................................................................................Chapter 5: Disposition without Trial

..................................................................................A. Arbitration
p.476, add at bottom of bullet list:
.....o decide the discovery disputes between parties not in the arbitration and parties who are subject to arbitration; however, those who are not parties to an arbitration are entitled to full judicial review of the arbitrator's orders. Berglund v. Arthroscopic & Laser Surgery Center of San Diego, 44 Cal.4th 528, 79 Cal.Rptr.3d 370, 187 P.3d 86 (2008).
..... o issue sanctions for the unauthorized copying of privileged documents, notwithstanding noncompliance with CCP section 128.5 procedural mandates (Bak v. MCL Financial Group, Inc., 170 Cal.App.4th 1118, 1126, 88 Cal.Rptr.3d 800, 806 (2009));
.....Add new para., at end of penultimate para., after "(1968)" and before "The:" On the other hand, an award need not be voided, merely because the arbitrator discloses more than required, out of an abundance of caution. Luce, Forward, Hamilton & Scripps v. Koch, 162 Cal.App.4th 720, 724-725, 75 Cal.Rptr.3d 869, 871 (2008). Further, once a case is arbitrated, if there is an incomplete or ambiguous disclosure, the remedy is to seek disqualification of the arbitrator before---not after---the arbitration is completed (assuming the ground is known at that point). Dornbirer v. Kaiser Foundation Health Plan, Inc., 166 Cal.App.4th 831, 846, 83 Cal.Rptr.3d 116, 127 (2008).
....The gist of the disclosure requirement is to ensure impartiality. It is interpreted very narrowly, to ensure public confidence in the arbitration process. For example, one of the arbitrators in a woman's case against a cosmetic surgeon failed to disclose his being censured while on the bench. The reasons included his sexually explicit remarks, ethnic slurs, and derogatory comments to or about his female employees and colleagues based on their physical attributes. In such cases: "Actual bias in an arbitrator is not required to trigger the disclosure requirements. Rather, the duty to disclose is measured by an objective, reasonable person standard. ... [T]he question is whether an ‘average person on the street’ aware of the facts would harbor doubts as to the arbitrator's impartiality." Haworth v. Superior Court, 164 Cal.App.4th 930, ___, 79 Cal.Rptr.3d 800, 805 (2008), review granted and opinion superseded, 84 Cal.Rptr.3d 37, 193 P.3d 281 (2008).

p. 477, insert following sentence at end of top paragraph, just after "estoppel).": There is a split of authority regarding the scope of a patient's authority to bind a spouse and adult children (heirs) to an arbitration agreement. Ruiz v. Podolsky, 95 Cal.Rptr.3d 828 (2009), rev. granted and opinion superseded, 2009 WL 3582908 (2009).

After Haworth, add another new para.:
.....Certain matters may only be arbitrated. For example, there are often disputes between an insured and an insurer regarding: (a) whether the insured is entitled to damages from an uninsured motorist; and/or (b) the amount of such damages. Such issues, arising under the relevant insurance contracts, must be determined by arbitration. Cal. Ins. Code § 11580.2(f). But can a non-signatory underinsured person be a claimant within the meaning of the insurer-insured contract? See Bouton v. USAA Casualty Insurance Co., 43 Cal.4th 1190, 1201, 78 Cal.Rptr.3d 519, 527, 186 P.3d 1 (2008).
.....The “person” referenced in the above disclosure requirement concerning partiality is an objective, reasonable person. In applying this objective, reasonable person standard, “[w]hether a particular relationship requires disclosure is a factual question to be determined by the trier of fact in each case.” Agri-Systems, Inc. v. Foster Poultry Farms, 168 Cal.App.4th 1128, 1140, 85 Cal.Rptr.3d 917, 926 (2008). Assume that the arbitrator did not provide legal services or advice directly to a party to an arbitration. His attorney-client relationship with that party was indirect---because another partner in his law firm acted as attorney for that party. Under the above "reasonable person" standard, should he serve as an arbitator? See Agri-Systems (first impression).

p. 478, add new paragraph between top paragraph (ending in "1281.2.") and following paragraph (starting with "The party": A court cannot consider a claim that an arbitration provision is unenforceable if that claim is in reality a subterfuge for a challenge to the entire agreement as being unconscionable. A challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator. However, a challenge to the arbitration clause itself must be decided by the court. As explained by the California Court of Appeal in Winter v. Window Fashions Professionals, Inc., 166 Cal.App.4th 943, 948--949, 83 Cal.Rptr.3d 89, 93 (2008):

two-fold task. First, the court must determine whether the plaintiffs are challenging the enforceability of the contract in toto, or whether they are contesting only the arbitration provision. If the court concludes it is the latter, it must then rule on the merits of the plaintiffs' challenge. After analyzing the plaintiffs' opposition to the petition to compel arbitration, the court concluded that, despite the absence of a challenge to the arbitration provision in the complaint, it was within the province of the court, not the arbitrator, to rule on the validity of that arbitration clause.

