If You Aren’t Mentioned Turn to Intervention

Co-authored by Carl I. S. Mueller, Esq. and Gustavo Silvestre Boldrini, Esq.

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Intervention can be a useful tool when your clients’ rights or interests may be affected by the outcome of a suit they were not named in. The importance of intervening correctly and being admitted to the suit prior to engaging in litigation were recently highlighted by a Second District appellate decision.

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The Second District Court of Appeal issued an appellate decision on Pierre Richard v. James A. Frieden and Denise Tukes (Super. Ct. L.A. County, 2020, No. 19STCV44270) affirming the trial court’s ruling that the plaintiff in a malicious prosecution case lacked standing because he had not been named or properly intervened in the underlying lawsuit. Accordingly, the Court held that plaintiff had no probability of prevailing and could not defeat an anti-SLAPP motion.

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Background

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Pierre Richard (the plaintiff) and Louise Clare were beneficiaries of the Bennett Trust. Denise Tukes is Louise’s daughter. The Bennett Trust and the Pitts Trust co-owned real property and agreed to its sale in 2006. However, over a decade passed with no progress on the sale. Initially to aid her mother and then based on a promise from the trustees, Tukes committed herself to finding a buyer for the property. Tukes dedicated herself full time, going as far as dropping out of college. Eventually, she succeeded in finding a buyer, and the property sold for $13 million. When Tukes asked the trustees for a finder’s fee, they declined.

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Tukes filed suit in 2018, naming the trustees of each trust only. Although he was not named in the suit, Richard filed an answer. As a beneficiary of the Bennett Trust, Richard sought to defend against the claims to protect his own interests in the trust. Richard did not seek leave of court to intervene in the case, nor did the other parties recognize him as a party to the suit. The trial court subsequently designated Richard as a “non-party.” In 2019, Tukes filed a request for dismissal as to the Bennett Trustee and “any claims against Richard.” The case was then moved to federal court where it eventually settled. Tukes filed a dismissal with prejudice as to the Pitts Trustee.

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In December of 2019, believing that the initial suit against the trustees by Tukes was frivolous—despite never having actually been sued by Tukes—Richard filed a malicious prosecution claim against Tukes and her attorney, Frieden. In response, Tukes and Frieden filed anti-SLAPP motions pursuant to Cal. Code of Civil procedure (“CCP”) § 425.16(b)(1). They argued that filing the Tukes action for a finder’s fee was protected petitioning activity, and, as a non-party therein, Richards lacked standing and thus could not show a probability of prevailing on a claim for malicious prosecution. The trial court agreed. The trial court granted Tukes and Frieden $49,071.50 and $26,905 in attorney fees, respectively. Richard appealed.

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The Appeal

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The Court of Appeal upheld the trial court’s decision, finding that Richard was not a party to the underlying action and therefore lacked standing to bring a malicious prosecution claim. The Second District Court of Appeal stated that an individual not named may seek leave to intervene in a suit, but doing so requires the party wishing to join the suit to obtain the Court’s permission. Richard failed to do so.

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Alternatively, courts have excused an interested parties’ failure to ask for permission to join a suit where the other parties to the suit have accepted the intervention. In Traweek v. Draper, (1956) Cal.App2d 119, 122, the failure to comply with CCP § 387 was excused because the parties treated the complaint of a non-party as being valid. Similarly, in Tyrell v. Baldwin, (1885) 67 Cal. 1, individuals not named in the original complaint filed an answer and were acknowledged by the plaintiffs as being parties to the suit. When judgement was rendered against the new defendants, they challenged their status as parties. The appellate court in Tyrell rejected the challenge of the new defendants, stating that they had been successful in their intervention “… by tacit consent”. Id. No such facts exist here. Richard was not accepted into the suit by the parties and was deemed a “non-party” by the court.

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The Takeaway

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Proper intervention by an individual into a matter can be attained via CCP § 387 or, in certain circumstances, by the behavior of the parties. Failing to properly intervene in an action that concerns your rights or your client’s rights can have severe consequences down the road. As such, when faced with a case that matters to you, seek leave to intervene from the court.    

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About the Authors:

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Carl I. S. Mueller is a business litigation attorney that represents clients in all phases of civil litigation. Mr. Mueller’s practice has a focus on attorney-client disputes of all kinds. If you have questions regarding this article contact Carl Mueller at cmueller@maloneyfirm.com.

