualifications and other circumstances. Attention to gathering the information needed to formulate such opinions is critical in discovery. There is no absolute right under the discovery statutes for the defendant to have its vocational rehabilitation consultant test or interview the plaintiff, to determine their employability. With some foresight, however, a great deal of information can be gathered at the plaintiff s deposition. Important questions include: 1. Do you speak or read English; if so, how fluently? 2. What languages do you speak or read? 3. What is your level of education, and does it include any technical training? 4. Where did you grow up, including the specific town or region of the country and its population? 5. Do you have family (especially brothers or sisters) working in your country of citizenship; if so, what do they do for a living? 6. Does anyone in your family own any property, or own any business? 7. Can you drive a truck, commercial vehicle or operate any equipment? This is but a small sampling of the kind of discovery that should be done in order to provide the vocational consultant with enough information to proceed. It is often the case that whether legally entitled to vocational rehabilitation or not, the plaintiff has a pending worker s compensation claim and has been worked up in that matter. These vocational rehabilitation reports also should be obtained and often provide valuable information about the plaintiff s abilities, testing, and potential work scenarios. Ultimately, as with any damages defense, the opinions of your vocational rehabilitation consultant will form the foundation for an economist to then calculate the plaintiff s future wage loss, assuming he was returned to his country of citizenship. Look to retain an economist with some experience with foreign wage scales, and anticipated rates of inflation in that country (in order to reduce to present value), and, finally with experience currency conversion, so that the economist s opinions can be explained to the jury in U.S. dollars. (Endnotes) 1 Plaintiff s past wage loss claims are not implicated because there was no removal as of the trial. 2 Future gender references are to the male for ease of reading only. 3 Summary adjudication, at must, identifies types of damages that are recoverable, not how future wage loss is to be calculated. 4 For further discussion of this, an unpublished opinion to read is Gilharry-Jones v. DeSouza 2002 WL Fall 2007 Defense Comment 27

48 Use and Misuse of Historic Building Codes for Injury Trip and Fall Claims By Lonnie Haughton, Richard Avelar & Associates A fundament of modern building codes is a constraint that a building s construction generally need only comply with the code requirements in effect on the date the original building permit was issued or the later date that the particular portion of the building last was repaired or reconstructed. At recently constructed buildings, this principle may or may not be a key consideration for analyses of construction defects claims, but it always is a critical part of the validation review of an injury trip and fall claim that alleges code violation(s) at an older building. The reviewer first must identify which model building code, if any, was the template for the local or state building code that was in effect when the building was constructed (or last repaired or reconstructed). Like any other model law, a model building code has no force until a particular edition of the model had been enabled by the controlling jurisdiction; therefore, the other top priority for the reviewer is to determine the effective date of such enabling legislation, if any. Historic editions of the model Uniform Building Code (first published in 1927 by the Pacific Coast Building Officials, later the International Conference of Building Officials) contained safety-oriented dimensional requirements for stairways, 28 Defense Comment Fall 2007 steps, landings, porches, balconies, handrails and open guardrails not found in other building codes of the pre-world War II era; however, it is important to note that many jurisdictions throughout California and Nevada did not adopt the UBC model until the late 1940 s, or even later. Further, even a f ter v irtua l ly a l l municipalities in the western states eventually have made the transition to the Uniform Building Code model, these events are not conclusive evidence, in and of themselves, that each jurisdiction then adopted every subsequent edition of the UBC model. This issue often is not understood (or perhaps is simply ignored) by some code professionals, resulting in gross misrepresentations (whether intentional or unintentional) within their analyses of liability for injury trip and fall claims at older buildings. Consider, for example, the Table below listing the past editions of the UBC model (and their effective dates) that were adopted by the California cities of San Jose and Oakland. Note that the first UBC model ever adopted by Oakland s municipal authorities was the 1946 edition; therefore, a claimant s expert for an alleged injury incident at a low balcony guardrail that was constructed (and last repaired or reconstructed) in Oakland prior to November 25, 1948 cannot legitimately cite the stringent guardrail height requirements of UBC Section 3501 (which dates to the 1927 edition) to support the claim. In other words, prior to late-1948 the controlling construction codes within the City of Oakland had no provisions for minimum height of balcony guardrails. In contrast, if the same incident had occurred at an identical building in San Jose, then the expert s citation of UBC Section 3501 may be legitimate. In practice, for comparable injury claims at older buildings in California and Nevada, many claimant experts often will simply cite the strict requirements of the early UBC models to support their positions burdening the defense with the perhaps daunting task of historical research to validate (or refute) the experts findings. Continued on page 29

49 Injury Trip and Fall Claims continued from page 28 UBC City of San Jose Effective City of Oakland Effective 1927 Yes 10/11/ Yes 02/24/ Yes 06/24/1946 Yes 11/15/ Yes 07/06/ Yes 11/27/ Yes 12/19/ Yes 01/03/ Yes 12/02/ Yes 08/10/ Yes 12/2/1971 Yes 08/16/ Yes 02/03/1975 Yes 02/22/ Yes 08/18/1978 Yes 06/16/ Yes 05/08/1981 Yes 02/06/ Yes 09/15/ Yes 02/01/ Yes 01/01/1990 Yes 02/01/ Yes 08/14/1992 Yes 07/22/ Yes 12/28/1995 Yes 12/05/ Yes 07/01/1999 Yes 07/01/1999 Uniform Building Code Chronology for the City of San Jose 1 and the City of Oakland 2 As an example, now consider the following key revision to Section 1711 of the 1982 edition of the UBC model: Open guardrails and stair railings shall have intermediate rails or an ornamental pattern such that a sphere 6 inches in diameter cannot pass through. The 1982 model UBC reduced the maximum spacing of guardrail balusters and stair railings from 9 inches 3 to 6 inches. 4 Using the historical Table above, we can evaluate the legitimacy of an expert s use of the 1982 UBC model to support litigation alleging building code violations at a restaurant stairway constructed in 1986 at which a small child fell through railings spaced 7 inches apart. Upon review, we find that such 7 inches rail spacing is codecompliant if the restaurant was constructed in San Jose, but not code-compliant for a comparable Oakland restaurant. A failure by a claimant s code expert to acknowledge that the 1982 UBC model was not adopted by the San Jose authorities may simply be the result of inadequate expertise. For another example, consider that the 1958 edition of the UBC model was the first to require the inclusion of landings at stairways constructed at one- and two-family dwellings; 5 however, upon review of the Table above, we find that this requirement did not become not effective in either city until Again, the potentially lengthy period of time between the issuance of a past edition of the UBC model and the enactment of enabling legislation by a local jurisdiction for this particular edition can become a critical (but often overlooked, or perhaps simply ignored) aspect of future injury claims. The Role of the State Another key consideration in the historical review process is the role of the state. The western states have followed different paths toward local enforcement of the model Uniform Building Code (and its current successor, the model International Building Code), ranging from the handsoff attitude of the Nevada legislature to the extensive authority granted to the California Building Standards Commission by the state legislature: Section of the Nevada Revised Statutes (NRS) requires: Work m a n sh ip w h ich i s not commensurate with standards of the trade in general or which is below the standards in the building or construction codes adopted by the city or county in which the work is performed. If no applicable building or construction code has been adopted locally, then workmanship must meet the standards prescribed in the Uniform Building Code, Uniform Plumbing Code or National Electrical Code in the form of the code most recently approved by the Board. In short, the State of Nevada allows local jurisdictions to adopt their own building codes and only mandates conformance with the model Uniform Building Code when no local building code has been enabled. 6 In contrast, Section of California s Health and Safety Code (HSC) requires local jurisdictions to adopt the most current version of the state building code 7 within 180 days of its publication by the California Building Standards Commission pursuant to the requirements of HSC Section Since November 23, 1970, the only building code authority granted to California s local governments is the limited ability to impose individual code requirements that are stricter than comparable state requirements. Clearly, a top priority for an historical code review process for an injury trip and fall claim in Nevada is to identify the scope Continued on page 30 Fall 2007 Defense Comment 29

