Case studies and results details

Summary Adjudication Granted in Breach of Contract Case

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On September 27, 2011, Lisa D. Angelo and German A. Marcucci secured a favorable ruling on a motion for summary adjudication in connection with a cross-defendant’s “duty to defend” pursuant to Crawford v. Weathershield, a California Supreme Court opinion that interprets California Civil Code section 2778 as imposing upon an indemnitee an immediate “duty to defend” the indemnitor in all claims arising from the indemnity provision in a contract, whether or not it is expressly stated.

In 1998, Vivitar Security Systems, Inc. was hired by the landlord of commercial property, RRW, to provide fire and water flow system monitoring. The Service Agreement Vivitar entered into with RRW was for a five-year period. The Agreement contained an express indemnity provision requiring RRW to indemnify and defend Vivitar from any future claims or lawsuits arising from the work Vivitar was hired to perform. More than ten years after entering into the Service Agreement with RRW, an electrical fire occurred in the building which triggered the sprinkler system and allegedly caused water damage. As a result, a commercial tenant in the building filed suit against Vivitar for property damage.

Vivitar tendered its defense of the lawsuit to RRW who refused to defend Vivitar because the Service Agreement was only for a five-year term and was not renewed. Vivitar filed a motion for summary adjudication against RRW for failing to accept its tender and defend Vivitar from the underlying lawsuit. While the contract was indeed for a five-year period, Vivitar argued that the parties continued to act like the contract was still in effect. Judge William Barry of the Los Angeles Superior Court, South Central District, granted Vivitar’s motion for summary adjudication holding that the contract between RRW and Vivitar, including its indemnity clause, remained in effect after the initial term expired. As such, RRW owed, and continues to owe, Vivitar a defense against the underlying suit.

Jury Returns Defense Verdict after 50-Minute Deliberation

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Guy R. Gruppie and Gregory A. Sargenti won a defense verdict after a 50-minute jury deliberation in a personal injury case where the plaintiff sought more than $2 million in damages.

Plaintiff Timothy Julian sued two defendants following a December 10, 2007 accident that occurred at the Long Beach Towne Center on property leased by defendant Sam’s East, Inc. and managed by defendant Vestar Property Management. Mr. Julian claimed to have sustained significant orthopedic injuries to his left shoulder, low back, left knee and left ankle as a result of a negligently maintained storm grate which he claimed shifted under his feet while he was loading over 50 pounds of soda he had purchased from Sam’s into his vehicle.

The plaintiff submitted to four separate surgeries: the surgical repair of damage to his left ankle, low back fusion, left shoulder and left knee. Following the Supreme Court’s recent decision in Howell, the surgeries resulted in recoverable damages of $108,017.19. The defendants denied liability, offering evidence that Vestar’s on-site property manager personally walked the property, that the property management company retained continuous security and janitorial services, that Sam’s employees were frequently present to assist customers with loading their vehicles and to make cart runs, and that Sam’s Tire Service Center employees engaged in heavy use of the area.

After nine days in trial, the jury retired to deliberate before returning a defense verdict less than an hour later, finding that neither Sam’s East, Inc. nor Vestar Property Management negligently maintained the grate.

Defense Verdict and Appellate Decision Won in Business Litigation Matter

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A defense verdict won by Russell S. Wollman and German A. Marcucci was argued by Edmund G. Farrell, III in the Appellate Court and upheld. The case arose from allegations that the defendant, an electronic wholesaler, breached a sales contract and committed fraud.

The defendant is in the business of brokering used video games and used electronic devices associated with video games. The plaintiff refurbishes and resells these used products.

The defendant sold various used video games and used electronic products to the plaintiff by way of an online auction. The plaintiff received 24 pallets of these games and video devices from the defendant on an “as is” basis, without inspection, at an over cost of $300,000. Upon receipt of these products, the plaintiff believed that they were of lower quality than expected. The plaintiff sued the defendant, alleging that the wholesaler breached the sale contract and fraudulently concealed the condition of the products. The plaintiff also alleged that the defendant committed fraud by not disclosing that the source of the goods was one of the plaintiff’s competitors, contending that the purchase would not have been made had this information been disclosed.

