Colby A. Meagle Joins The Maloney Firm

We are thrilled to announce the addition of Colby A. Meagle to The Maloney Firm’s team of experienced litigation attorneys. With her diverse legal background and artist’s sensibility, Colby will provide innovative solutions for our clients across various industries and practice areas.


Colby’s experience spans employment litigation, business law, intellectual property, and dispute resolution. She has represented fashion, entertainment, startup, and corporate clients in trademark, copyright, wage, business matters, and beyond. Her specialized knowledge of art law has seen her work on behalf of artists, galleries, collectors, and arts organizations.


When she’s not practicing law, Colby can be found exploring museums, spending time at the beach, or pursuing her own artistic interests. She is a graduate of Pepperdine University School of Law and Elon University, where she studied Fine Arts.


Incisive Review of Hybrid Fee Agreement Saves Clients $700K in Dispute

A “hybrid” fee refers to any combination of fees for legal services. Among these fee arrangements are contingency fees, flat or fixed fees, success fees, retainers, and hourly fees. The Maloney Firm regularly handles fee disputes resulting from poorly drafted contingent fee agreements. We also counsel law firms and prospective clients while negotiating fee agreements to ensure they are fair and enforceable.

In recent years, we have seen an uptick in matters disputing the calculation of contingent fees. This is no doubt a result of how complicated contingent fee arrangements have become. Some fee disputes now include “negative” contingent fees (i.e., the fee earned is based upon how much money the attorney saves the client), ambiguous fee agreements (i.e., where the terms are difficult to understand and are more likely to be disputed by parties later), contingent fee agreements covering multiple matters, and more.

In late 2023, a group of clients who had been involved in a partnership contacted Patrick Maloney with a dispute over the amount of legal fees that were owing under a hybrid fee agreement into which they had entered. In this instance, the parties’ hybrid fee agreement called for a reduced hourly fee and a contingent fee. While the fee agreement provided the lawyers would receive a fee calculated on the value of the recovery, the agreement did not carefully and adequately define how this contingent fee would be calculated if the settlement included the purchase and sale of business interests – a common settlement in business disputes.

The underlying matter involved a dispute between partners who jointly owned a business. They settled their dispute when one side agreed to purchase the other’s interests in the business. Based solely on the sales price, the lawyers claimed a contingent fee of nearly $1 million. In calculating the fee they claimed, the lawyers ignored the value of the business interests the clients gave up in the settlement.

The Maloney Firm’s careful review of the legal fee agreement uncovered errors in its drafting. Typically, when preparing fee agreements, lawyers contemplate their client may enter a settlement through which they receiver non-monetary consideration. In those instances, the lawyer and client typically agree to a valuation methodology. But lawyers less frequently prospectively address how to determine a contingent fee when the parties enter a settlement with a more sophisticated structure, such as the purchase or sale of business interests, supply contracts, or any other form of business resolution. The fee agreement the Maloney Firm’s clients entered simply referred to “economic value” and “recovery value.” This allowed the Maloney Firm to argue the client had received no “recovery value” because the clients simply sold their business interests for the same amount they had paid for those interests.

Relying upon relevant statutes and case law to demonstrate the flaws in the lawyers’ retainer agreement and arguments, Mr. Maloney negotiated a settlement saving the clients nearly $700,000. Best of all, this significant victory was obtained without the burden and expense of protracted litigation. 

Successes such as these highlight the importance of properly defining how contingent fees will be calculated. A lack of clarity in fee agreements can result in significant monetary discrepancies and potential exploitation by attorneys. To ensure fair and enforceable fee agreements, consult with attorneys experienced in the nuances of contemporary contingent and hybrid fee agreements. For more information on the proper drafting of contingent fee agreements or for help with fee agreement disputes, contact Patrick Maloney and subscribe to The Maloney Firm’s newsletter.

Electronic Signature on Arbitration Agreements? Not So Fast

Hasty v. AAA and Unconscionable Arbitration Agreements  

Arbitration agreements may be invalidated if they are found to be unfair or oppressive towards a disadvantaged party. The determination of whether an arbitration agreement is unconscionable is based on both procedural factors (how the agreement was made) and substantive factors (the terms of the agreement itself). To be valid, employment arbitration agreements should include voluntary and informed consent, adequate notification, clear and easily understandable language, and other essential elements. A recent case heard by the California Court of Appeal suggests that employers should take particular care with the presentation of arbitration agreements to their employees, especially considering the possibility that these agreements may be viewed and signed on electronic devices of various sizes and formats.