1. Contractual Arbitration
p. 487, insert at end of Note 1: Note that "[g]iving substantial deference to arbitrators' own assessments of their contractual authority is consistent with the general rule of arbitral finality.... Thus, '[a]ny doubts about the arbitrator's power to decide ... issues must be resolved in his favor.' " Bak v. MCL Financial Group, Inc.
170 Cal.App.4th 1118, 1124, 88 Cal.Rptr.3d 800, 804 (2009).

p. 487, Note 2: The California Supreme Court ultimately decided Cable Connection v. DIRECTV, 44 Cal.4th 1334, 82 Cal.Rptr.3d, 229, 90 P.3d 586 (2008) (5-2 split). Citing Moncharsh, the majority opinion "adhered" to this earlier opinion that seemed to prohibit judicial review of an arbirtator's factual or legal error, by its broadly construed language that "in the absence of some limiting clause in the arbitration agreement, the merits of the award, either on questions of fact or law, may not be reviewed except as provided in the statute." However, the Cable Connection majority held that the parties "may expressly agree to accept a broader scope of review." Also, "to take themselves out of the general rule that the merits of the award are not subject to judicial review, the parties must clearly agree that legal errors are an excess of arbitral authority that is reviewable by the courts." Here, the arbitration clause provided just that, so the majority relied on general principles of contract law, deciding that the parties could expressly agree for judicial review in this circumstance.
.....The dissent, on the other hand, charged that such "full scale review" dashed the legislative intent to limit judicial review to correcting or vacating an award, only as permitted by statute--particularly since the courts and the legislature are not parties to the arbitration agreement. For now, the Moncharsh dissent has prevailed ("the [Moncharsh] majority's holding requires our trial courts not only to tolerate substantial injustice, but to become its active agent"). One can expect that the Cable Connection exception will not be the last word on this matter.
.....Citing Cable Connection, the Court of Appeal viewed the following language as being too vague to trigger the Cable Connection exception to Moncharsh: "[t]he arbitrator * * * shall render an award in accordance with substantive California Law. * * * True, the final clause specifies 'substantive California Law' is to govern the arbitration, but the language and its context, a standard form real estate contract, suggest [only] a routine identification of forum law." Christensen v. Smith, 171 Cal.App.4th 931, 936--937, 90 Cal.Rptr.3d 57, 61--62 (2009).
.....Six months prior to Cable Connection, the U.S. Supreme Court held that federal litigants do not have the (Cable Connection) power to limit arbitrators to resolutions made only in accordance with the proper substantive law. Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. ___, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). Preemption was not an issue in Hall, as it might have been, had Hall to be decided after Cable Connection.
.....Who has jurisdiction to determine an arbitrator's jurisdiction? In the event of a dispute, where the parties have generally agreed to arbitrate their disputes, one of them might file an action in the Superior Court---on the assumed basis that the arbitrator does not have the power to hear a particular issue. This jurisdictional question is normally for the court to decide. But the parties may agree otherwise. However, they must "clearly and unmistakably agree that arbitrators will have power to decide their own jurisdiction * * * . [Paragraph] The default position on who decides arbitrability is 'undeniably' a matter for judges, not arbitrators, so the parties must 'clearly and unmistakably provide otherwise' if they want arbitrators to assume the role that judges would be normally expected to assume." Gilbert Street Developers, LLC v. La Quinta Homes, LLC, 174 Cal.App.4th 1185, 1190--1191, 94 Cal.Rptr.3d 918, 921--922 (2009).

p.488, add new para. 2, after "1281.2.": An issue subject to arbitration may be mixed in with one that is not. A single overlapping issue is sufficient to request a stay of the judicial proceedings. The stay might be issued regarding only the issue subject to arbitration. The purpose of a stay is to protect the jurisdiction of the arbitrator by preserving the status quo until the arbitration is resolved. Absent a stay, continuing proceedings in the trial court will likely disrupt the arbitration proceedings and can render them ineffective. CCP § 1281.4 (single issue); and Heritage Provider Network, Inc. v. Superior Court, 158 Cal.App.4th 1146, 1152, 70 Cal.Rptr.3d 645, 649-650 (2008).