50 Injury Trip and Fall Claims continued from page 29 (and effective dates) of the building codes enforced by the local jurisdiction. For a similar California claim, the priority review process also can entail additional exhaustive historical analysis of the 1923 State Housing Act (which primarily addressed hotels and apartment houses constructed prior to 1961); HSC Section (for buildings constructed since 1961); HSC Section (for buildings constructed since 1970); HSC Section (for buildings constructed since 1979); and other key HSC Sections. Recommendations for the Defense Team Be skeptical: Many experts have gained their code knowledge during the design phase of new construction or via their professional efforts to promote or defend construction defects claims, which typically are filed within the first 10 years of a building s initial occupancy. Even if these design and engineering professionals have backgrounds that include decades of construction codes experience, their current knowledge of the historic intricacies of past legislative actions and long-forgotten local ordinances likely is minimal. The general depth and breadth of their expertise should be tested. Require verification: When a claim for monetary damages is based upon an alleged violation perhaps decades earlier of a particular historic building code, it is not unreasonable to require the claimant s code expert to provide proofs that this code was in effect when the original building permit was issued (or the latest date of repair or reconstruction of the suspect building component). Seldom should any expert s unverified claim be accepted solely due to his/her good reputation, impressive credentials or earnest sincerity. Do not readily accept an expert s response that the precise code adoption history of a particular town or city cannot be ascertained without extraordinary effort. In this Google search engine era, such code chronologies (or perhaps historical ordinance lists or ordinance tables for California and Nevada municipalities) may be just a few mouse clicks away. 8 Similarly, the intricate twists & turns of past state legislation addressing building codes can be traced with particular volumes of Michie s Nevada Revised Statutes Annotated and Deering s California Codes Annotated and West s Annotated California Codes. 9 Seek impartial review by a qualified professional: The above building code chronologies for the neighboring cities of Oakland and San Jose graphically demonstrate the lack of historical uniformity in past adoptions of the model Uniform Building Code by individual jurisdictions in California and Nevada. 10 Evidence of such disparities potentially can make or break an injury claim that alleges building code violations at old stairways, landings, steps, handrails, open guardrails, porches, balconies, doors and windows; therefore, unless claimant s expert has provided specific proofs of the local applicability and effective date of the referenced UBC model, an impartial review by a qualified professional likely is warranted. Again, the general depth and breadth of this professional s expertise also should be tested. Lonnie Haughton is a Codes & Standards Consultant for Richard Avelar & Associates, a forensic architectural consulting firm based in Oakland, CA. His CV and copies of his published articles can be downloaded at: www. mastercodeprofessional.com. (Endnotes) 1 Source: PDFHandouts/CodeHistory.pdf. 2 Source: Jim Oakley of the City of Oakland Building Services Department. 3 The maximum 9 spacing for open rails dates to the 1961 edition of the UBC model. 4 The 1991 edition of the UBC model reduced the maximum 6 spacing of open rails to 4. 5 In contrast, UBC requirements for stairway landings at buildings with three or more dwelling units date to the 1927 edition. 6 Note that Section was added to the NRS in 1969 further research of the State s legislative history is recommended for the Nevada reviewer. 7 The current 2001 edition of the California Building Code is based upon the 1997 edition of the UBC model; however, the newly issued 2007 California Building Code, which becomes effective on January 1, 2008, is based upon the 2006 edition of the model International Building Code 8 For example, a Google search for Clark County, NV easily locates an ordinance list that shows the 1967 edition of the Uniform Building Code was adopted by Ordinance #277, which was later repealed by Ordinance # For his expanding building code library, this writer seeks to purchase all past editions of Volume 40 (covering HSC Sections to 25099) of West s Annotated California Codes. 10 A recent notable exception to this general lack of uniformity is the joint publication by Clark County and the cities of Las Vegas, North Las Vegas, Mesquite, Henderson and Boulder City of the Southern Nevada Building Code, the successor of the Building Code of Clark County. 30 Defense Comment Fall 2007

51 THE 1986 CALIFORNIA DISCOVERY ACT Is It Working? By Katherine Gallo, Discovery Referee July 1, 2007 marked the 20th anniversary of the effective date of the 1986 Discovery Act ( Act ). The Act was intended to codify then-current case law and statutes as well as curb perceived abuses in the discovery process. This legislation dramatically changed the practice of law in the civil arena. In the last two decades, discovery has assumed increasing importance in litigation and with that importance came sky rocketing costs. Lawyers and judges now dread wading into the morass of pre-trial discovery. With 20 years of experience with the Act under our belts, I ask the question: Is the 1986 Discovery Act working or does it need another overhaul? The 1986 Civil Discovery Act is an amazing piece of legislation it giveth and taketh. Although it is self-executing, it depends on the professionalism and ethics of counsel. It allows for liberal exchange of information, but there are restrictions to curb abuse. It s got teeth, but the courts must affirmatively exercise their power to for the Act s sanctions to be effective. The basic purpose of the Act was to take the game element out of trial preparation by enabling the parties to obtain evidence necessary to evaluate and resolve their dispute beforehand. Weil and Brown, Cal Prac. Guide: Civil Procedure Before Trial (TRG 2006) 8:1. Unfortunately, now it appears the call of the wild is Let the games begin as the dreaded process unfolds. Counsel and the court have the ability to stop this madness by rethinking the way they perceive discovery and how discovery disputes can be handled. 1. Do You Have a Discovery Plan? As a discovery referee, I normally come into cases when there already is a problem. Either discovery in the case is out of control, or the antagonism among counsel is so great that the Law and Motion Judge is done dealing with the parties. In many instances, I see an all out war between counsel with discovery being used as a weapon. There is no rhyme or reason to the 105 special interrogatories that were served, the 200 categories of documents being demanded or the 20 depositions that have been noticed. The meet and confer process has broken down into a rampage of insults. Yet nobody has bothered asking the demanding party the fundamental question Why do you need this? When that question is finally posed by me, too frequently that counsel cannot answer the question. In such circumstances, it is clear to me that the attorneys have no idea where they are taking the case, no plan of attack and no idea what they are trying to accomplish. In other words no discovery plan. It is at the beginning of a case that you need to plan your litigation strategy. Before you propound discovery you need to go through three steps. First, you need to determine your goal: Are you obtaining discovery to evaluate the case for mediation, to file a motion for summary judgment/adjudication, or to prepare for trial? Each goal has a different strategy and certain discovery devices are better suited for each goal. In evaluating the case for mediation, form interrogatories, a preliminary set of requests for production of documents and an informal exchange of information between the parties may be all you need. If you are going to trial, you are going to need admissible evidence, so the formal exchange of information with verification and authentication is going to be necessary as well as testimony under oath. The discovery is going to have to be even more pinpointed if you are planning to file a motion for summary judgment/ adjudication. The evidence is going to have to be verified, authenticated and uncontroverted. You are going to have to make sure that any declaration being filed by the opposition will not create a triable issue of material fact. The discovery devices most effective to elicit motionready responses that can be attached to your MSJ are requests for admissions and depositions. Requests for admissions allow no wiggle room. Also, you can use them to have the opposing party authenticate Continued on page 32 Fall 2007 Defense Comment 31