Aljarice Hasty was hired by the American Automobile Association (“AAA”) as an insurance sales agent in March 2019.  Hasty’s verbal offer did not include any reference to an arbitration agreement, but she later received an offer letter which stated that she would need to sign an arbitration agreement the “first day of her employment.”  Prior to starting her job with AAA, Hasty received an email with a link to a Workday, a “new hire onboarding portal,” containing electronic forms, including an arbitration agreement. Because Hasty did not have a desktop or laptop computer, she used her phone to view and sign the Workday documents in the application.


When Hasty later sued AAA for discrimination, harassment, retaliation, and wrongful discharge, AAA moved to compel arbitration pursuant to the arbitration agreement that Hasty had electronically signed in Workday. The trial court found the arbitration agreement was valid, but also that it was unconscionable and therefore unenforceable.  AAA appealed. The Court of Appeal affirmed the trial court’s ruling.


The Court of Appeal found that Hasty had plenty of time to review the agreement and consult with an attorney before filing. Because of this, the court ruled the arbitration agreement did not contain elements of oppression. However, the arbitration agreement did contain elements of surprise, largely due to the manner in which it was presented to Hasty. The court found the that the arbitration agreement—when viewed through the Workday platform on a mobile phone—was dense, difficult to read, and contained an excess of legal jargon.


A handful of elements were cited by the court as examples of the agreement’s procedural unconscionability. Firstly, no alternative means of presentation was presented to Hasty for viewing and signing the arbitration agreement—whether physically, or through a different device. Additionally, the presentation of the documents through the Workday platform lacked instructions on how to view the agreement and allowed for an employee to click “I Agree” without first viewing the arbitration agreement. Finally, the signature statement in Workday simply refers to a “document” without mentioning the arbitration agreement specifically, therefore creating ambiguity as to what document is being signed.


The court also found that the arbitration agreement was substantively unconscionable. The court found several one-sided provisions, including a hidden waiver of remedies and relief from a charge filed with a governmental administrative agency. It also required a confidential arbitration, which may prevent employees using previous findings to prove a pattern of discrimination and discourage employees to pursue claims in the first place. The arbitration agreement also contained a waiver of representative claims, which is unconscionable because it requires an employee to waive what is an unwaivable claim in California.

Key Takeaways

Hasty has several implications for businesses employing personnel in California. In order to ensure an arbitration agreement is enforceable, employers should seek to maintain consistency and transparency in all stages of employee onboarding. Other areas of concern for California employers:

  • The elements of all offers should be consistent regarding deadlines and requirements for viewing and signing an arbitration agreement.
  • Electronically delivered arbitration agreements must be handled with particular care, and employers should ask employees ahead of time if they have access to a computer or, if not, if they will be viewing the arbitration agreement on a mobile phone. In the absence of an available computer, alternative arrangements for viewing and signing the arbitration agreement should be made (either by physical examination or through the use of another device).
  • Third party vendors of software that will be used for processing employee paperwork should be checked to determine if it complies to the presentation and transparency requirements of California law.
  • Employers should not depend upon third party vendors to be up to date on the nuances of arbitration agreement conscionability under California law
  • Employers must check and review all employee paperwork on a variety of screens to ensure the legibility of documents is of good quality before sending to an employee.
  • Employers should consider offering alternative options for the viewing and signing of employment agreements.

To ensure the enforceability of arbitration agreements, California employers must consider the craft of the agreement as being of equal importance to the clarity of its presentation.

Media Mention: Patrick Maloney Weighs in on High Stakes RICO Claim in Law 360

Patrick Maloney was quoted in a recent Law 360 article detailing the latest round of a dispute between rival developers and the applicability of California’s Environmental Quality Act (CEQA) to a high stakes RICO claim. The matter before the 9th Circuit Court of appeals concerns Los Angeles hotel developer Relevant Group LLC’s appeal of a lower court’s decision that a rival developer was shielded from racketeering claims by CEQA’s Noerr-Pennington doctrine.

