The Maloney Firm is proud to announce that Patrick M. Maloney and Lisa Von Eschen have been selected to the 2020 Southern California Super Lawyers® list in their practice areas. Each year, no more than five percent of attorneys are recognized by Super Lawyers as the top attorneys in their fields.
 
Patrick M. Maloney – Business Litigation and Professional Liability;
 
Lisa Von Eschen – Employment.
 
 
About Super Lawyers
 
Super Lawyers 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.

By Patrick Maloney and Sam Fogas, The Maloney Firm, APC
 
Mandatory Fee Arbitration under Business & Professions Code § 6200 et seq. often provides an efficient means for attorneys and clients to resolve disputes concerning unpaid legal fees. Where either party is unhappy with the arbitration results, the dissatisfied party is entitled to seek review of the award through a trial de novo.
 
The deadline for seeking a trial de novo has been subject to some uncertainty, which was recently clarified by the California Court of Appeal in Soni v. Simplelayers, Inc., a case published by the Second Appellate District on December 3, 2019. Confusion concerning the deadline for seeking a trial de novo arose from a lack of clarity about whether the deadline for seeking such relief was to be extended when the award was service by mail. Under California Code of Civil Procedure § 1013, in certain instances service by mail provides an automatic five-day extension of any resulting deadlines. The vast majority of awards issued in Mandatory Fee Arbitration are served on the participants by mail.
 
In Soni, the Court of Appeal held that the deadline for seeking a trial de novo is 30 days after the date on which the arbitration award is served, irrespective of the manner of service. As the Court explained, mail service occurs when an item is deposited in the mail for service, not upon its arrival. The Court held the deadline for requesting a trial de novo is 30 days after the award is deposited in mail. The 30-day deadline is not extended by the fact of mail service.
 
Following Soni, parties to a non-binding Mandatory Fee Arbitration should carefully review the date on which the agency administering the fee arbitration served the award and calendar the deadline for seeking a trial de novo 30 days from the actual date of service of the award, irrespective of the manner of service of the award or the date on which the award arrives.
 
About the Authors: Patrick Maloney and Sam Fogas
 
The founding shareholder of The Maloney Firm, APC, Mr. Maloney represents attorneys and clients in disputes over legal fees and legal malpractice. Mr. Fogas is a civil litigation attorney at The Maloney Firm, APC. If you have questions regarding this article, contact Patrick Maloney at pmaloney@maloneyfirm.com and sfogas@maloneyfirm.com.
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For employers in the Golden State, 2019 brought no shortage of employment law changes. Some highlights include reclassification of thousands of gig workers as employees, minimum wage increases and more lactation accommodations. Start the New Year right by staying informed about recent employment law developments.
 
Click here to read The Maloney Firm’s 2020 California Employment Law Update.

Join our South Bay MCLE Series & Complete your Credits in
Ethics – Competence – Elimination of Bias
 
Presented by The Maloney Firm, APC
 
Lawyers Behaving Badly: How Attorneys Lost Their Licenses in 2019
Presented by Patrick M. Maloney, Esq.
 
Wednesday, January 15th
Registration: Noon -12:15 pm
Program: 12:15 -1:15 pm
 
Ethical violations can result in State Bar discipline. This is an opportunity to learn from other’s mistakes.
 
This presentation has been approved by the State Bar of California for 1.0 hour of Legal Ethics.
 
Don’t be Incompetent (and Other Secrets of Success)
Presented by Gregory M. Smith, Esq.
 
The personal challenges of the modern practice of law, including substance abuse, mental health, and staying up to date on technology.
 
Wednesday, January 22nd
Registration: Noon -12:15 pm
Program: 12:15 -1:15 pm
 
This presentation has been approved by the State Bar of California for 1.0 hour of Competency.
 
New Year: What California Lawyers & Employers Need to Know
Presented by Lisa Von Eschen, Esq.
 
Wednesday, January 29th
Registration: Noon -12:15 pm
Program: 12:15 -1:15 pm
 
To protect from costly disputes, California businesses must stay abreast of changing employment laws and keep handbooks current, but there are surprises ahead for employers in 2020.
 