52 The 1986 Discovery Act continued from page 31 documents you will need to make or oppose your MSJ, or for trial C.C.P Depositions allow you to nail down the testimony and a declarant s subsequent declaration attempting to disavow his uncorrected deposition testimony will not defeat the motion. D Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21. Second, you need to determine the essential elements of each of the causes of action and the evidence you need to prove or defeat that cause of action. Finally, you need to determine what discovery device is best suited to obtain the evidence to achieve your goal. After this three-step analysis, serve your discovery. 2. Are You Proactive or Reactive? I see many lawyers just reacting to the litigation versus taking control of the litigation. This is most evident in the way lawyers handle discovery. Below are a few examples: In most cases, it seems that one side goes on the offense and propounds a slew of written discovery and deposition notices and the other side goes on the defense. It usually is the plaintiff that goes on the offense and then the defense then reacts. It may take months if not years for the defense to then become proactive. This is a role that the parties assume, not one that the Code requires. There is no priority in discovery. C.C.P Both sides need to be proactive and implement their discovery plan. Another failing of lawyers is the standard junk objections to written discovery and the meet and confer process thereafter. The Act requires the parties to make a reasonable and good faith attempt to informally resolve their discovery disputes prior to filing a motion. The intent of the meet and confer requirement is to force the lawyers to reexamine their positions and narrow their disputes before bringing the matter to the court. The Act expects that the parties will be professional and will work out most of their differences. But this isn t what is happening. Written responses full of objections with little or no substantive information put the propounding party into a reactive or retaliatory mode. After receiving the non-responses, the propounding party then fires off a give me my discovery or else letter and the battle begins. The problem is that the dispute isn t limited to just this discovery motion. It sets the tenor for the entire case and every deposition and every request for discovery becomes a battleground. The hostilities from the discovery disputes permeate into counsel s mind set and it becomes difficult to resolve the entire case. It is important to break this cycle of abuse. Junk objections (vague and ambiguous; over broad and burdensome; irrelevant and not Continued on page Defense Comment Fall 2007

53 The 1986 Discovery Act continued from page 32 likely to lead to admissible evidence, work product; attorney client privilege; calls for an expert opinion when experts have not yet been disclosed) are very rarely sustained when they are ruled on by the court. So why serve them? Second, be professional. Pick up the phone and try to work something out. Better yet, agree to meet in person to try and work it out. Third, consider mediating your discovery dispute by stipulating to the appointment of a discovery referee for the limited purpose of working with you on the pending dispute. 3. Are Stipulations Part of Your Discovery Plan? A useful tool that is too often overlooked is stipulations. Discovery is a very expensive process, especially in complex cases. But there are ways to streamline the process and be cost effective. One is to agree on service. Agree to service by fax. C.C.P. 1013(e) and (f) 1 Get everyone s address and agree to correspond by . Better yet, agree to accept service of all pleadings and other documents except for motions. 2 As for motions, consider agreeing that the moving party only need serve the full moving papers on the party to which the motion is being directed to. All other parties are served with the notice of motion only with the option of requesting a full set of moving papers. 3 This procedure, commonly used in Asbestos litigation, saves hundreds if not thousands of dollars on copying costs and service charges in multiparty litigation. Prior to the commencement of discovery, meet and confer with opposing counsel to agree on a discovery time line (i.e., exchange of documents within 90 days, written discovery commences on Day 91, depositions commences on Day 150). If the case involves the exchange of sensitive information (i.e., privacy or trade secret materials), agree to a protective order before you commence discovery. If you need a neutral third party to help with all this, consider stipulating to a discovery referee to case manage your case and to rule on any discovery disputes that may arise. If the case is document intensive, agree on a document depository and a document handling and processing protocol. Come into the electronic age require the documents be scanned (OCR) so that you and your experts can do more efficient and effective searches. Consider using document companies that will make the depository internet-accessible. These services allow you to decide which parties have access to which documents. Such a feature gives you, anyone in your office and your experts access to the documents 24/7 and you are not hunting around for the CDS. Also, consider agreeing on an early disclosure of experts. Many complex cases are ones in which evidence from experts will determine the outcome of the case. An early disclosure will enable the parties to evaluate their case for settlement, and prepare for trial. There is nothing or beneficial or cost-effective to your case when you are double- tracking depositions up to and during trial. If you cannot get the stipulations you need, then turn to the court. It is the court s Continued on page 34 Fall 2007 Defense Comment 33

54 The 1986 Discovery Act continued from page 33 responsibility to manage complex cases. See Judicial Administration Standard Do You File Discovery Motions? I often hear from litigators I have never used a discovery referee because I don t file discovery motions. I find that statement incredible, but not because I don t believe them. Instead, I am wondering whether the other side fears them so much that they roll over and give them everything requested or they are the type of lawyer who doesn t like to make waves. If it is the latter, this attitude and perception can be detrimental to your client, as well as to the adjudicative process As mentioned before, the purpose of discovery is to obtain information to determine the good, the bad and the ugly of your case so you can do your evaluation and come to a resolution prior to trial. Not obtaining the information delays the process and has a negative ripple effect. For example, if you can t get the names of the witnesses, you can t depose them. If you can t get the name of the medical treaters, you can t subpoena the medical records and you can t schedule the IME. If you don t know what the construction defect claims are, you can t determine whether or not the defects fall within your scope of 34 Defense Comment Fall 2007 work, you can t schedule the site inspection, and you can t hire your expert to be at that site inspection. The delay then affects the trial date. Judges are becoming very unsympathetic to requests to continue trial dates when they determine that counsel has been sitting on the file and not initiating and completing discovery. Claims of I didn t get the information I need to go to trial falls on deaf ears when the judge notes that no discovery motions have been filed and the case is three years old. Filing motions curbs discovery abuse. If a party fails to comply with your discovery requests and you do nothing, that party is going to continue to stonewall you. Taking it on the chin isn t helping your client. You need to bring the motion and start establishing a pattern of opposing counsel s discovery abuse. No court is going to impose a terminating sanction unless a history of lesser sanctions have first been imposed or prior discovery orders have been violated. See Weil and Brown, California Practice Guide: Civil Procedure Before Trial (TRG 2006) 8:1215 et seq. The court also needs to take discovery motions seriously. Discovery motions can be as dispositive as motions for summary judgment or summary adjudication. An order to produce documents or an order to compel attendance at a deposition many times become a turning point in a case that drives a party to the table to negotiate a settlement. Courts also need to impose monetary sanctions on anyone engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorneys fees incurred by anyone as a result of that conduct. C.C.P (a) emphasis added. Many lawyers are hesitant to file discovery motions because they are expensive to prepare and they assume that they will not be awarded sanctions. Motions to compel further responses that require lengthy CRC 335 statements can costs thousands of dollars to prepare. Yet, the requests for sanctions are either denied outright or only a small fraction of the amount requested is awarded. Courts need to use sanctions as the hammer that they were intended to be. 4 Parties knowing that the court will impose all of opposing counsel s reasonable expenses, including attorneys fees will be less likely to play games during discovery. 5. The Needed Tweaks to the Act There are needed tweaks to the Discovery Act. C.C.P et seq. has no relief provision when a party fails to respond to requests for admissions. The Court of Appeal in the case of St. Paul Fire & Marine Insurance Co. v. Superior Court (Advalloy, Inc.) (1992) 2 Cal.4th 843, found that C.C.P. 473 does not apply as C.C.P supercedes it. If this what the legislature intended, then the statute should be amended to make that intent clear. Disclosing experts 50 days before trial can be a logistical nightmare. Presently, the Act only allows a 25-day window within which to take expert depositions. This doesn t work in multiparty complex cases where there can be dozens of experts. The problems encountered include the finite number of days to take the experts depositions, the experts availability, and the jockeying of the parties in having their expert being the last to be deposed. The Act should be amended to require Continued on page 35