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Gustavo Silvestre Boldrini is an associate in the firm’s business litigation group. He is experienced in all aspects of litigation, including early case strategy and evaluation, discovery, depositions, law and motion practice, mediations, and trial preparation.

Join Us in Welcoming Gustavo Silvestre Boldrini to the Maloney Firm

The Maloney Firm is pleased to welcome Gustavo Silvestre Boldrini to our Litigation Department.

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Prior to joining The Maloney Firm, Gustavo’s practice included defense of national insurance carriers in personal injury actions, insurance fraud investigations, and insurance coverage determinations. He is experienced in all aspects of litigation, including early case strategy and evaluation, discovery, depositions, law and motion practice, mediations, and trial preparation. Originally from Brazil, Gustavo speaks fluent Portuguese and conversational Spanish, allowing him to communicate effectively with clients and witnesses.

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Learn more about Gustavo’s practice here.

SF and LA County District Attorneys Wage War Against Potter Handy LLP Over Meritless Disability Lawsuits; Provide Roadmap For Private Defendants To Defeat Claims

By Carl Mueller, Esq., The Maloney Firm, APC

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Potter Handy LLP (“Potter Handy”) has long been a scourge to Southern California small businesses. Using repeat “serial filers,” Potter Handy has filed thousands of lawsuits against small businesses under the Americans with Disabilities Act (“ADA”) and the California Unruh Civil Rights Act (“Unruh Act”). While ADA legislation applies nationwide, Potter Handy’s business model succeeds in California because violations of the Unruh Act result in $4000 civil penalties. According to a recent lawsuit, Potter Handy leverages the Unruh Act’s civil penalty—and a prevailing party attorney’s fees provision—to bully defendants into settling lawsuits, regardless of the lawsuits’ merit. Undoubtedly, the ADA and Unruh Act ensure necessary access for disabled Americans; however, Potter Handy’s abuse of their statutory schemes serves only themselves at the expense of small businesses.

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The California legislature has attempted to curb this abuse of the Unruh Act in the past, making it more difficult for serial filers to bring claims for construction-related barriers in California’s state courts. However, these procedural rules do not apply to claims filed in Federal Courts, which has led Potter Handy—and many other serial ADA/Unruh Act case filers—to relocate its construction-related cases to Federal Court.

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People of State of California v. Potter Handy LLP

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Ultimately, the California legislature has failed to protect the public from predatory law firms like Potter Handy. Because the legislature has not found an effective solution, the District Attorneys for the Counties of Los Angeles and San Francisco (together, the “DAs”) sued Potter Handy to stop its abusive practices. The lawsuit, styled as People of State of California v. Potter Handy LLP, et al, San Francisco Superior Court Case No. CGC-22-599079, alleges that Potter Handy violated Bus. & Prof. Code § 17200 in its repeated filings of ADA and Unruh Act claims in federal court. Specifically, the DAs allege that Potter Handy and its attorneys violated Bus. & Prof. Code § 6128(a)’s bar on deceiving the courts, as well as Cal. Rules of Professional Conduct 3.1 (requirement of bringing meritorious actions) and 3.3 (duty of candor to the court) by making false claims relating to standing under the ADA and Unruh Act. The DAs claim that Potter Handy’s repeated and intentional breaches of these laws and rules form the basis of the civil claim under Bus. & Prof. Code § 17200.

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The Takeaway

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This lawsuit presents hope and practical help to California’s business owners trying to avoid paying Potter Handy’s settlement demands. While the DAs may succeed in this lawsuit, it’s impossible to predict the outcome of any litigation. Rather, the real value of the complaint is the detailed legal and factual analysis of Potter Handy’s litigation weaknesses. The DAs’ complaint provides a veritable roadmap to defend against Potter Handy’s lawsuits. Even if the DAs’ lawsuit ultimately fails, the research and investigation shortcuts provided in the complaint makes defending against Potter Handy more cost effective for all litigants moving forward.

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However, the economics of the situation remain unchanged, and still heavily favor Potter Handy. As observed in the DAs’ complaint:

Because it regularly costs between $50,000 and $100,000 to defend against an ADA/Unruh lawsuit, small “mom and pop” businesses have little choice but to submit and pay Potter Handy to leave them alone.

While the DAs’ complaint can’t effectively stop Potter Handy right now (indeed, Potter Handy seems determined to defend the case, having already filed papers seeking to have the lawsuit dismissed), hopefully it will help a few businesses defend against Potter Handy in the short term. Over time, the DAs may prove the winner, simply by making it harder for Potter Handy to bully California’s small business owners into settling meritless claims.