This presentation has been approved by the State Bar of California for 1.0 hour of Elimination of Bias.
 
Register Today
 
Email: jjarosz@maloneyfirm.com to reserve your spot. Space is limited.
This program is free to attend and lunch and parking will be provided.

By Gregory M. Smith and Sam Fogas, The Maloney Firm, APC

Originally published by Law360
 
The rules of competition dictate that approximately half of sports fans leaving an arena will be disappointed at the outcome — after all, there can only be one winner. But sometimes when all the fans feel let down, the action will shift into the courtroom.
 
It will now be harder for fans to become litigants because, recently, the U.S. Court of Appeals for the Ninth Circuit held that sports fans who suffer through a disappointing match or game can’t sue the athletes involved for a lackluster performance even if one of them publicly lies about an injury that might limit his or her performance.
 
In re Pacquiao-Mayweather Boxing Litigation was the result of a multitude of lawsuits brought against boxers Manny Pacquiao, Floyd Mayweather, Home Box Office Inc. and others. The plaintiffs claimed that they were defrauded into buying tickets and pay-per-view packages for the much-hyped Pacquiao/Mayweather boxing match in May 2015 because the defendants misrepresented Pacquiao’s health by failing to reveal that he had a shoulder injury.
 
Immediately before the bout, Pacquiao, his team and the fight promoters publicly described Pacquiao as being in “pristine condition,” “better than [they had] ever seen him,” and had told the media that “[y]ou’re going to see the best Manny.” These statements were all made despite their knowledge that Pacquiao had torn his rotator cuff about a month before.
 
The day before the bout, Pacquiao completed a prefight medical questionnaire required by the Nevada State Athletic Commission, in which Pacquiao represented — under penalty of perjury — that he had not suffered a serious injury of any kind. Then a mere three hours before the fight, Pacquiao told NSAC about the shoulder injury and asked permission for an injection to manage the pain.
 
NSAC denied the request, but its physicians cleared Pacquiao to fight. Pacquiao then went on to lose to Mayweather in a 12-round unanimous decision that the plaintiffs described as a “yawner.” After the loss, Pacquiao publicly disclosed his injury for the first time and admitted it hampered his performance.
 
The U.S. District Court for the Central District of California dismissed the lawsuits because the plaintiffs got what they paid for: a boxing match between Pacquiao and Mayweather. The Ninth Circuit affirmed the dismissal, describing the statements regarding Pacquiao’s health as puffery and holding that the plaintiffs “suffered no cognizable injury to a legally protected interest because ‘the alleged misrepresentations and omissions implicate the core of athletic competition’ as opposed to ‘business outcomes and financial performance.’” The court wrote, “although boxing fans — like all sports fans — can reasonably expect a regulation match, they can also reasonably anticipate a measure of unpredictability that makes spectator sports exciting.”
 
In reaching its conclusions, the court adopted the license approach that has been previously used by other circuits to interpret the rights of sporting-event ticket buyers. It looked to the U.S. Court of Appeals for the Seventh Circuit’s holding in Bowers v. Fédération Internationale de l’Automobile. [1]
 
The Bowers Court had affirmed that the attendees of an F1 auto race could not state a cause of action for breach of contract when only 14 of the expected 20 cars participated in the race. It remarked, that “most states agree that the seller contracts only to admit the plaintiff to its property at a given time” not “to provide the spectacle” and that the seller agrees “only to license the plaintiff to enter and view whatever event transpires.”
 
The U.S. Court of Appeals for the Third Circuit reached a similar conclusion in an action brought by New York Jets season ticket holders in a case against the New England Patriots, Mayer v. Belichick . Mayer sued for breach of contract, fraud and other counts, in which he alleged that the Patriots had secretly videotaped their opponents sideline signals, thus depriving ticket holders of “an honest match played in compliance with all laws, regulations and NFL rules.”
 
The Mayer court held that fans had “at best, a contractual right to enter Giants Stadium and to have a seat from which to watch a professional football game” but that no cause of action could be stated because the plaintiff “undeniably saw football games played by two NFL teams.”
 