55 The 1986 Discovery Act continued from page 34 expert disclosure 90 days before trial in multiparty or complex cases. Also, the parties should be required to state in the expert declaration all available dates the expert is available for deposition. The final tweak concerns documents requested to be produced for deposition. Presently there is no requirement that a party provide a privilege log for any document withheld. The C.C.P should be so modified so the deponent party has the same obligations to provide a privilege log as if he had been served with a document request pursuant to C.C.P et seq. Conclusion So, is the 1986 Civil Discovery Act really working as the framers intended? The answer is YES. The structure is there. However, it is up to the lawyers and the courts to make the structure work. (Endnotes) 1 Example of text of agreement: Facsimile Service: Service by fax is allowed pursuant to C.C.P. Section1013(e) and (f) but is modified as follows: A. Service by facsimile shall not be allowed for any motion/paper greater than 50 pages (including exhibits); such papers must be served by another means allowed by the Code of Civil Procedure, California Rules of Court, and/or local rules. 2 Example of text of agreement: Service: The parties have agreed that there shall be service via e- mail except for those documents involving those that are being filed with the court. All s shall have the following format: Subject line: Name of case, subject matter of Body of Name of each attachment. Who the attachment is directed to. 3 Example of text of agreement: Service of Motion Papers: The parties have agreed that service of any motion papers must be in compliance with the Code of Civil Procedure as to the party the motion is being directed to as well as the court. Any party to which the motion is not directed to, the moving party shall serve via fax (1) the notice of the motion, and (2) a letter advising counsel that they can request a courtesy copy of the motion by signing the letter, requesting service of a copy of the full moving papers, and serving the request on all parties. Courtesy copy of the moving papers shall be sent via hand delivery, fax service, overnight service or U.S. Mail within five (5) court days [of receipt of the request]. If any party requests opposition papers and/or reply papers, those papers are to be sent to the requesting party via hand delivery, fax service, overnight service or U.S. Mail within five (5) court days [of receipt of the request]. 4 Discovery sanctions are not reported to the State Bar. See Bus. & Prof. C. 6068(o)(3). Fall 2007 Defense Comment 35

56 Tip of the Cap ADC salutes and congratulates its Nevada members who were named as Nevada Super Lawyers. The goal of the Super Lawyers program is to select the top five percent (5%) of Nevada attorneys in more than 60 practice areas. Selection is based on a survey of more than 4,000 attorneys across the state as well as independent research. This year s Nevada honorees are: Jack G. Angaran Georgeson Angaran, Chtd. Reno, NV Defense Thomas P. Beko Erickson, Thorpe & Swainston, Ltd. Reno, NV Practice Area: Employment Litigation Defense C. James Georgeson Georgeson Angaran, Chtd. Reno, NV Practice Area: Personal Injury Defense Stephen S. Kent Woodburn & Wedge Reno, NV Practice Area: Personal Injury Defense; General Litigation Albert F. Pagni Jones Vargas Reno, NV Practice Area: Medical Malpractice Defense Eugene J. Wait Wait Law Firm Reno, NV Practice Area: Medical Malpractice Defense; Personal Injury Defense ADC salutes and congratulates its Northern California members who were named as Super Lawyers. Only five percent (5%) of the total lawyers in Northern California are selected. Selection is based on a survey of more than 52,000 attorneys across the Northern California as well as independent research. Dominica C. Anderson Duane Morris LLP San Francisco Practice Area: Insurance Coverage Ann Asiano Bradley Curley Asiano Barrabee & Crawford Larkspur, CA Jonathan C. Bacon Archer Norris Walnut Creek, CA Practice Area: Construction Litigation Gregory A. Bastian Murphy, Pearson, Bradley & Feeney Sacramento, CA Practice Area: Professional Liability 36 Defense Comment Fall 2007 Patrick J. Beasley Maire & Beasley Redding, CA Practice Area: Personal Injury Defense General Thomas G. Beatty McNamara, Dodge, Ney, Beatty, Slattery, Pfalzer, Borges & Brothers Walnut Creek, CA Christopher J. Beeman Clapp, Moroney, Bellagamba & Vucinich Pleasanton, CA Robert A. Bellagamba Clapp, Moroney, Bellagamba & Vucinich Pleasanton, CA Practice Area: Construction Litigation Mario L. Beltramo McCormick, Barstow, Sheppard, Wayte & Carruth Fresno, CA Practice Area: Personal Injury Defense Medical Malpractice Raymond J. Bergez Filice, Brown, Eassa & McLeod LLP Oakland, CA Jean L. Bertrand Schiff Hardin San Francisco, CA Michael A. Bishop Matheny, Sears, Linkert & Long Sacramento, CA Practice Area: Employment & Labor Debra F. Bogaards Pave & Bogaards San Francisco, CA Mark G. Bonino Hayes, Davis, Bonino, Ellingson, McLay & Scott Redwood City, CA Practice Area: Appellate Continued on page 37

57 Tip of the Cap continued from page 36 Guy D. Borges McNamara, Dodge, Ney, Beatty, Slattery, Pfalzer, Borges & Brothers Walnut Creek, CA Practice Area: Personal Injury Defense General Frederick Rick W. Bradley Bradley Curley Asiano Barrabee & Crawford Larkspur, CA Practice Area: Professional Liability Michael J. Brady Ropers, Majeski, Kohn & Bentley Redwood City, CA Practice Area: Appellate Paul A. Brisso Mitchell, Brisso, Delaney & Vrieze Eureka, CA James J. Brosnahan Morrison & Foerster San Francisco, CA Eugene Brown, Jr. Filice, Brown, Eassa & McLeod LLP Oakland, CA John Quincy Brown III Hardy, Erich, Brown & Wilson Sacramento, CA Practice Area: Personal Injury Defense Medical Malpractice John R. Brydon Brydon Hugo & Parker San Francisco, CA Lowell T. Carruth McCormick, Barstow, Sheppard, Wayte & Carruth Fresno, CA Practice Area: Business Litigation Dion N. Caminos Gordon & Rees San Francisco, CA Arthur W. Curley Bradley Curley Asiano Barrabee & Crawford Larkspur, CA Practice Area: Professional Liability David A. Depolo Donnelly Nelson Depolo & Murray LLP Walnut Creek, CA Practice Area: Personal Injury Defense Medical Malpractice Michael G. Descalso Greene, Chauvel, Descalso & Minoletti San Mateo, CA John M. Drath Drath, Clifford, Murphy & Hagen Oakland, CA Practice Area: Professional Liability Kevin J. Dunne Sedgwick, Detert, Moran & Arnold LLP San Francisco, CA Practice Area: Class Action/Mass Torts; Products Liability Robert D. Eassa Filice, Brown, Eassa & McLeod LLP Oakland, CA Practice Area: Employment & Labor Mark E. Ellis Ellis, Coleman, Poirier Lavoie & Steinheimer Sacramento, CA Practice Area: Professional Liability James D. Emerson Emerson, Corey & Sorenson Fresno, CA Practice Area: Personal Injury Defense General Martin J. Everson Galloway, Lucchese, Everson & Picchi Walnut Creek, CA Practice Area: Personal Injury Defense Medical Malpractice Joseph H. Fagundes Cassel Malm Fagundes LLP Stockton, CA Gennaro A. Filice III Filice, Brown, Eassa & McLeod LLP Oakland, CA Donald R. Fischbach Baker Manock & Jensen Fresno, CA Stephen J. Foley Foley & Mansfield Walnut Creek, CA Practice Area: Personal Injury Defense Products Thomas E. Fraysee Knox Ricksen LLP Oakland, CA Practice Area: General Litigation Jack T. Friedman Carroll Burdick & McDonough Walnut Creek, CA Practice Area: Business Litigation G. Patrick Galloway Galloway, Lucchese, Everson & Picchi Walnut Creek, CA Joseph C. Gharrity Hassard Bonnington San Francisco, CA Practice Area: Professional Liability John S. Gilmore Randolph, Cregger & Chalfant LLP Sacramento, CA Practice Area: Personal Injury Defense Medical Malpractice Karen M. Goodman Goodman & Associates Sacramento, CA Thomas N. Griffin Grunsky, Ebey, Farrar & Howell Watsonville, CA Practice Area: Business Litigation Duane Grummer Lynch, Gilardi & Grummer San Francisco, CA Practice Area: Construction/Surety Steven H. Gurnee Gurnee & Daniels Roseville, CA Patrick Hagan Dillingham & Murphy San Francisco, CA Peter M. Hart Wright, Robinson, Osthimer & Tatum San Francisco, CA Practice Area: Personal Injury Defense General Stephen M. Hayes Hayes, Davis, Bonino, Ellingson, McLay & Scott Redwood City, CA James L. Hazard Seller, Hazard, Manning, Ficenec & Lai Practice Area: ADR Michael F. Healy Sedgwick, Detert, Moran & Arnold LLP San Francisco, CA Continued on page 38 Fall 2007 Defense Comment 37