p. 488, new Note 6: You will recall that the Moncharsh court commented that the dispute was one involving sophisticated parties. Assume Attorney Moncharsh subsequently has a fee dispute with one of his clients. Disputes concerning legal fees have been the most serious problem between members of the bar and the public. Aguilar v. Lerner, 32 Cal.4th 974, 983, 12 Cal.Rptr.3d 287, ___, 88 P.3d 24 (2004). The the Mandatory Fee Arbitration Act (MFAA) provides the client with an alternative means of resolving fee disputes. Under Cal.Bus. & Prof.Code section 6200, a client may waive its right to arbitration by failing to request arbitration within thirty days of receipt of a notice of the right to arbitrate, or by answering a lawsuit initiated by an attorney---if the attorney provided the client with the requisite notice of the right to arbitrate. A client may also waive fee arbitration by filing an action or other pleading which seeks a judicial resolution of a fee dispute, or affirmative relief against the attorney for malpractice or other professional misconduct. This process is succinctly articulated in Schatz v. Allen Matkins Leck Gamble & Mallory LLP, 45 Cal.4th 557, 198 P.3d 1109 (2009).

p. 488, new Note 7: Recall from Moncharsh that an arbitration is judicially reviewable when there has been a CCP section 1286.6 "miscalculation of figures"---or the award is "imperfect," and can be changed without affecting the merits. Assume that a trial judge advises a plaintiff's attorney, who wishes to "correct" an arbitration award to obtain additional sums, to return to the arbitrators. He does so, and obtains an amendment which includes the additional amounts sought. Is this permissible? Should the trial judge have just affirmed the award? See Law Offices of David S. Karton v. Segreto, 176 Cal.App.4th 1, 97 Cal.Rptr.3d 329 (2009).

p. 507, Note 2, add to Gentry citation: cert. denied, 128 S.Ct. 1743 (2008).

p. 508, add new paragraph at end of Note 2: Other statutory rights include the Private Attorney General Doctrine, addressed in Sokolow, at casebook p. 811. A party may normally recover attorney's fees in civil rights legislation. Where a private employer barred this remedy via a contractual arbitration clause, the California Court of Appeal's decision in Franco v. Athens Disposal Co., Inc., 171 Cal.App.4th 1277, 1300, 90 Cal.Rptr.3d 539, 555-556, (2009) struck this exclusion as being unconscionable, in the following terms:

The parties' arbitration agreement not only contains a class arbitration waiver but also prohibits an employee from acting as a “private attorney general.” The PAGA authorizes an aggrieved employee-here, Franco-to recover civil penalties “on behalf of himself ... and other current or former employees.” The agreement does state, however, that employees may recover remedies due them “ individually.” * * * [Para.] The Legislature has made clear that an action under the PAGA is in the nature of an enforcement action, with the aggrieved employee acting as a private attorney general to collect penalties from employers who violate labor laws. Such an action is fundamentally a law enforcement action designed to protect the public and penalize the employer for past illegal conduct.

p. 508, add new Note 3a: Normally, the parties may not agree to authorize the arbitrator to decide issues of arbitrability and unconscionability. As explained by the California Court of Appeal:

the provision in the arbitration agreement giving the arbitrator exclusive authority to decide enforceability issues is unconscionable and, therefore, unenforceable. We have a genuine concern about the potential for the inequitable use of such arbitration provisions in areas, such as employment, where the parties are not at arm's length and do not have equal bargaining power. In such situations, in which one party tends to be a repeat player, the arbitrator has a unique self-interest in deciding that a dispute is arbitrable.
....................................................................* * *
“The only advantage of submitting the issue of fraud to arbitration is for the arbitrators. Their compensation corresponds to the volume of arbitration they perform. If they determine that a contract is void because of fraud, there is nothing further for them to arbitrate. I think it raises serious questions of due process to submit to an arbitrator an issue which will determine his compensation.”