The court also differentiated the claims asserted in In re Pacquiao from cases that had been allowed to go forward by season ticket holders of teams that had later relocated or gone out of business. In those circumstances, the fan had purchased tickets for games that were not played.
 
While In re Pacquiao involved boxing specifically, the implications go far beyond the ring. The Ninth Circuit legally confirmed what every fan knows implicitly: there are no guarantees in sports as to the quality of the competition — the fact that the competitions could result in blowouts or nail biters is what keeps fans watching.
 
A ticket or subscription is not a promise of a stellar performance or of the desired outcome, but rather a chance to witness something that might be amazing. By analogy, no cause of action is created when the referees blow a call or when National Basketball Association stars skip regular season games for “load management.”
 
Although an injured boxer’s or star’s skipping a team game is undoubtably disappointing for fans, the court’s holding is rooted in both legal precedent and common sense. If athletes were legally required to be in perfect health to compete, then combat sports and football might cease to exist.
 
In the event that a bout or a game were able to be played, it would likely have to be repeatedly rescheduled before the participants’ health aligned; constantly shifting schedules would likely cause even more lawsuits from anyone who purchased flights, hotels, etc. in anticipation of the postponed event. Moreover, mandatory disclosure of every muscle strain or sniffle could alter the competitive landscape and deprive fans of the thrilling moments when athletes overcome injuries to achieve victory.
 
As In re Pacquiao illustrates, sports fans have no right to a certain quality of performance, and those who set expectations for the outcome of sports do so at their own peril. Buying a ticket gives you the legal right to get into the arena, but the law can’t guarantee a game or match that leaves all fans satisfied.
 
About the Authors: Gregory M. Smith and Sam Fogas
 
Gregory M. Smith is a business trial attorney and Sam G. Fogas is a civil litigation attorney at The Maloney Firm, APC. If you have questions regarding this article, contact Gregory Smith at gsmith@maloneyfirm.com and sfogas@maloneyfirm.com.
 
[1] Bowers v. Fédération Internationale de l’Automobile, 489 F.3d 316 (7th Cir. 2007). [2] Mayer v. Belichick, 605 F.3d 223 (3d Cir. 2010).

By Patrick Maloney and Sam Fogas, The Maloney Firm, APC

Absent extenuating circumstances, the one-year statute of limitations for legal malpractice actions begins to run at the time the client suffers harm and either discovers or through reasonable diligence should have discovered facts concerning the attorney’s neglect. But in a recently published decision, the California Court of Appeal seems to hold that the statute of limitations may in some circumstances run even before the client has suffered any appreciable out of pocket loss.

The Statute of Limitations Clock Starts Before the Harm

In October 2019, the California Court of Appeal muddied when the statute of limitations begins to run when the Court published Sharon v. Porter (2019) 41 Cal.App.5th 1. Elise Sharon (“Sharon”) had been awarded a default judgment in the amount of $17,846.55—despite her attorney Peter Porter’s (“Porter”) failure to plead monetary damages in the Complaint. Compounding the problem, the judgment debtor never paid the default judgment amount.

Sharon eventually hired a new attorney to recover the $17,846.55. Sharon’s new attorney spoke with Porter, and both agreed that the default judgment was likely void for failure to seek specific monetary damages in the initial Complaint. When the new attorney attempted to recover the default judgment from the judgment debtor more than a year after that discussion, the judgment debtor moved to vacate the judgment. The court ultimately granted the motion, holding the default judgment was void because the complaint did not plead damages. Having now suffered the loss of her judgment, Sharon sued Porter for legal malpractice for failing to plead monetary damages in the original case.

Porter immediately moved for summary judgment on the grounds that the period to bring a legal malpractice claim had lapsed. The trial court disagreed, and Porter appealed. In reversing the trial court, the Court of Appeal held that the client had suffered actual harm sufficient to start the statute of limitations when the void judgment was entered, not when it was vacated. Thus, because over one year had passed since Sharon became aware that the judgment was likely void (i.e., through her attorney’s communications with Porter), and because Sharon failed to file a legal malpractice claim within a year of those communications, Sharon’s suit was time-barred by the statute of limitations.