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About the Author:

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Carl Mueller is a business litigation attorney that represents clients in all phases of civil litigation. Mr. Mueller’s practice has a focus on attorney-client disputes of all kinds. If you have questions regarding this article contact Carl Mueller at cmueller@maloneyfirm.com.

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Patrick Maloney Named “Legal Visionary” by the 2022 LA Times Business of Law Magazine

Congratulations to our Founding Partner Patrick Maloney, who has been profiled in the LA Times’s 2022 Business of Law Magazine as a “Legal Visionary.” Read his full profile at this link.

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This month, Patrick and the Maloney Firm also celebrated the firm’s tenth anniversary, and firm attorneys Gregory SmithCarl Mueller, and Elizabeth Schaus‘s selections to the 2022 Super Lawyers Rising Stars list

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Minimum Wage Rates Scheduled to Increase Across California on July 1, 2022

On July 1, 2022, minimum wages in several cities and localities across California are scheduled to increase. Employers should comply with local wage rates and update their minimum wage postings accordingly.*

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Learn more about minimum wage rates across California at:

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*With some exceptions, California Employees must be paid the minimum wage as required by state law. Many local entities in California (ie. cities and counties) have adopted ordinances establishing a higher minimum wage rate for employees working within their jurisdiction. When local minimum wage rates exceed the state minimum wage, employers are required to comply with the local wage rate.

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Celebrating The Maloney Firm’s 10th Anniversary

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This June, we proudly celebrate The Maloney Firm’s 10th anniversary. We extend our sincere gratitude to the nearly 700 clients from across the globe who have entrusted us with their legal needs, and we look forward to many more years of success.

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Join Us in Welcoming Dylan Blakeley to the Maloney Firm

The Maloney Firm is pleased to welcome Dylan P. Blakeley to our Litigation Department.

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Prior to joining the Maloney Firm, Dylan worked as a Judicial Law Clerk for the Honorable Steven J. Kleifield of the Los Angeles Superior Court. Dylan also has prior experience at a boutique firm, where he handled various litigation matters at every stage concerning intellectual property, contract, and property disputes.

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Click here to learn more about Dylan’s practice.

Cal/OSHA Readopts and Updates COVID-19 Emergency Temporary Standards

On April 21, 2022, the California Occupational Safety and Health Standards Board (OSHSB) approved an updated third readoption of the Emergency Temporary Standards for COVID-19 Prevention (ETS). This iteration of the ETS will take effect on May 6, 2022, and will expire on December 31, 2022. Learn more about the most significant updates to the ETS below, and view a redlined draft copy of the updated ETS language here.

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Removal of Definition for “Fully Vaccinated” Employees

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Previous iterations of the ETS distinguished between fully vaccinated and not fully vaccinated employees for the purposes of testing, face covering, and other such requirements. Significantly, the readopted ETS removes the definition for “fully vaccinated” employees, which carries significant implications for face covering, respirator, and testing requirements, amongst others.

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Note: For high-risk settings and other specified circumstances, the CDPH continues to distinguish between individuals based on vaccination status in determining close contact, exclusion, return-to-work, and other requirements. Learn more below and at this link.

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Face Coverings/Respirators

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Employers must provide all employees, regardless of vaccination status, with respirators upon request, and provide these employees with effective training and instruction related to these respirators.

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Employees are required to wear face coverings when required by an order from the CDPH. Currently, employees are not required to wear face coverings in the workplace except when they are subject to certain return to work requirements or in certain outbreak settings. Employees who are not fully vaccinated are no longer required to wear face coverings while indoors or in vehicles unless they are subject to a CDPH order.

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Testing

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Employers must make testing available at no cost during paid time to all employees with COVID-19 symptoms, regardless of vaccination status, except for “returned cases.” (Learn more about “returned cases” below.)

New Definition: “Returned Cases”

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Although the readopted ETS eliminates the distinction between fully vaccinated and not fully vaccinated employees, it adds a new category for employees who are “returned cases.” A “returned case” is a COVID-19 case who returned to work pursuant to the applicable return to work requirements and did not develop any COVID-19 symptoms after returning. A person may only be considered a “returned case” for 90 days after the initial onset of COVID-19 symptoms, or for, individuals who never developed symptoms, for 90 days after the first positive test.