58 Tip of the Cap continued from page 37 David S. Henningsen Robinson & Wood San Jose, CA Practice Area: Construction Litigation Randolph S. Hicks Coddington, Hicks & Danforth Redwood City, CA Practice Area: Insurance Coverage Charles H. Horn Wright, Robinson, Osthimer & Tatum San Francisco, CA Joseph C. Howard, Jr. Howard Rome Martin & Ridley LLP Redwood City, CA Mark G. Intrieri Chapman & Intrieri Alameda, CA Gary R. Johnson McNamara, Dodge, Ney, Beatty, Slattery, Pfalzer, Borges & Brothers Walnut Creek, CA Practice Area: ADR Stuart E. Jones Wright, Robinson, Osthimer & Tatum San Francisco, CA Practice Area: Construction Litigation Nicholas D. Kayhan Filice, Brown, Eassa & McLeod LLP Oakland, CA Frank P. Kelly III Shook, Hardy & Bacon San Francisco, CA Practice Area: General Litigation Lawrence E. Kern Kern, Noda, Devine & Segal San Francisco, CA P. Beach Kuhl Sedgwick, Detert, Moran & Arnold San Francisco, CA Practice Area: Personal Injury Defense General Betrand Le Blanc II Carroll, Burdick & McDonough San Francisco, CA David A. Levy Law Offices of David A. Levy Burlingame, CA 38 Defense Comment Fall 2007 Ralph A. Lombardi Lombardi, Loper & Conant LLP Oakland, CA Practice Area: Personal Injury Defense Medical Malpractice Bruce P. Loper Lombardi, Loper & Conant LLP Oakland, CA Practice Area: General Litigation R. Wardell Loveland Coddington, Hicks & Danforth Redwood City, CA David R. Lucchese Galloway, Lucchese, Everson & Picchi Walnut Creek, CA Practice Area: Personal Injury Defense Medical Malpractice Michael Lucey Gordon & Rees San Francisco, CA Practice Area: Labor & Employment David B. Lynch Low Ball & Lynch San Francisco, CA Practice Area: Personal Injury Defense Products Robert T. Lynch Lynch, Gilardi & Grummer San Francisco, CA Wayne H. Maire Maire & Beasley Redding, CA Julia A. Molander Sedgwick, Detert, Moran & Arnold San Francisco, CA Practice Area: Insurance Coverage Michael R. Mordaunt Riggio, Mordaunt & Kelly Stockton, CA Practice Area: Personal Injury Defense Medical Malpractice Dennis F. Moriarty Cesari, Werner & Moriarty San Francisco, CA Chester Morris Rich, Fuidge, Morris & Iverson Marysville, CA Practice Area: General Litigation Scott E. Murray Donnelly Nelson Depolo & Murray Walnut Creek, CA Practice Area: Personal Injury Defense Medical Malpractice James M. Nelson Donnelly Nelson Depolo & Murray Walnut Creek, CA Practice Area: Personal Injury Defense Medical Malpractice Jeffrey G. Nevin Ellis, Coleman, Poirier, Lavoie & Steinheimer Sacramento, CA Practice Area: General Litigation Michael J. Ney McNamara, Dodge, Ney, Beatty, Slattery, Pfalzer, Borges & Brothers Walnut Creek, CA Practice Area: ADR Christian B. Nielsen Robinson & Wood San Jose, CA Bruce G. Nye Adams Nye Sinunu Bruni Becht LLP San Francisco, CA Thomas A. Packer Gordon & Rees San Francisco, CA Practice Area: Personal Injury Defense Products Frank J. Pagliaro, Jr. Ropers, Majeski, Kohn & Bentley Redwood City, CA Practice Area: Construction/Surety Gordon M. Park McCormick, Barstow, Sheppard, Wayte & Carruth Fresno, CA Practice Area: Insurance Coverage James Parton III Lynch, Gilardi & Grummer San Francisco, CA Thomas E. Pfalzer McNamara, Dodge, Ney, Beatty, Slattery, Pfalzer, Borges & Brothers Walnut Creek, CA Practice Area: Personal Injury Defense Medical Malpractice Continued on page 39

59 Tip of the Cap continued from page 38 Gregory D. Pike Knox Ricksen LLP Oakland, CA Practice Area: General Litigation Susan M. Popik Chapman, Popik & White LLP San Francisco, CA Practice Area: Insurance Coverage Daniel F. Quinn Quinn & Kronlund Stockton, CA Practice Area: General Litigation Gregory C. Read Sedgwick, Detert, Moran & Arnold LLP San Francisco, CA Donald W. Rees Gordon & Rees San Francisco, CA Practice Area: Insurance Coverage Donald M. Riggio Riggio, Mordaunt & Kelly Stockton, CA Practice Area: Personal Injury Defense Medical Malpractice Chester A. Rogaski, Jr. Dunn, Rogaski, Preovolos, Weber & Patterson Vallejo, CA Practice Area: Personal Injury Defense General Jesse F. Ruiz Robinson & Wood San Jose, CA Bruce E. Salenko Low McKinley Baleria Sacramento, CA Practice Area: Personal Injury Defense Medical Malpractice Peter G. Samuelson Samuelson, Wilson & Roe San Jose, CA Practice Area: Personal Injury Defense General Roger M. Schrimp Damrell, Nelson, Schrimp, Pallios, Pacher & Silva Modesto, CA Practice Area: Business Litigation Leo H. Schuering Schuering, Zimmerman, Scully, Tweedy & Doyle LLP Sacramento, CA Practice Area: Personal Injury Defense General Douglas A. Sears Matheny, Sears, Linkert & Long Sacramento, CA Practice Area: General Litigation Michael D. Senneff Senneff Freeman & Bluestone Santa Rosa, CA Practice Area: Business Litigation James N. Sinunu Adams Nye Sinunu Bruni Becht LLP San Francisco, CA Robert M. Slattery McNamara, Dodge, Ney, Beatty, Slattery, Pfalzer, Borges & Brothers Walnut Creek, CA Practice Area: Personal Injury Defense General L. Christian Spieller Philip Andersen & Associates San Francisco, CA M. Max Steinheimer Downey Brand LLP Stockton, CA Practice Area: Construction Litigation David L. Strong Branson, Brinkop, Griffith & Strong Redwood City, CA Practice Area: Construction Litigation Alexander F. Stuart Willoughby, Stuart & Bening San Jose, CA Practice Area: Insurance Coverage Donald L. Sullivan Clapp, Moroney, Bellagamba & Vucinich San Bruno, CA Practice Area: Construction Litigation Clyde A. Thompson Haapla, Altura, Thompson & Abern, LLP Oakland, CA Jeffrey M. Vucinich Clapp, Moroney, Bellagamba & Vucinich Pleasanton, CA Practice Area: General Litigation James P. Wagoner McCormick, Barstow, Sheppard, Wayte & Carruth Fresno, CA Practice Area: Insurance Coverage Dennis J. Ward Ropers, Majeski, Kohn & Bentley Redwood City, CA Practice Area: Personal Injury Defense General James D. Weakley Weakley, Ratliff, Arendt & McGuire, LLP Fresno, CA Andrew R. Weiss Weiss, Martin, Salinas & Hearst Fresno, CA Practice Area: Personal Injury Defense Medical Malpractice Mark A. White Chapman, Popik & White San Francisco, CA Practice Area: Business Litigation Randall E. Willoughby Willoughby, Stuart & Bening San Jose, CA Practice Area: Insurance Coverage Jacquelyn K. Wilson Samuelson, Wilson & Roe San Jose, CA Practice Area: Insurance Coverage Robert H. Zimmerman Schuering, Zimmerman, Scully, Tweedy & Doyle LLP Sacramento, CA Practice Area: Personal Injury Defense Medical Malpractice Defense Comment wants to hear from you. Please send letters to the editor by to Stephen A Schram at [email protected] We reserve the right to edit letters chosen for publication. Fall 2007 Defense Comment 39