The case proceeded to a three-day bench trial where the judge found that the defendant did not breach the “as is” contract. The judge also found that the defendant did not commit fraud by not disclosing the source of the goods.

The plaintiff appealed the judgment, contending that the court erred in its findings, but the appellate court upheld the trial court’s findings, indicating that there was substantial evidence to support the decision, and affirmed the judgment in favor of the defendant.

Federal Court Grants Motion to Dismiss Twenty-Count Criminal Indictment in Las Vegas

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After two years of investigation, the United States Department of Justice indicted a client on eighteen counts of mail fraud, one count of conspiracy to commit mail fraud and aiding and abetting. An asset-forfeiture count accompanied the indictment for an alleged loss of one-million dollars.

Less than six months after the criminal indictment was filed, a motion to dismiss the indictment was granted by a Magistrate Judge for the District Court of Nevada. Lisa D. Angelo, co-chair of the firm’s White Collar practice group, secured the favorable ruling.

M&C Wins Defense Ruling on Fraud Claims in “Dog the Bounty Hunter” Case

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B. Casey Yim and Scott R. Jackman, won a second defense result against Duane “Dog the Bounty Hunter” Chapman on July 27, 2011.

The plaintiffs alleged that Chapman was “fraudulently induced” to enter into the attorney-fee agreement because the attorneys were “not licensed to practice law in Mexico,” and that it was only recently discovered in November 2009. However, the plaintiffs’ claim of practicing law without a license was one of the original grounds of legal malpractice in the plaintiffs’ original arbitration demand issued in June 2008, which has been defensed.

The court ruled that even if the fraud claim was valid, the plaintiffs waived it by waiting to file for over two and a half years, and after the arbitrator’s substantive adverse rulings granting the defense motion for summary adjudication.

Fourth Consecutive Victory for Orange County Professional Liability Team

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B. Casey Yim, assisted by Scott R. Jackman, obtained a defense verdict in a legal malpractice case using successive demurrers sustained without leave to amend.

M&C’s clients, attorneys of an Orange County law firm, were cross-defendants in a legal malpractice case involving five complex commercial and real property “underlying cases.” When the clients failed to pay for extensive billed legal work, the attorneys withdrew and sued the clients for fees. The former clients then cross-claimed for legal malpractice.

M&C filed demurrers to demonstrate that the legal malpractice cross-plaintiffs could not plead any identifiable specific cause of action based on facts from any one of the five cases. The cross-complaint and amendments were a conglomeration of facts taken from all five cases. The judge ruled that the mixture of facts made the pleading inherently “uncertain,” and sustained three successive demurrers, ultimately without leave to amend. M&C’s client law firm also later prevailed on their claim for the fees.

The result brings the Orange County professional liability litigation team to their fourth successive defense victory in a row in legal malpractice and medical malpractice cases over the past 12 months.

Defense Verdict for Major Gas Station Client

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Russell S. Wollman received a favorable verdict in a personal injury and premises liability case.

The plaintiff stopped at the defendant’s Santa Ana, California gas station after hours, and paid for gas at the night box. After pumping gas in her vehicle, she returned to the night box to collect change from the gas station attendant. The plaintiff claimed that the attendant refused to give her any change and then repeatedly slammed the plaintiff’s fingers in the night box. The attendant denied the allegations, claiming that the plaintiff injured her hand while banging on the window and surrounding area near the cash drawer.

The plaintiff sustained deep lacerations and received medical attention at a local hospital emergency room, but now has permanently deformed fingers. After a four-day trial, the jury found the gas station owner not liable, the gas station attendant 20% liable and the plaintiff 80% liable. The jury awarded the plaintiff a total of about $2,750. Mr. Wollman successfully defendedthe case without the benefit of a trial witness, as the attendant was unavailable during the trial.

The defendant filed a motion to reduce the awarded damages further, but the matter was ultimately resolved favorably between the parties, with the plaintiff settling for $1,000.

German A. Marcucci assisted with law and motion work.