Relevant Group’s appeal drew a response from a coalition of environmental interest groups. The groups argue the California Legislature has sought to balance CEQA to allow for public participation in the environmental review process. Overturning the lower court’s ruling and allowing for an exception to the Noerr-Pennington doctrine might have a chilling effect on individuals thinking about filing future CEQA complaints.

Patrick Maloney praised the environmental interest group’s brief in comments to Law360 Thursday, underscoring that Relevant should bring its concerns about the CEQA process to the California Legislature instead of the courts. Read the full article on Law 360 here.

Suing for Legal Malpractice? Designate the Plaintiff(s) Carefully

An opinion recently published by California’s Second Appellate District, Engel v. Pech, 95 Cal.App.5th 1227 (2023), reinforces that when counsel for a corporate entity commits malpractice, it is the entity itself – not the owners – that must bring the malpractice claim.

The Facts: An Individual Sues in Place of an LLP

A partnership, Engel & Engel LLP (LLP), hired an attorney (Pech) to represent it in litigation. The retainer agreement between Pech and the partnership was signed by both the LLP and one of its partners (Engel), in his individual capacity. The agreement specified the scope of the attorney’s work was limited to the representation of the LLP itself in litigation. 

When the LLP lost the case, Engel personally, not the LLP, timely sued Pech for malpractice. The LLP was not a party to the lawsuit Engel filed. Later, after the LLP’s statute of limitations on malpractice claims had lapsed, Engel attempted to amend his complaint and add the LLP as a second plaintiff.

Pech filed a demurrer challenging the amended complaint, stating that Engel had no basis for filing for malpractice because the LLP was Pech’s sole client in the litigation and thus only the LLP itself had standing to sue for malpractice.  Further, although the LLP was later added as a plaintiff, its statute of limitations had expired. 

The trial court agreed with both points and dismissed the case.

Court of Appeal: LLP’s Claim Time-Barred and Distinct from Individual Claim

Though Engel appealed, the California Court of Appeal affirmed the lower court’s decision. After confirming the statute of limitations for the LLP’s malpractice claim had run, the court ruled Engel’s attempt to amend the complaint and add the LLP as a plaintiff was invalid because it did not meet the requirements for relating back to the filing date of the original complaint. Though amended complaints may in some instances relate back to the date of filing of the original complaint, they must rest on the same general set of facts and the same injury. Amendments involving a new plaintiff (the LLP) do not automatically relate back because in many instances they do not seek vindication of the same rights asserted by the original plaintiff.

Affirming the trial court’s ruling, the Court of Appeal held Pech’s legal liability or obligation to the LLP was distinct from his legal liability to Engel. Specifically, the retainer agreement stated Pech represented only the LLP in the underlying litigation. Therefore, only the LLP could have suffered damages attributable to Pech’s malpractice, stating” only the partnership has potentially viable claims for malpractice” (2) and “because the LLP’s potentially viable claims for malpractice are a property acquired by the partnership and not of the partners individually . . . the LLP’s malpractice claims belong solely to the LLP and not to Engel.” Id. at 1241.

Key Takeaways

Engel v. Pech reinforces the important concept of the legal distinction between a business entity and its owners. This is of particular importance pursuing claims against attorneys for malpractice when there are both legal entities and individuals involved. Any claims arising from a lawyer’s errors may belong to the entity alone, the individuals alone, or some combination of the two, depending upon the structure of the retainer agreement and how the case was originally filed. Due to the waiver of the attorney client privilege that comes with the filing of any malpractice lawsuit, other cases hold that the right to bring a malpractice claim cannot be assigned or transferred. Coupled with the short statute of limitations for legal malpractice claims, it is critically important to take care to ensure the right party is designated as the plaintiff.

If contemplating a legal malpractice action, it is crucial to review the retainer agreement between all parties, as well as the complaint in the underlying case. to determine how to properly file a claim within the allowed timeframe. For questions regarding any potential legal malpractice issue, contact the attorneys at the Maloney Firm.

Maloney Firm Attorneys Secure Victory as California Court of Appeal Upholds Demurrer in Fiduciary Duty Case

On January 18, 2024, The Maloney Firm’s attorneys Carl Mueller and Gary Varnavides achieved a resounding victory for their client before the California Court of Appeal, resolving a multi-year litigation entirely in their client’s favor.