Ontiveros v. DHL Express (USA), Inc., 164 Cal.App.4th 494, 505 & 506, 79 Cal.Rptr.3d 471, 480--481 (2008) (trash truck driver's required waiver of right to class arbitration, and prohibition against acting as private attorney general, are unconscionable derogations from rights guaranteed by statute).

p. 509, Note 8, add following second paragraph (at top of p. 509): Assume that an employer's mandatory arbitration contract provides that any employment discrimination claim is waived, unless submitted to arbitration either: (a) within one year from the date the dispute arose; or (b) from the date plaintiff first became aware of facts giving rise to the dispute. The arbitrator grants summary judgment for defendant, on the basis of plaintiff's late claim. The FEHA, however, provides: "If an accusation [by the agency] is not issued within 150 days after the filing of a complaint ***, the department shall promptly notify, in writing, the person claiming to be aggrieved that the department shall issue *** the right-to-sue notice. This notice shall indicate that the person claiming to be aggrieved may bring a civil action under this part against the *** employer *** within one year from the date of that [right to sue] notice.” This employment contract reduced the time within which the employee could sue, to only one year from a dispute or when the plaintiff first became of aware of the relevant facts. Citing Armendariz, the California Court of Appeal held that the one-year limitation period in employment agreement did not unfairly burden employee's opportunity to vindicate his claim. Does this decision comply with the central Armendariz theme that statutory rights cannot be waived in an employment contract? See Pearson Dental Supplies, Inc. v. Superior Court, 166 Cal.App.4th 71, 82 Cal.Rptr.3d 154, review granted and opinion superseded, 85 Cal.Rptr.3d 693, 196 P.3d 220 (2008).

3. International Arbitration
p. 516, case update: Gueyffier was decided by the California Supreme Court, holding that an arbitrator does not exceed his powers when he applies equitable defenses to excuse a party from performing a material condition of an agreement that provides the arbitrator may not modify or change any of the agreement’s material provisions. Gueyffier v. Ann Summers, Ltd., 43 Cal.4th 1179, 77 Cal.Rptr.3d 613, 184 P.3d 739 (2008).

4. Federal Preemption
p. 518, add new first bullet entry:
.... o One cannot assert a claim under the F.A.A., as if it were a case arising under federal law. Section 4 of the
Act authorizes district courts to entertain petitions to compel arbitration. However, the source of subject matter jurisdiction must otherwise qualify for federal court jurisdiction. The trial judge may thus "look through" a petition to compel arbitration to determine whether it has jurisdiction over the petition. Vaden v. Discover Bank, ___ U.S. ___, 129 S.Ct. 1262, 173 L.Ed.2d 206 (2009).

p. 519, add new last bullet entry: o "When parties agree to arbitrate all questions arising under a contract, the FAA supersedes state laws lodging primary jurisdiction in another forum, whether judicial or administrative." Preston v. Ferrer, 552 U.S. 346, ___, 128 S.Ct. 978, 987 (2008) (preempting California Talent Agencies Act (TAA) provisions granting Labor Commissioner exclusive jurisdiction to decide issue parties otherwise agreed to arbitrate].

.......................................................................................B. Mediation
p. 520, insert following at end of introduction, just after "2006).": California's appellate courts also rely on mediation as an alternative to immediately processing certain civil appeals. Under C.R.C. 3.890: "The rules in this chapter implement the Civil Action Mediation Act * * * [which] apply in the Superior Court of California, County of Los Angeles and in other courts that elect to apply the act." See, e.g., Local Rules of the Court of Appeal Third Appellate District, at: <http://www.courtinfo.ca.gov/courts/courtsofappeal/3rdDistrict/localrules.htm>.

1. Statutory Regime
p. 521, insert following last paragraph in subsection 1:
.....The parties may, of course, create mediation obligations not required by statute. For example, Paragraph 17A of the standard California residential property purchase agreement precludes the recovery of attorney's fees when a party "commences an action without first attempting to resolve the matter through mediation." A plaintiff who filed a case without first seeking mediation thus forfeited the right to recover attorney's fees, which were otherwise available by contract. Lange v. Schilling, 163 Cal.App.4th 1412, 78 Cal.Rptr.3d 356 (2008).

p. 531, Note 7 update: Simmons was reversed. Citing Foxgate, the California Supreme Court determined that there can be no implied waiver by conduct. The mediation statutes require express waiver. The Court remanded Simmons for further trial court proceedings in 44 Cal.4th 570, 80 Cal.Rptr.3d 83, 187 P.3d 934 (2008). The defendant physician sought to revoke her consent to the alleged settlement of their malpractice- based action for patient's wrongful death. She was not estopped, however, under the doctrine of estoppel to contest jurisdiction, from invoking mediation confidentiality to exclude evidence of alleged oral settlement agreement from breach of contract action.