Viability of Legal Malpractice Claims Will Require Greater Initial Investigation Going Forward

Going forward, attorneys will have to conduct greater due diligence with respect to potential clients with legal malpractice claims, investigating what the potential client knew and when. If the client suspects legal malpractice more than a year prior to filing his or her legal malpractice suit, the statute of limitations may have passed and the client may no longer has a viable claim, regardless of when the client suffered appreciable harm.

About the Authors: Patrick Maloney and Sam Fogas

The founding shareholder of The Maloney Firm, APC, Mr. Maloney represents attorneys and clients in disputes over legal fees and legal malpractice. Mr. Fogas is a civil litigation attorney at The Maloney Firm, APC. If you have questions regarding this article, contact Patrick Maloney at pmaloney@maloneyfirm.com and sfogas@maloneyfirm.com.
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By Carl Mueller and Sam Fogas, The Maloney Firm, APC
 
It might seem obvious, but it bears repeating: diligence cannot be assumed or overlooked when it comes to a client’s case. Law firms should have checks in place to ensure they are preparing and prosecuting their client’s case diligently and not cutting corners. In a pair of recent California Court of Appeal decisions, the Court illustrated the consequences of counsel failing to diligently prepare and prosecute their clients’ cases.
 
Deposition Testimony: Get It Right the First Time
 
In Berroteran v. Superior Court (2019) 41 Cal.App.5th 518, the Court of Appeal reversed the trial court’s ruling to deny use of nine depositions of Ford’s current and former employees from prior state and federal cases under California Rule of Evidence § 1291. Despite all nine depositions being taken under oath, all nine declarants being unavailable, and all of the claims from the prior cases being identical to the present case, the trial court determined that Ford did not have a similar opportunity and interest to cross-examine the declarants at deposition in the prior litigation as they did in the current litigation.
 
However, the Court of Appeal disagreed,
 
Each deponent was represented by Ford’s counsel, and Ford had the same interest to disprove the allegations related to the [prior cases]. . . . Although each case involved a different plaintiff or additional plaintiffs, the gravamen of each lawsuit was the same or similar. The undisputable fact that every owner will have a different purchase and repair history does not negate Ford’s similar motive in questioning its witnesses on the substantial overlapping allegations . . . .
 
In its decision the Court of Appeal demonstrates that the circumstances under which a witness’s prior testimony can be admitted are very broad. As such, attorneys must diligently prepare their witnesses to give complete answers, avoiding partial answers that are not beneficial or that can be taken out of context. In other words, prepare your witness to respond for this case and the next.
 
Prosecuting the Case: Don’t Let Details Fall Through the Cracks
 
In MGA Entertainment, Inc. v. Mattel, Inc. (2019) 41 Cal.App.5th 554, MGA Entertainment (“MGA”) lost all of its claims because it failed to diligently investigate and pursue claims against Mattel within the statute of limitations. During a lengthy court battle over the ownership of the Bratz line of dolls, MGA became aware of potential trade secret misappropriation by Mattel. MGA, however, missed the statute of limitations deadline to file its claim for misappropriation of trade secrets by three days.
 
Mattel claimed that the statute of limitations had begun to run because, in a related action, MGA was aware of enough facts that it had served discovery to investigate whether Mattel had misappropriated its trade secrets. MGA hoped and argued that the statute of limitations should have been tolled until they discovered the actual facts underlying each separate act of trade secret misappropriation.
 
The Court of Appeal was not persuaded by MGA’s argument.
 
The standard of accrual of the statute of limitations under the discovery rule is not the receipt of documentary evidence of misappropriations. The question is when MGA was “ ‘on notice of a potential claim.’ ” . . . [T]he question is not when MGA actually discovered all 114 misappropriations; it is when MGA by the exercise of reasonable diligence should have discovered Mattel engaged in misappropriation.
 
Instead, the Court of Appeal held that the statute of limitations began to run as soon as MGA became aware of facts that led them to suspect that Mattel may have engaged in trade secret misappropriation. And, that as a result, MGA could not argue for a date for accrual of the statute of limitations later than the date it served discovery as to trade secrets misappropriations by Mattel.
 