The case involved their client’s receipt of approximately $1.2 million in cash and securities held in Wells Fargo brokerage accounts from the client’s lifelong friend after the friend died in 2018. In 2020, the plaintiff, the friend’s grandson, filed suit against The Maloney Firm’s client, Wells Fargo, and others asserting claims for breach of fiduciary duty and breach of constructive trust in a bid to obtain a share of the brokerage accounts. In the suit, the plaintiff claimed that he was entitled to the assets in the brokerage accounts because they were held in trust for him and other unspecified beneficiaries.

At the trial court level, The Maloney Firm successfully obtained a dismissal of the plaintiff’s claims, following multiple demurrers. Plaintiff appealed. The complex appeal touched on issues involving California’s probate and banking laws and fiduciary duties.

The Court of Appeal denied plaintiff’s appeal in its entirety and affirmed the trial court’s dismissal, with prejudice. In its Opinion, the Court of Appeal found that plaintiff’s claims wholly failed to properly allege the nature and existence of specified trust beneficiaries and, therefore, plaintiff’s claims failed in their entirety.

The Maloney Firm is pleased to achieve such a complete victory for their client so he can finally put years of litigation behind him.

The case is Stordahl vs. Johnson, Wells Fargo Clearing Services, LLC, et al., Appeal No. B324765, B326356 (CA Ct. of Appeal, Second Appellate District, Division Four).

Maloney Firm Attorneys Recognized as 2024 Southern California Super Lawyers®

The Maloney Firm is pleased to announce that two of our attorneys have been recognized as Super Lawyers in Southern California for 2024. The list includes outstanding lawyers with a excellent peer recognition and achievement in their practice areas. Maloney Firm attorneys Patrick Maloney and Gregory Smith have been recognized this year by Super Lawyers as among the top rated Business Litigation attorneys in Southern California.

About Super Lawyers

Super Lawyers, part of Thomson Reuters, 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 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 comprehensive and diverse listing of exceptional attorneys.

About the Maloney Firm

The Maloney Firm represents clients in trials, arbitrations, and appeals in state and federal courts, and also regularly counsels clients on a wide range of business matters delivering cost-effective solutions for their legal needs.

Clients of The Maloney Firm receive expertise in and outside of court, even when up against larger, national firms. Always looking out for its clients’ best interests, The Maloney Firm provides significant expertise without significant cost.

Happy New Year! California Litigants Now May Be Obligated to Exchange Initial Discovery Disclosures

For cases filed after January 1, 2024, CCP §2016.090 now includes new rules for initial disclosures of information in discovery.

Timing and Trigger of Initial Disclosures

Any party that has appeared in the litigation may demand that all parties make disclosures 60 days thereafter.  This shortened timeline is intended to encourage early information sharing and foster a more collaborative approach to discovery.  However, disclosures are not required if no demand is made, so parties might be encouraged to reach alternative agreements instead of making such a demand and putting all parties “on the clock.”

Content and Terms of Initial Disclosures

The prior version of CCP §2016.090, authorized the Court to order parties to provide initial disclosures within 45 days of a demand. The amendment to the Discovery Act now removes the need for the court’s intervention and specifies content that must be included in initial disclosures. Parties must disclose:

  1. Names and contact information of individuals likely to have relevant, discoverable information regarding disputed claims or defenses (not including expert witnesses, consultants, or information that is to be used solely for impeachment);
  2. A brief description of the nature and substance of each party’s claims and defenses; and
  3. Copies or descriptions of documents, electronic data, or other tangible items that support each party’s claims or defenses.

The amendment explicitly states that a party cannot avoid the obligation to provide initial disclosures based on reasons such as incomplete case investigation. It also prohibits disputing the adequacy of another party’s disclosures or the non-compliance of another party in making their disclosures.

Exceptions and Limitations to Initial Disclosures

There are some exceptions and limitations to the new initial disclosure rules. For example, the procedure for initial disclosures does not apply to parties who are not represented by counsel, nor does it apply to unlawful detainer actions, small claims actions, or actions brought under the Family or Probate Codes. Additionally, the court may grant an extension of time to provide initial disclosures for good cause shown.

The Courts will also likely have to answer some questions left open by revised statute. For example, are there obligations of a late-added party to make disclosures without an additional demand from the prior parties?