p. 547, Note 1, add following, just after "sooner?": Suppose a plaintiff offers no opposition to a motion for summary judgment. He instead files a voluntary dismissal of an action, before the trial court issues a tentative ruling granting the defendant's motion for summary judgment. Is that dismissal ineffective, because of the inevitable result? See Gogri v. Jack In The Box, Inc., 166 Cal.App.4th 255, 264, 82 Cal.Rptr.3d 629, 636 (2008). What a court granted a motion to compel arbitration, followed by the plaintiff's voluntary dismissal without prejudice? Is that voluntary dismissal valid? See Cardiff Equities, Inc. v. Superior Court, 166 Cal.App.4th 1541, 83 Cal.Rptr.3d 699 (2008).

................................. ...............................................................C. Case Management
2. Sanctions
p. 539, new Note 3: Can a judge impose a terminating sanction for failure to appear at a Case Management Conference? CCP section 575.2 authorizes local rules designed to encourage compliance with court orders. The Superior Court of the County of Los Angeles Local Rule 7.13 authorizes imposition of appropriate sanctions for failing "to meet the time standards and/or deadlines established herein." A Notice of Case Management Conference sent by the court stated: "if you do not file the Case Management Statement or appear and effectively participate at the Case Management Conference, the Court may impose sanctions (including dismissal of the case, striking of the answer and payment of money) * * * ." That notice also directed the respondents to serve this notice of hearing to all parties/attorneys of record "forthwith." Respondents instead sent their own notice. The case management conference was continued. Neither notice provided appellant with notice that adverse action, resulting in the striking of her answer and entering her default for failing to appear for the continued case management conference. The Court of Appeal acknowledged that "[u]nder section 575.2, the court exceeded its authority by imposing sanctions for noncompliance with the Local Rules, “without prior notice to, and an opportunity to be heard by, the party against whom the penalty is sought to be imposed.” Lee v. Ji Hae An,
168 Cal.App.4th 558, 565, 85 Cal.Rptr.3d 620, 625 (2008) (affirming default judgment on other gounds).

........................................................................................................D. Dismissal
1. Voluntary Dismissal
* p. 547, insert new Note 4: May a plaintiff voluntarily dismiss her case when the defendant has filed a cross-complaint? Pursuant to CCP section 581(i): "No dismissal of an action may be made or entered, or both
* * * where affirmative relief has been sought by the cross-complaint of a defendant or if there is a motion pending for an order transferring the action to another court under the provisions of Section 396b." As explained in Schwartz v. Schwartz, 167 Cal.App.4th 733, 742--743, 84 Cal.Rptr.3d 387, 394 (2009): "The controlling factor is whether the other party has [actually] requested affirmative relief, regardless of the form of the pleading. Affirmative relief does not include mere defensive matter. Rather, it refers to new matter that in effect amounts to a counterattack. The relief sought [by the original defendant-cross-complainant], if granted, operates not as a defense but affirmatively and positively to defeat the plaintiff's cause of action."

* p. 547, insert new Note 5: May a plaintiff dismiss his case when the judge compels arbitration? The arbitration was arguably a "trial" within the meaning of the voluntary dismissal statute. The Court of Appeal held, however, that "even assuming that an arbitration can be considered a 'trial' within the meaning of section 581, it was undisputed that no 'trial' had commenced and no dispositive motion had been ruled upon prior to Cardiff's voluntary dismissal * * * . Under these circumstances, we conclude that [plaintiff] Cardiff had an absolute right to dismiss * * * after the trial court granted the O'Neel defendants' motion to compel arbitration." Cardiff Equities, Inc. v. Superior Court, 166 Cal.App.4th 1541, 1550, 83 Cal.Rptr.3d 699, 707 (2008).

2. Involuntary Dismissal
....(a) Failure to Prosecute
* p. 556, insert new Note 7: Should the time that a case might be dismissed---after it was removed to federal court, then retuned to state court---be subtracted or ignored? See Spanair S.A. v. McDonnell Douglas Corp.,
172 Cal.App.4th 348, 90 Cal.Rptr.3d 864 (2009).