60 We recognize and salute the efforts of our members in the arena of litigation win, lose or draw. Compiled by Stephen A. Schram Sedgwick, Detert, Moran & Arnold, S.F. Custody and control of a public sidewalk in front of a San Francisco hotel was a key issue in a personal injury claim tried and successfully defended in San Francisco Superior Court by Jeffrey M. Vucinich (Clapp, Moroney, Bellagamba & Vucinich, San Bruno, CA). Plaintiff was a 67-year old retired professor who was walking near the foot of Market Street mid-afternoon on an August day in front of a large hotel where business and entertainment events are held. Plaintiff claimed that she was injured when she slipped on a piece of caution tape on the sidewalk adjacent to the hotel, allegedly left after a load out of a trade show at the hotel. Plaintiff s counsel argued the yellow caution tape was the type typically used to prevent visitors from entering the loading area. An eyewitness at trial confirmed the caution tape was in the area where Plaintiff fell. Mr. Vucinich represented the hotel. On behalf of his client, he filed a cross-complaint against the company who had hosted the trade show. Before trial, the cross-defendant settled with Plaintiff leaving the hotel as the sole defendant at trial. Defense counsel filed a motion in limine that resulted in dismissal of the Plaintiff s negligence per se cause of action leaving only a cause of action for negligent maintenance. At 40 Defense Comment Fall 2007 trial, Plaintiff claimed damages resulting from a fractured hip and resulting hip replacement surgery, and sought $100,000 in past medical costs and $450,000 in past and future pain and suffering damages. Defense counsel argued that the hotel had no control over the trade show host s activities on a public sidewalk and the hotel was not responsible for transient litter on an adjacent public sidewalk. After five days of trial, the jury deliberated for three hours before delivering a verdict for the defense. Arguing lack of causation, defense attorneys Daniel P. Costa and Erica L. Rosasco (The Costa Law Firm, Sacramento, CA) convinced a Shasta Superior Court jury that their convenience market client should not be found negligently liable for injuries sustained by a 38 year-old man who alleged that he slipped on a wet floor. On May 1, 2005, Plaintiff walked into the store to purchase items for work. He slipped and fell face down on a recently mopped floor. Plaintiff denied any assistance while in the store after the fall, but later returned to the store to request an incident report. Plaintiff returned to work a few days after the fall, but claimed an impaired ability to perform work above his head and shoulders. He also testified that he began falling for no apparent reason and had difficulty using his hands. On May 22, 2005, Plaintiff fell while hooking-up a boat trailer and sought treatment at a hospital emergency room. However, due to the Plaintiff s use of medical marijuana, the treating physician encountered difficulty in diagnosing Plaintiff s injuries. A few days later, Plaintiff returned to the hospital complaining that he could not walk. On May 26, Plaintiff returned to the same hospital complaining of numbness after falling while hooking-up his boat, but refused to be admitted. On May 30, Plaintiff was admitted to the hospital after an MRI revealed a central spinal cord injury. He underwent a cervical spinal fusion at the C3-4, C5-6 and C6-7 levels. The parties stipulated that Plaintiff paid medical expenses of $35,000 but was billed $167,000 for treatment. Plaintiff additionally claimed permanent disability with past wage loss of $124,385 and future wage loss of $1,082,506. At trial, defense counsel presented evidence that the wet floor was open and obvious, that Plaintiff was given adequate warning because there were three wet floor signs in the store at the time of his fall and that prior to his fall, Plaintiff joked with an employee about her mop job. Also, defense counsel presented medical testimony that Plaintiff could not have returned to work with a central cord syndrome and that central cord syndrome results in immediate paralysis and is not an injury that becomes progressively worse over time. Health care providers who treated Plaintiff between May 1 and May 21 testified that Plaintiff did not present with complaints consistent with a central cord syndrome. The jury eventually decided that defendant was negligent in the use or maintenance of their property, but decided that defendant s negligence was Continued on page 41

61 Trials & Tribulations continued from page 40 not a substantial factor in cause Plaintiff s injuries. Carol Hill Pickard (Stenberg, Sunseri, Roe, Pickard & Rudy, San Jose, CA) faced an uphill defense battle in representing her client who allegedly was driving a vehicle that collided with the rear end of a vehicle in front of defendant s vehicle injuring the driver of the rear-ended vehicle. After a three day jury trial, Ms. Pickard obtained a defense verdict. Plaintiff s case was simple: She stopped her sedan in the middle of an intersection; the SUV that was driven by defendant collided with the rear end of her sedan; and, a police officer at the accident scene testified at trial that defendant admitted his negligence at the scene. Plaintiff went to an emergency room four hours after the collision with complaints of head, neck and chest pains. Her complaints resolved within one week. About ten days after the accident, plaintiff developed lower back and leg pain that she alleged continued until trial and would continue the rest of her life. The damage claim was $4,602 in medical specials, $5,412 in past lost income, $24,900 for past pain and suffering and $29,000 for future pain and suffering. Defendant testified at trial that he was driving below the speed limit along the same roadway as plaintiff in the same direction about three car lengths behind another SUV as that SUV approached the intersection with a green light. Defendant further testified that the SUV in front of his vehicle made a sudden lane change revealing stopped vehicles in each of the three traffic lanes. Defendant said he slammed on his vehicle s brakes, veered right but could not avoid colliding with plaintiff s sedan. Defendant denied that he admitted to the police officer that the accident was his fault and said that the officer blamed Defendant for the accident claiming all rear-end collisions were the fault of the trailing driver. Defense counsel argued that Plaintiff could not remember if there was traffic in front of her vehicle before the accident, whether the traffic light was green and claimed to be in a different lane than the impact actually occurred. Defendant s testimony and defense counsel s arguments persuaded the jury that the trailing car driver is not always liable for a rear-end collision. Katherine Moore (Grunsky Ebey Farrar & Howell APC, Watsonville, CA) obtained a defense jury verdict for her client who faced a scenario most drivers hope to avoid: a six year-old pedestrian ran out from behind a parked ice cream truck and was struck by defendant s car. On an August day in 2005, defendant testified that he was driving his car at 25 mph or less and was slowing to make a right turn when a youngster ran out from behind an ice cream truck, crossed perpendicular into defendant s traffic path just as the front bumper of defendant s car just past the rear bumper of parked ice cream truck. Plaintiff s counsel contended that the pedestrian crossed at a diagonal pattern and defendant should have been able to stop his car. Plaintiff s injuries included fractures to the 3rd and 5th metacarpal, wounds on his upper arm and right foot. After emergency treatment and two days of hospital observation, plaintiff underwent orthopedic surgery. Plaintiff s counsel asserted that the accident caused scoliosis, that scar division was required for his arm and foot discoloration. Future treatment would be necessary. After a six day trial, the jury deliberated for two hours before rendering a defense verdict. Jonathan Bacon (Archer Norris, Walnut Creek, CA) and Eugene Brown (Filice, Brown, Eassa & McLeod, LLP, Oakland, CA) achieved a defense jury verdict for their clients following a three month trial where plaintiffs claimed about $1 million in damages for bodily injury allegedly resulting from mold exposure over a three year period. Plaintiffs alleged that fungal growth was caused by an undiagnosed roof leak in an affordable housing rental unit owned and managed by three property management/ ownership entities. Plaintiffs also named as defendants a general contractor and roofing contractor. Plaintiffs, a woman and her minor son, contended that they became asthmatic as a result of residing in the apartment unit between 2001 and 2004 due to water intrusion in one of two bedrooms caused by a construction defect. Plaintiff s counsel presented 44 witnesses to establish duty, causation and damages. Defense counsel presented testimony from two jointly-retained experts who opined that current medical science cannot establish a link between serious, permanent physical injury and routine exposure to fungal spores in people with normally functioning immune systems. Evidence presented by defendants showed that Plaintiffs had tested negative to mold allergies and Plaintiffs treating physicians no data apart from Plaintiffs subjective complaints as to mold exposure. On cross-examination, Plaintiffs medical experts admitted to having no data as to the type or doses of mold to which Plaintiffs allegedly were exposed. And, defense counsel developed testimony from both Plaintiffs and defense experts that the cause of asthma as opposed to triggers of asthmatic attacks are unknown, thus science could not plausibly link alleged mold exposure to the cause or development of Plaintiffs asthma. As to the cause of water intrusion, Plaintiffs failed to call any qualified experts to testify that any aspect of construction of the subject apartment complex fell below any applicable standard of care. Plaintiffs had been treated with typical asthma medications and claimed approximately $400,000 for future medication and treatment. After a three month trial, the jury deliberated about three hours before rendering a verdict for all three defendants. D. Marc Lyde (Leonard and Lyde, Chico, CA) obtained a defense jury verdict for his client/physician who faced charges of professional negligence resulting in the death of 48-year old mother of three seven years after decedent underwent heart valve replacement surgery. The decedent s three children claimed that defendant s conduct caused the premature and wrongful death of their mother. During November 1995, Plaintiffs decedent underwent replacement surgery for her aortic and mitral valves performed by cardiothoracic physician employed by defendant professional corporation. Plaintiffs counsel contended that the surgeon first fit and tried to replace the diseased aortic valve with one size prosthesis but instead inserted a prosthesis two millimeters smaller. The surgeon also inserted a prosthesis into the mitral valve. For seven years, the patient reported no heart malfunction. In 2001, she did. Continued on page 42 Fall 2007 Defense Comment 41