The exact procedural history and specific aspects of the ruling are not as important as the practical implications: courts will not give clients or their attorneys a second chance to diligently investigate and pursue their claims, regardless of how meritorious those claims may be.
 
Be Diligent About Diligence
 
As the  two recent decisions from the Court of Appeal reflect, the consequences of failing to diligently prepare and prosecute a client’s case are dire. While not all failures of diligence will result in harmful evidence being introduced or loss of claims, attorneys must be careful to ensure that they are not cutting corners and nothing is falling through the cracks.
 
About the Authors: Carl Mueller and Sam Fogas
 
Mr. Mueller represents attorneys and clients in disputes over legal fees and legal malpractice and Mr. Fogas is a civil litigation attorney at The Maloney Firm, APC. If you have questions regarding this article contact Carl Mueller at cmueller@maloneyfirm.com and sfogas@maloneyfirm.com.
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By Carl Mueller, The Maloney Firm, APC
 
In our legal fee dispute practice, we have seen an uptick in cases involving contingent fee agreements. The vast majority of these disputes arise from written contingent fee agreements in litigation matters that suffer technical defects or contain ambiguous language concerning the manner of calculating the contingent fee. However, a recent case in the Los Angeles County Superior Court reveals a yet another issue – the failure to create any writing memorializing a contingent fee arrangement in a transactional matter.
 
In Los Angeles Superior Court Case No. BC680066, in which well-known actor Johnny Depp and his associated production entities faced off against Mr. Depp’s former attorneys, Bloom Hergott Deimer Rosenthal La Viollette Feldman Schenkman & Goldman, LLP (“Bloom”). A critical issue in that litigation was the contingent fee arrangement between Depp and Bloom.
 
According to Bloom’s cross-complaint, Bloom and Depp entered “[a]n oral agreement” whereby Mr. Depp “agreed to pay a fixed percent of their gross entertainment income” as it was received. Notably, the oral agreement was never reduced to writing. Bloom cross-complained for further fees, alleging causes of action for (1) breach of the oral contingent fee agreement; (2) quantum meruit, and (3) unjust enrichment. The allegations within the pleadings put approximately $9,000,000 of attorneys’ fees at issue. However, the case recently settled, only weeks before trial was set to begin.
 
What makes the case still relevant, even after it has settled, was the trial court’s ruling on a motion for judgment on the pleadings that Bloom could not pursue his claim for breach of oral contract because he had not reduced the contingent fee agreement with Depp to writing, as required by California Business & Professions Code § 6147.
 
Granting Depp’s motion for judgment on the pleadings, the trial court held that Bloom sought to enforce a contingent fee agreement that did not meet the statutory requirements.
 
First, the trial court found Bloom and Depp had entered into a contingent fee arrangement:
 

[T]he contract as pled is a contingency fee contract. It is tied entirely to Cross-Defendants’ success in the entertainment business. As Cross-Defendants put it, when they made money, Cross-Complainants made money. That is the very definition of a performance-based incentive. Even if the court employed Cross-Complainant’s proposed test, the success of Cross-Defendants in their business endeavors was not guaranteed. This is a contingency fee agreement. There is nothing else it can be.

 
Second, the trial court held that because the contingent fee agreement was never reduced to writing—which Bloom admitted in its pleadings—it was impossible for Mr. Depp to have ratified the oral contingent agreement prior to effectively voiding the agreement by filing his Complaint:
 

[I]n order to establish ratification of a contract which is voidable under Section 6147, Cross-Complainant must (1) plead and prove the existence of a writing which complies with section 6147, and (2) plead and prove that Cross-Defendants signed said writing with full knowledge of their option to void. Cross-Complainant has given no indication that it can do so. Its argument for ratification is based on Cross-Defendants’ continued payment of the bills Cross-Complainant issued. Therefore, it does not appear probable that Cross-Complainant can amend its pleading to state a valid cause of action.

 
Third, and finally, the trial court held that because the oral contingency agreement was voided, Bloom was left solely with a claim for quantum meruit, which already existed in his second cause of action. Therefore, there was no reason to grant leave to amend.
 