Key Takeaways

The objective of the newly enacted initial disclosure provisions is ostensibly to reduce litigation expenses and, possibly, encourage quicker resolutions to litigation. When parties are required to disclose the factual bases for their allegations at the start of the litigation process, unsupported claims may be identified more quickly. Parties may then be able to cut short the protracted timelines of traditional discovery and shorten the overall length of litigation (and size of attorney’s fees).

The objective of the newly enacted initial disclosure provisions is ostensibly to reduce litigation expenses and, possibly, encourage quicker resolutions to litigation. When parties are required to disclose the factual bases for their allegations at the start of the litigation process, unsupported claims may be identified more quickly. Parties may then be able to cut short the protracted timelines of traditional discovery and shorten the overall length of litigation (and size of attorney’s fees).

More comprehensive responses to initial disclosures can encourage parties to better assess the strengths and weaknesses of their cases at the outset, and experienced practitioners indeed may use these additional tools to efficiently streamline their cases. However, these disclosure requirements may end up introducing more inefficiencies into the discovery process. Since parties may still demand up to four supplemental disclosures, along with the initial disclosures, it is possible the initial disclosures will only add to the tasks required in the discovery process. There is nothing to prevent parties from demanding these new initial disclosures, up to four supplemental disclosures, and also issue regular discovery requests.

California Court of Appeal Issues Rare Reversal of Arbitration Award Based on Arbitrator Bias

By Carl I.S. Mueller, Esq. and Gary A. Varnavides, Esq.

Download a PDF version of this article here

One of the many benefits or drawbacks of arbitration awards is that they are “nearly immune” from challenge on appeal; but, the Court of Appeal recently determined that arbitrator bias due to a non-native English speaker party’s use of a translator provides a basis to overturn an award. On October 17, 2023, the California Court of Appeal published its decision in FCM Investments, LLC v. Grove Pham, LLC, which featured a rare reversal of an arbitration award for $10 million following the failed sale of a nursing home business. The Court of Appeal ruled that the arbitrator demonstrated impermissible bias towards a respondent, an immigrant, by making adverse credibility determinations solely because the respondent testified through an interpreter.

In the underlying claim, plaintiff FCM alleged that defendant Grove breached certain contractual obligations and terminated the deal to sell a nursing home before escrow closed. FCM filed suit and the parties participated in a two-day arbitration in June 2021.

The arbitrator ruled in FCM’s favor, awarding approximately $10 million in damages. The arbitrator found that although the transaction was “rather complicated,” her decision was “made easier” because she believed Grove’s owners suffered “rampant and obvious” credibility issues. With respect to Phuong Pham, the arbitrator wrote:

“Mrs. Pham’s use of an interpreter appeared to the Arbitrator to be a ploy to appear less sophisticated than she really is.”

As expected, the trial court entered judgment on the arbitration award. But the Court of Appeal reversed, vacating the award. Though “arbitration awards are ‘nearly immune’ from attack,” the Court of Appeal found the arbitrator’s adverse credibility determinations were the product of racial bias and rose to the level of “misconduct.”

The FCM Investments, LLC, decision discusses a range of legal issues pertaining to arbitration, bias, and appellate procedure, making the decision a must read for lawyers practicing in these areas. But the heart of the case is the Court of Appeal’s focus on racial bias. Rule 8.4.1 of the California Rules of Professional Conduct prohibits discrimination in the legal profession. Lawyers must familiarize themselves with this rule, and the potential for bar discipline for violating it. Attorneys should also appreciate that if they make impermissible arguments based on a party’s or witness’ membership in a protected category, their clients may pay a heavy price, including an appellate reversal of a favorable award and the burden of starting over at square one.

About the Authors:


Carl I.S. Mueller is a business litigation attorney that represents clients in all phases of civil litigation in California and Oregon. 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


Gary A. Varnavides has extensive experience representing and advising a diverse array of clients in a wide range of commercial litigation matters and governmental and regulatory investigations. He is licensed in New York and California and can be reached at


Carl Mueller Obtains Complete Victory in Attorneys’ Fees Jury Trial

On October 10, 2023, a Los Angeles Superior Court jury returned a verdict in favor of a law firm represented by Carl Mueller. Mr. Mueller singlehandedly took on a defense team of three experienced attorneys from a prominent firm, funded by a billionaire client. Though outnumbered, Mr. Mueller was not overmatched. Mr. Mueller persuaded the jury to award his client every penny of the unpaid legal fees and costs, as well as an award of interest.