62 Trials & Tribulations continued from page 41 During a second surgery, another physician inserted an aortic valve four millimeters larger than the prosthesis first placed there. Following the second surgery, the patient continued to experience acute episodes of congestive heart failure and died abruptly during August An autopsy revealed the cause of death to be due to complete obstruction of the prosthetic mitral valve with a clot. Plaintiffs sought to recover $100,000 in lost economic damages and $200,000 in non-economic damages. Medical experts testified for both sides. After a nine day trial, the jury deliberated for three and one-quarter hours before deciding that defendant corporation s physician did not commit malpractice. Stephen O Neill (Tarkington, O Neill, Barrack & Chong, Santa Rosa, CA) represented a company that employed an esthetician whose alleged professional negligence resulted in plaintiff contracting herpes simplex virus-1 (HSV-1) that erupted on her forehead, cheek and chin. Plaintiff s husband sued for loss of consortium. The 40-year-old plaintiff asserted that she went to defendant spa for a facial. The treatment consisted of the removal of blackheads from plaintiff s face and application of skin care products. Shortly after receiving the treatment, plaintiff testified that her face erupted with HSV-1. Plaintiffs counsel argued that the esthetician who performed the treatment transmitted the virus to plaintiff or the esthetician used an instrument that was improperly cleaned before the facial was performed. Plaintiff called an infectious disease expert who testified that the location and distribution of the herpes lesions on plaintiff s face were highly unusual and atypical for the normal contraction of HSV-1. According to plaintiff s expert, individuals typically contract HSV-1 through kissing or other intimate activity and the primary lesions occur at the site of the inoculation, usually lips or genitals. Plaintiff s counsel argued that the instruments that the esthetician used were prohibited by the cosmetology board. Defense counsel argued that the defendant spa s employees did not use any instruments prohibited by the cosmetology board because all of the instruments available to employees were approved by the board. The defense also argued that 42 Defense Comment Fall 2007 the esthetician had performed more than 4,000 facials and had never used prohibited instruments. And, the defendant s process for sanitizing instruments exceeded all sanitary requirements of the board. Plaintiff s counsel countered with an argument that testing of plaintiff s antibodies performed ten days after the condition first manifested indicated that she had contracted the virus within a seven day period that included the day that plaintiff went to the spa. Plaintiff claimed past medical expenses of $1,200 and future medical expenses for daily medication in the amount of $56,000. Plaintiff claimed emotional distress damages based on a fear that the virus would be transmitted to her spouse and children, as well as shame and embarrassment because she contracted the virus. Plaintiff s counsel argued that plaintiff s spouse was afraid to kiss plaintiff and that there had been a significant change in the pattern of affection between the couple. Defense counsel contested the level of plaintiff s emotional distress by pointing out that approximately 70% of the population contracts HSV-1 commonly known as cold sores - by the time they are 40 years old. The jury deliberated for two hours after an 11 day trial before finding that the defendant spa was not negligent when its esthetician performed the facial. Raymond M. Coates and Dean M. Robinson (Low, Ball & Lynch, San Francisco, CA) represented a contractor who was building a house in Santa Cruz and who allegedly created a dangerous condition and did not provide sufficient warning of the condition to anyone who entered the construction zone. Plaintiff - an office worker - alleged that one night she returned to her Santa Cruz residence in her car with her sister. As they exited the car, plaintiff s dog ran into a construction zone adjacent to plaintiff s apartment complex. Plaintiff went onto the construction site to retrieve her pet, fell into a hole and sprained her ankle. She was taken to a hospital emergency room. Plaintiff sued three contractors for negligent maintenance of the premises, but dismissed two contractors before trial. Defense counsel argued that the potentially dangerous condition was open and obvious, and the contractor put yellow caution tape in strategic places to indicate a heightened area of danger. Defense counsel called as a witness the ER physician who treated plaintiff. The physician testified that plaintiff was significantly intoxicated when she arrived for treatment, asserting that plaintiff s drunken state was the primary cause of her accident. Plaintiff s counsel asserted that plaintiff did not have any alcoholic beverages before the accident, but that she had gone to her apartment to clean-up and had a drink before she went to the hospital. Plaintiff s counsel also argued that there was no caution tape on the construction site at the time of the accident, but rather someone strung the caution tape after the accident occurred. Plaintiff s counsel told the jury that plaintiff s diagnosed sprained ankle eventually developed into complex regional pain syndrome. Plaintiff sought to recover $100,000 in past and future medical expenses; $900,000 in past and future wage losses as she had not worked for approximately three years before the trial; and, an unspecified amount for past and future pain and suffering. After an eight day trial, the jury deliberated for six hours before finding the defendant was not liable for the negligent maintenance of the project as the dangerous condition was open and obvious. Stephen T. Clifford (Clifford & Brown PC, Bakersfield, CA), successfully proved to jury a statute of limitations defense on behalf of his attorney client who plaintiff alleged committed professional malpractice while representing plaintiff in a prior marital dissolution action. During 2001, plaintiff a homemaker in her 50s separated from her husband. During October 2002, a stipulated judgment on divorce was entered. Soon thereafter, plaintiff became dissatisfied with the duration of her spousal support and consulted another attorney about her options concerning support and other issues. Then, she sued her attorney in the dissolution action, claiming that he had given her bad advice that lead her to accept a limited settlement that included only 10 years of spousal support. As she was married for 19 years, which the California Family Code considers a marriage of long duration, Continued on page 43

63 Trials & Tribulations continued from page 42 plaintiff felt that she was entitled to support until death, re-marriage or a further court order. Plaintiff asserted that defendant had told her that 10 years was the maximum length of time for which she could receive support. Defense counsel claimed that plaintiff was fully and properly informed of her legal rights, and that she agreed to the 10-year period for support in return for other negotiated benefits such as coverage under her former spouse s health care insurance, living in her former spouse s house until her son attended college and having her former spouse pay her son s tuition. In addition, under the stipulated judgment, plaintiff was receiving from her former spouse $75,000 per year. Plaintiff sought between $500,000 and $900,000 in loss of spousal support claiming that she should be supported for an additional 10 years. The case bifurcated and the statute of limitations defense was tried first to a jury. The jury determined that the statute of limitations had lapsed, and that plaintiff s claim was barred. Defense counsel opines that the jury based its decision on its perception of when plaintiff discovered the facts to put her on notice of her claim. Fall 2007 Defense Comment 43