.................................. ..............................................................E. Default Judgment
p. 566, n.5, add following paragraph: Citing Greenuup, the Court of Appeal noted that when the amount awarded via default is greater than that stated in the complaint, the court has the discretion to allow the plaintiff to amend her complaint. She cannot, however, obtain a damage award of the $25,000.01 jurisdictional minimum in an unlimited case. Julius Schifaugh IV Consulting Service v. Avaris Capital, Inc., 164 Cal.App.4th 1393, 79 Cal.Rptr.3d 910 (2008).

p. 566, insert new Note 8: Should an insured's failure to notify his insurer of the plaintiff's suit against the insured---resulting in a default judgment---necessarily result in a successful motion to avoid the default? The insurer will argue that it was prejudiced by its insured's breach of a cooperation clause. However, success depends on whether there was a viable defense, which the finder of fact could reasonably have accepted. As explained in Belz v. Clarendon America Insurance Co., 158 Cal.App.4th 615, 629, 69 Cal.Rptr.3d 864, 872 (2007): "The courts have repeatedly recognized that, in circumstances like those here, the insurer must show actual, substantial prejudice to prevail on a policy defense."

p. 566, insert new Note 9: Assume that you formerly represented Mr. Dougherty. Your client did not appreciate your valuable services rendered. You sued him for $65,000 in unpaid fees and costs. He did not answer your complaint.You obtained a default judgment for $86,000. You've now spent a decade trying to collect on your judgment. With interest, the combined attorney's fees, costs, and interest has grown to $1,000,000. To what amount are you entitled? See David S. Karton v. Dougherty, 171 Cal.App.4th 133, 89 Cal.Rptr.3d 506 (2009).

.........................................................................................................F. Settlement
1. General Procedure
p. 566, insert following paragraph, in mid-paragraph, between "(c)(4)." and "Compare FRCP" (federal comparison becomes new third paragraph): As C.R.C. 2.30(b) provides: "In addition to any other sanctions permitted by law, the court may order a person, after written notice and an opportunity to be heard, to pay reasonable monetary sanctions to the court or an aggrieved person, or both, for failure without good cause to comply with the applicable rules. For the purposes of this rule, 'person' means a party, a party's attorney, a witness, and an insurer or any other individual or entity whose consent is necessary for the disposition of the case. In a representative case, the trial judge sanctioned the defendant's insurance carrier because "[t]he manner in which this was handled in my chambers * * * was totally bad faith, totally bad faith.” It is possible to sanction an insurance carrier or other non-party from whom consent to settle is required. However, "the failure to increase a settlement offer or to otherwise participate meaningfully in settlement negotiations violates no rule of court and is not a proper basis for an award of sanctions." Vidrio v. Hernandez, 172 Cal.App.4th 1443, 1459, 92 Cal.Rptr.3d 178, 190 (2009).

p. 567, insert following at end of first para., after "(1983).": An agreement is "not lacking consideration, simply because it is later determined the claim was not well founded." In re Estate of Bennett, 163 Cal.App.4th 1303, 1310, 78 Cal.Rptr.3d 435, 441 (2008).

p. 567, insert new paragraph between top two paragraphs (ending in "(1983)." and starting with "There is a duty": Courts normally do not consider the fairness of settlements. Exceptions include judicial review of "good faith settlements" under CCP section 877.6, which you will study in the next subsection of this book. Another exception is the class action. The trial judge must determine the adequacy of a class action settlement by independently considering the fairness of the representative's settlement to the absent class members whose claims are also being resolved. As stated by the California Court of Appeal in Kullar v. Foot Locker Retail, Inc., 168 Cal.App.4th 116, 129 &133, 85 Cal.Rptr.3d 20, 31 & 33 (2008):

in the final analysis it is the court that bears the responsibility to ensure that the recovery represents a reasonable compromise, given the magnitude and apparent merit of the claims being released, discounted by the risks and expenses of attempting to establish and collect on those claims by pursuing the litigation. 'The court has a fiduciary responsibility as guardians of the rights of the absentee class members when deciding whether to approve a settlement agreement.'
....................................................................* * *
.....Following the opportunity for limited discovery, the trial court should redetermine whether the proposed settlement is fair, adequate and reasonable. * * * We do not suggest that the court should attempt to decide the merits of the case or to substitute its evaluation of the most appropriate settlement for that of the attorneys. However, as the court does when it approves a settlement as in good faith under Code of Civil Procedure section 877.6, the court must at least satisfy itself that the class settlement is within the “ballpark” of reasonableness.