Defense Arbitration Award Confirmed after Superior Court Appeal in Legal Malpractice Case

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B. Casey Yim obtained a defense arbitration award in favor of his attorney client, the respondent in a legal malpractice case. The arbitrator also entered a monetary award in favor of the attorney for costs, in accordance with the arbitration agreement, in the amount of $10,000. The award was appealed by the plaintiff to the Superior Court of Orange County. Mr. Yim, with assistance by Gregory A. Sargenti and Scott R. Jackman, secured a judgment affirming and confirming the favorable defense award by the superior court.

The case involved the plaintiff’s failure to heed attorney advice and accept a defense settlement offer. The plaintiff claimed that the attorney did not advise her, and denied that he sent emails and called to communicate the settlement offer. The defense produced evidence showing emails sent to the plaintiff, communicating the settlement offer and deadline, along with the plaintiff’s email responses. The defense also produced evidence of a one-hour telephone conversation between the attorney and the plaintiff on the settlement deadline date. The arbitration award was then reached in favor of the defendant.

The plaintiff appealed the decision, claiming fraud and alleging additional emails were never sent. The defense again impeached her testimony by producing evidence of emails with attachments signed by the plaintiff. The superior court entered judgment confirming the arbitration award, and awarding pre-judgment interest on the arbitration cost award.

Favorable Appellate Decision in Homeowners Association Case

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James S. Williams successfully argued an appeal on behalf of a homeowners association (HOA), its management company, as well as past and current HOA Board members. A homeowner had sued, claiming that an election enacting amended covenants, conditions, and restrictions (CC&Rs) was invalid, that the CC&Rs were amended for improper purposes and that the amended CC&Rs could not be used as a basis for HOA assessment-collection proceedings against her. She alleged that the HOA’s attempt to collect assessments from her under the allegedly invalid CC&Rs violated the Davis-Stirling Common Interest Development Act and state and federal fair debt collection law, among other laws. She also claimed that the HOA failed to maintain fire breaks and landscaping in the common area. The homeowner sought money damages as well as a declaration that the amended CC&Rs were invalid, an injunction, an accounting and numerous other forms of equitable relief.

Litigants are not entitled to a jury trial of equitable claims, such as those for an injunction or an accounting. In California, when a lawsuit presents both legal and equitable claims, equitable claims are generally to be tried first without a jury. Only if unresolved factual issues remain after the equitable phase of the trial is a second “legal” phase tried with a jury. This was the procedure requested by the defense and adopted by the trial court in this case.

At the end of the equitable phase of the trial, the judge ruled for the defense on all claims, held that there were no factual issues remaining to be tried before a jury and entered judgment for the defendants.

The homeowner appealed, claiming, among other things, that she had been denied her Constitutional right to a trial by jury with respect to her legal claims and that the judgment should be reversed. The Court of Appeal disagreed and affirmed the judgment in full.

Summary Judgment Granted in Million-Dollar Coverage Case

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Todd A. Chamberlain won a significant Motion for Summary Judgment on behalf of Markel International in the Alameda Superior Court before Judge Richard Keller.

The case was brought by California Capital Insurance (“CCI”) against Markel International, Citation Insurance and their mutual insured, Roosevelt Owyang and Lumianda, LLC. The insured owned a number of apartments in Oakland and was sued for negligent maintenance, premises liability, habitability and nuisance claims by more than 40 current and previous tenants.

CCI agreed to defend the insured under a reservation of rights. Markel denied coverage on a number of grounds and declined to participate in the defense and settlement of the insured because there was no coverage or potential for coverage under its policies. In particular, Markel denied coverage because of the absence of property damage or bodily injury during their policy periods and the insured’s knowledge of the claims prior to inception of the Markel policies.

CCI settled the underlying case for $1.3 million, incurring more than $500,000 in defense costs, and later sued Citation, Markel and the insured for reimbursement and indemnity. Along with interest, CCI claimed it was more than $2 million out of pocket. CCI settled with the insured and Citation, and sought at least half of the balance of approximately $2 million from Markel. The carriers then filed cross-motions for summary judgment.

The court granted M&C’s motion with a judgment in favor of Markel and denied CCI’s motion.

Carolyn A. Mathews assisted with the moving and opposing papers, particularly on the Personal Injury Coverage B “wrongful invasion” portion of the argument which figured in the decision.