64 President s Message continued from page 4 of upper-level carrier representatives with this idea and to our surprise, the concept of reforming this committee was met with universal enthusiasm. After obtaining some excellent background on the original Liaison Committee from past president, Mike Brady, the first meeting of the newly re-formed Liaison Committee occurred on September 14, 2007 in San Francisco. The ADC representatives who attended were impressed with the level of energy and enthusiasm for this committee and for re-connecting with the ADC shown by the carrier representatives who attended which further convinced us that time is definitely right to move forward with this committee. We suggested to the carrier participants that the ADC, through its participants on this committee, could provide muchneeded information on legislative and Judicial Council developments, significant case law, how to train and develop new claims personnel, the needs and interests of counsel doing insurance defense work, and a host of other topics. Conversely, the carrier representatives expressed interest in sharing their insights on topics including the competitive and changing insurance marketplace, achieving greater collaboration with counsel, how top quality counsel can assist carriers in selling their services to their customer base (i.e. touting their outstanding panel counsel to new accounts), how we may need to adjust and adapt to changing insurance programs (eg. Wraps, OCIPS), and many other issues. Many thanks to past president Doug Sears for pressing for the redevelopment of what promises to be a very active committee of this Association benefiting our members and insurance clients alike. It is our hope that the re-formation of the Insurance Liaison Committee will demonstrate the continued relevance and importance of this Association to members of the insurance industry and that they will be encouraged to participate in and attend our seminar programs and our Annual Meeting. Speaking of the Annual Meeting, our current second vice president, Mark 44 Defense Comment Fall 2007 Bonino, has put together what promises to be another in a long line of excellent Annual Meetings. Mark has tried to think outside the box this year shortening the duration of seminars, increasing their number, and offering attendees the most diverse selection of programs we have ever offered. In addition, shortening the individual sessions has enabled us to include programs that will allow attendees to capture all of the required specialty credits. The Friday morning sessions will be shorter and more diverse than in past years and we look forward to hearing our keynoter, the Honorable William W. Bedsworth of the Fourth District Court of Appeal who, beyond his day job, is a wellknown humorist author and columnist who will speak on the subject of balancing our all-important personal lives with the challenges of our professional lives. Many thanks to Mark Bonino, CAMS (our Association managers), and all who have assisted them for the tremendous amount of work and planning that has gone into this year s meeting. The Annual Meeting is one of the things that originally sparked my enthusiasm for this Association that has now become such an important part of my professional life. It is the ideal setting to catch up with friends and colleagues, network, share war stories, learn a few things and enjoy the Holiday season in one of the most beautiful Holiday settings in San Francisco. I look forward with mixed emotions to completing my term as president and to seeing you all on December 13 and 14 at the Westin St. Francis on Union Square. Industry Leading Professionals in Process Serving Record Retrieval Subpoena Preparation Skip Tracing and Research Fax Filings and E-Filing Services* Court Research Writ & Levy Service We offer statewide pricing to all major metropolitan areas of California and third party billing to insurance carriers. With 11 offices statewide for fast and easy service anywhere in California and nationwide, you can count on Kern Legal Services for professional legal support. Los Angeles Santa Ana Ventura Sacramento San Jose Bakersfield Fresno Merced Modesto Stockton San Luis Obispo We try to be the best, not the biggest! Visit us at (800) 675.KERN Fax (866) *E-Filing will be ready and running when the courts are set up to accept them.

65 CDC Report continued from page 5 SB 93, relating to third-party liability in Medi-Cal cases. The bill has an interesting legislative history. SB 93 proposed to amend Welfare and Institutions Code Section , adding one short sentence to the law: The amount paid by Medi-Cal shall not be considered as evidence of past medical damages or for the purpose of reducing the third party s liability to the beneficiary in any third party action. Sought by the Consumer Attorneys of California, this language had been included in a budget trailer bill, but was removed when the final budget was adopted at the insistence primarily of Senate Republicans. On September 6, just days before the end of the legislative year, the language was amended into SB 93. Senate Republicans complained that reinserting the Medi-Cal language after it had been deleted in the budget process amounted to legislative bad faith. The author responded that SB 93 had simply been amended pursuant to legislative rules, and that Republicans were free to cast NO votes if they wished. At that point, the bill was approved on the Senate floor, on the last night of session, by an exceedingly narrow vote of (21 votes are necessary for passage). Both proponents and opponents thereafter predicted that the Governor would agree with their positions. Consumer Attorney representatives suggested that the language had been worked out with the administration, and that they therefore expected a signature on SB 93. Business groups seemed equally confident in a veto. On October 5, the Governor in fact vetoed the bill, noting in a very short message that he had vetoed nearly identical legislation twice before, and that proponents had done nothing to address concerns about keeping medical charges in check. The next issue of Defense Comment will include a comprehensive look at the bills signed and vetoed for Do you agree or disagree?... with the author of an article that you ve read in Comment? Do you have a brilliant practice pointer for fellow defense counsel? Is there a subject that you would like to see addressed in a continuing legal education seminar? Is there something legislators in Sacramento can do to make your professional life easier? Send a Letter to the Editor. Send your letters to Stephen Schram, stephen.schram@ sdma.com. Fall 2007 Defense Comment 45

66 welcome, new members Since July 2007, the following attorneys have been accepted for membership in the ADC. The Association thanks our many members for referring these applicants and for encouraging more firm members to join. Daphne A. Beletsis Perry, Johnson, Anderson, Miller & Moskowitz Santa Rosa REGULAR Member Mark L. Hardy Greenfield Hardy Cameron Park Regular Member Richard Levine Law Offices of Jeffrey Paccassi San Francisco ASSOCIATE Member Steven E. McDonald de la Pena & McDonald, LLP San Francisco Regular Member Do you know someone who should be an ADC member? Call the ADC offices: (916) We ll send them an application and membership packet. Or visit for an on-line application. James W. Peel Peel, Garcia & Stamper LLP Fresno REGULAR Member Hagen, Streiff, Newton & Oshiro Accountants, PC Providing forensic accounting, litigation support and insurance claims services for over 30 years. We offer thorough investigation and analysis of complex financial and business related issues, prompt response time and experienced expert witness testimony. HSNO has five California locations to serve you and we can assist you with the following: Business Interruption Lost Profits Construction Damages Personal Injury Claims Business Valuation Intellectual Property Professional Negligence Fidelity Claims Fraud Investigations Matrimonial Disputes Contractual Disputes Property Loss Mediation Arbitration 2200 Powell Street, Suite 590, Emeryville, CA (510) Mark R. Newton, CPA/ABV F. Michael Sowerwine, CPA George McLaughlin, MBA/CEA Nora C. Ostrofe, MBA/AVA/CEA San Francisco, CA Newport Beach, CA Los Angeles, CA Sacramento, CA (415) (949) (626) (916) For more information, please visit our website: 46 Defense Comment Fall 2007

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68 October 30, 2007 Brown Bag Seminar lombardi, Loper & Connant, LLP Defending Causation in Mold Cases Oakland, CA November 2, 2007 Trial Tactics Seminar Grand Hyatt Hotel The College of Hard Knocks San Francisco, CA December 13-14, 2007 ADC 48 th Annual Meeting westin St. Francis Hotel Tradition & Change San Francisco, CA Association of Defense Counsel of Northern California and Nevada 2520 Venture Oaks Way, Suite 150 Sacramento, CA PRE-SORT FIRST CLASS U.S. POSTAGE PAID PERMIT #2045 Sacramento, CA