p. 572, insert following at the end of Note 3: The court must also determine whether the parties in fact entered into a binding settlement agreement. It must ensure that all material terms of the agreement are explicitly defined, and that the parties agree to be bound by those terms. As explained by the California Court of Appeal in Hines v. Lukes, 167 Cal.App.4th 1174, 1185, 84 Cal.Rptr.3d 689, 700 (2008): "We conclude that by omitting materials terms of the settlement, the order fails to accurately reflect the parties' agreement and therefore fails to comply with Code of Civil Procedure section 664.6."

p. 572, add new Note 4: Recall the Edible Widget hypothetical, Chapter 1, Section E. Assume that Pam dies as a result of a not so edible widget lunch at Dan's Deli. Some, but not all, of her heirs settle a lawsuit against the deli. The settlement money is distributed to the plaintiffs. As you likely learned in other courses, all of the decedent's heirs must join in a wrongful death claim. Dan's lawyer had no reason to know that not every heir had joined in this lawsuit. She did not demurrer to the complaint for lack of proper joinder. Can this settlement be attacked by an heir who learns of the death, ensuing lawsuit, and settlement? See Ruiz v. Podolsky, 95 Cal.Rptr.3d 828 (2009), rev. granted and opinion superseded on other grounds, 2009 WL 3582908 (2009).

2. Settlement Planning
.....(a) Good Faith Settlement Hearing
p. 581, add following at end of Note 4a: Does the non-settling defendant have to disclose a settling defendant's settlement amount? The procedure for applying a section 877 settlement credit varies, given statutory silence on the process. In many cases, the jury is given the evidence of a settlement and a special verdict form, whereby it considers the prior settlement in calculating the verdict and settlement amount setoff. But that detail could prejudice the jury. But as illustrated by the California Court of Appeal in Wade v. Schrader,
168 Cal.App.4th 1039, 1048, 85 Cal.Rptr.3d 865, 872 (2008):

"the defendant should not be required to prejudice its defense by disclosing substantial settlements made by codefendants." In cases where entitlement to and the amount of the settlement credit is not in dispute, the nonsettling defendant may raise the issue after the verdict but before judgment so that the trial court may calculate the judgment with the settlement credit in mind. And there are cases in which the trial court has applied a settlement credit by amending the judgment to reflect the credit.

p. 581, new Note 7: Should a plaintiff retain the unilateral right to determine which defendant or defendants should be included in an action, for the limited purpose of allocating the respective percentages of fault? Henry v. Superior Court, 160 Cal.App.4th 440, 449, 72 Cal.Rptr.3d 808, 812 (2008).

* p. 581, new Note 8: The settling party's proportionate share of liability is one of the most important factors in the judicial determination of whether a settlement is in good faith. Assume that a medical malpractice plaintiff's estimated damages are $10,000,000. P settles with the nurse and employing hospital for $7,500,000. The trial judge approves the settling defendant-attending physician's offer of $200,000. This figure represents two percent of the amount at issue and ten percent of the available insurance coverage. The trial judge approves this settlement as one made in good faith. Should he be reversed for an abuse of discretion? See Long Beach Memorial Medical Center v. Superior Court, 172 Cal.App.4th 865, 873, 874, 91 Cal.Rptr.3d 494, 500--501 (2009).

.....(b) Insolvent Defendants
p. 581, insert initial new paragraph:
.....One of your recurring responsibilities will be to assess whether a defendant is solvent. She may also suddenly become insolvent, as a result of your hard fought battle to obtain a sizeable award. In May 2009, for example, soon after a jury returned a $300,000,000.00 compensatory damage judgment against a C.E.O., the jury was expected to start the punitive damages phase. But he filed for bankruptcy. See Gabe Friedman, CEO Files for Bankruptcy a Day After Jury Awards $300 Million Against Him, Los Angeles Daily Journal (May 13, 2009) p. 1.

* p. 586, add following at end of Note 3: Assume that a defendant owes a "non-delegable" duty to the plaintiff. The plaintiff is injured in an elevator maintained by D1 in a building owned by D2. The jury finds D1 twenty-five percent liable, and D2 seventy-five percent liable for their respective economic and non-economic damages. D2 owes P the non-delegable duty to maintain the premises in a reasonably safe condition. D1 is economically viable, but nevertheless argues that D2 is 100% responsible for the damages, including P's non-economic damages. Is Prop 51 inapplicable, resulting in D@ paying all of P's non-economic damages, because D2 owed a non-delegable duty to P? See Koepnick v. Kashiwa Fudosan America, Inc., 173 Cal.App.4th 32, 92 Cal.Rptr.3d 453 (2009).