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Employers are not required to make COVID-19 testing available to employees considered “returned cases.” Further, asymptomatic “returned cases” are not required to test for COVID-19 after they are part of an “exposed group” in the workplace.

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Close Contacts, Exclusion, and Return to Work

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The new ETS defers to the California Department of Public Health (CDPH) to set the standards for responding to close contacts, and for exclusion and return to work requirements. View these standards on the CDPH’s COVID-19 website, linked here.

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Self-Administered COVID-19 Tests

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Under most circumstances, employees must take a COVID-19 test to satisfy the ETS’s return to work criteria. The new ETS allows these tests to be self-administered and self-read if another means of independent verification can be provided, such as a time-stamped photograph of the test results.

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Elimination of “Light Test” for Face Coverings

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Under the most recent iteration of the ETS, face coverings were required to be constructed of fabrics that “do not let light pass through when held up to a light source.” The updated ETS removes this requirement.

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Elimination of Cleaning and Disinfection Requirements

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The prior version of the ETS required employers to implement certain cleaning and disinfection procedures, such as cleaning areas and equipment used by a COVID-19 case during their high risk exposure period. The updated ETS eliminates these cleaning and disinfection requirements.

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Outbreaks and Major Outbreaks

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For the purposes of determining when an “outbreak” or “major outbreak” has occurred, the term “infectious period” has replaced “high-risk exposure period.” This update is not substantive; it simply aligns ETS language with CDPH language.

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Resources for California Employers

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In the coming weeks, employers should update their COVID-19 Prevention Plans to come into compliance with Cal/OSHA’s updated ETS, and continue monitoring the CDPH website for changes to exclusion, return to work, face covering, and other requirements. As always, employers should stay abreast of mandates from local jurisdictions, which may be more restrictive.

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Access a redlined draft version of the updated ETS here.

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Access the CDPH’s Guidance on Isolation and Quarantine for COVID-19 here.

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If you have questions regarding this article, please contact Patrick Maloney or Lisa Von Eschen of the Maloney Firm’s Employment Law Department.

Congratulations to Our Attorneys Selected to the 2022 Super Lawyers Rising Stars List

The Maloney Firm is pleased to congratulate Gregory Smith, Elizabeth Schaus, and Carl Mueller on their selection to the 2022 Southern California Rising Stars list. Each year, no more than 2.5 percent of the lawyers across California are selected by the research team at Super Lawyers to receive this honor.

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Carl has now been named to the Southern California Rising Stars list for three years in a row. Elizabeth, who joined the firm this year, has been recognized on the list for the past four years. Greg has been named to the Rising Stars list for seven years in a row, and has earned the further distinction of being selected to the Up-and-Coming 100 list for the past three years.

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Firm attorneys Patrick Maloney and Lisa Von Eschen have also consistently been recognized by Southern California Super Lawyers.

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Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

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The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in the practice of law. For more information about Super Lawyers, visit SuperLawyers.com.

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Biden Signs Bill Banning Mandatory Arbitration of Sexual Assault and Harassment Claims

On Thursday, March 3, President Biden signed into law HR 4445, the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” which prohibits mandatory arbitration for sexual assault and harassment claims in the workplace.

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The bill amends the Federal Arbitration Act (FAA) to allow employees and representatives of class or collective actions to choose to void pre-dispute arbitration agreements and joint-action waivers for all sexual harassment and sexual assault claims. While the law prohibits employees and other parties from being compelled to arbitrate their sexual harassment and sexual assault claims, these parties may still choose to arbitrate such claims after the dispute has arisen.

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Although the law applies retroactively to agreements that predate the enactment of the law, disputes and claims that arose or accrued before the enactment of HR 4445 are not covered by its provisions. Instead, HR 4445 applies “with respect to any dispute or claim that arises or accrues on or after” March 3, 2022.

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Importantly, courts—as opposed to arbitrators—must determine under Federal law the validity or enforceability of an applicable agreement, in spite of any terms within the agreement to the contrary.

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The bill defines “sexual harassment dispute” to mean “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, and State law.”  “Sexual assault dispute” is defined as “involving a nonconsensual sexual act or sexual contact.” Pre-dispute mandatory arbitration agreements of sex discrimination claims or claims based on other protected categories like age, race, or religion are not affected by the new law.

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If you have questions regarding this article, please contact Patrick Maloney or Lisa Von Eschen of the Maloney Firms Employment Law Department.

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