3. Offer of Judgment
....(a) Statutory Regime
p. 586, insert following at end of third para., just after "998(e))": The offer of judgment statute does not create an independent right to attorney's fees. A party may secure that benefit via a contractual agreement under Cal. Civ. Code § 1717(a), where the contract specifically provides that attorney's fees and costs incurred to enforce that contract shall be awarded to the prevailing party--but not by operation of section 998. Ford Motor Credit Co. v. Hunsberger, 163 Cal.App.4th 1526, 1532, 78 Cal.Rptr.3d 661, 664 (2008).

.....(b) Judicial Applications
p. 600, Note 1, add following, just after "rule?": Would a plaintiff's offer of judgment, served with the summons and complaint be a token offer? See majority and dissenting opinions in Barba v. Perez, 166 Cal.App.4th 444, 82 Cal.Rptr.3d 715 (2008).

p. 600, add new Note 4: Staci Engle worked as a legal assistant for a law firm. She resigned as a result of alleged acts of sexual harassment and retaliation for objecting to such conduct. She sued and sought attorney's fees, based on her sex discrimination cause of action arising under California's Fair Employment and Housing Act (the statutory basis for the claims in Brown, casebook p. 80, and Schwab, p. 154). Law firm made a section 998 offer of judgment. It contained the following operative language: "that the judgment ... shall be in exchange for a release and discharge of any and all claims, of whatever nature (substantive and procedural) which the plaintiff may have against the defendants" (italics added). Ms. Engle accepted the 998 offer in writing. The next day, law firm provided a release form that specifically mentioned "attorney's fees" as part of the 998 offer. Is she entitled to the attorney's fees, in addition to the $35,000 998 offer of judgment? Or, were they unavailable because of the broad terms of the above-quoted 998 offer? See Engle v. Copenbarger and Copenbarger, 157 Cal.App.4th 165, 68 Cal.Rptr.3d 461 (2007).

...........................................................................................G. Summary Judgment
1. Statutory Regime
p. 601, add following introductory sentence at beginning of first para., just before "This section":
.....In your first civil procedure course, you no doubt studied the motion for summary judgment. Your professor may not have had time to address summary adjudication. If not, the California Supreme Court has penned a decision that will fill that gap. North Coast Women's Care Medical Group, Inc. v. San Diego County, 44 Cal.4th 1145, 1160, 81 Cal.Rptr.3d 708, 720, 189 P.3d 959 (2008) (Part V).

p. 602, add new penultimate para., between "submitted" and "The": A trial judge properly granted summary judgment for the landlords, based upon the tenants' failure to file a separate statement of undisputed material facts, although the case was not complex. Whitehead v. Habig, 163 Cal.App.4th 896, 77 Cal.Rptr.3d 679 (2008).

p. 603, add new case on summary judgment timing: For Robinson, click here.

2. Required Burden
p. 603, after Aguilar: Robinson (above) covers the timing of notice and minimum timing before trial, while Kojababian covers the Separate Statement requirement. For Kojababian, click here. * An illustration of the column format for the seperate statement is available in Oldcastle Precast, Inc. v. Lumbermens Mutual Casualty Co., 170 Cal.App.4th 554, 569, 88 Cal.Rptr.3d 363, 374 (2009). Note that the court has the discretion to grant summary judgment if the opposing party fails to file a proper separate statement. But "this provision does not authorize doing so without first determining that the moving party has met its initial burden of proof. This [burden] presupposes that the moving party has addressed the material facts of the complaint. If not, the moving party cannot meet its burden of persuasion.” Teselle v. McLoughlin, 173 Cal.App.4th 156, 169, 92 Cal.Rptr.3d 696, 708 (2009).

p. 615, Note 6, add to Google citation: review granted, 72 Cal.Rptr.3d 112 (2008).

..................................................................................................H. Reconsideration
p. 622, add new para (c): Instead of the above part (b) motion, assume that Pam's lawyer brazenly makes a non-complying motion for reconsideration with a view toward triggering the same judge's decision to reverse his original decision. There is no new fact or law on which to base the fresh motion. While this obviously defeats the purpose of CCP § 1008, nothing in the statute or Goel precludes the filing of the above motion (although it is subject to a finding that it is a frivolous motion and subject to sanctions). The statute itself "does not erect a permanent, insurmountable barrier to reconsideration by the trial court on its own motion." How should the court react? In re Marriage of Barthold, 158 Cal.App.4th 1301, 1309, 70 Cal.Rptr.3d 691, 696 (2008).