Because this case was settled and will not result in any appeal, it is not citable as precedent. However, the trial court’s reasoning was sound, and should be considered a bellwether for how other trial courts are likely to rule when facing similar scenarios. To that end, the lesson of the trial court’s ruling is that all lawyers should ensure that their fee agreements comply with the applicable statutes. Because in the event of a later dispute a court may later find that a fee structure constitutes a contingent fee, counsel should ensure that their fee agreements are (1) written and (2) comply with all elements of California Business & Professions Code § 6147.
 
About the Author: Carl Mueller
 
Mr. Mueller represents attorneys and clients in disputes over legal fees and legal malpractice. If you have questions regarding this article contact Carl Mueller at cmueller@maloneyfirm.com.

By Patrick Maloney and Sam Fogas, The Maloney Firm, APC
 
In October 2019, the California Court of Appeal provided guidance concerning the scrutiny that the trial courts are to apply when reviewing requests for attorneys’ fees. In Morris v. Hyundai Motor America, Mary Morris (“Morris”) appealed the trial court’s decision to reduce the award of attorneys’ fees from what Morris requested to what the trial court decided was reasonable. The Court of Appeal held:
 
1. A trial court can reduce attorneys’ fees awarded based on a determination that a routine, non-complex case was “overstaffed to a degree that significant inefficiencies and inflated fees resulted”; and
 
2. A trial court can reduce attorneys’ billable rates if the court finds that the rates were unreasonable given the complexity and length of the case.”
 
Procedural History
 
In March 2016, Morris sued Hyundai Motor America (“Hyundai”) in part under the Song-Beverly Consumer Warranty Act (“Song-Beverly Act”) for failing to conform a vehicle to its warranties. The parties ultimately settled the claim for $85,000.00 plus “reasonable attorney fees and expenses to be determined by the court in the absence of an agreement by the parties.” Morris sought $127,792.50 in fees based on work performed by eleven attorneys from two law firms, and one paralegal. Morris further sought a lodestar multiplier of 1.5 as additional compensation because Morris’s attorney had taken the case on contingency and payment had been delayed. Morris’s total attorneys’ fees sought totaled to $191,688.75.
 
The trial court rejected Morris’s requested fee award, finding that “[f]or a case that did not present particularly complex or unique issues, which did not require any discovery motions, and which did not go to trial . . . a reasonable number of attorneys is one partner and at most two associates/paralegals.” The trial court further found that the hourly rates for each attorney was not reasonable, and declined to apply the requested multiplier. The trial court awarded attorney fees of $73,864.00.
 
Morris appealed, arguing that the trial court engaged in inappropriate proportionality analysis and abused its discretion by cutting hours billed by six of the eleven attorneys and by reducing the attorneys’ hourly rates. Morris relied on the Song-Beverly Act, which bars a court from decreasing an award of attorneys’ fees to lower the proportion between the attorney fees award and the settlement/damages amount.
 
The Court of Appeal Upholds the Trial Court’s Reduction of Attorneys’ Fees
 
Acknowledging the Song-Beverly Act, the Court of Appeal held that a trial court is free to reduce an award for attorneys’ fees where “it was unreasonable to have so many lawyers staffing a case that did not present complex or unique issues, did not involve discovery motions, and did not go to trial.”
In sweeping aside Morris’s arguments that the trial court abused its discretion, the Court of Appeal held, “Plainly, it is appropriate for a trial court to reduce a fee award based on its reasonable determination that a routine, non-complex case was overstaffed to a degree that significant inefficiencies and inflated fees resulted.”
 
Finally, the Court of Appeal set forth a number of factors that the trial court did and could consider when determining if an award of attorneys’ fees is reasonable – including the trial court judge’s own experience and opinion. Those factors include: “finding that the matter was not complex; that [the matter] did not go to trial ; that the name partners were doing work that could have been done by lower-billing attorneys; and that all the attorneys were doing work that could have been done by paralegals.”
 
Hindsight Is 20/20, But Foresight May Save You Time and Money When It Comes to Recovering Attorneys’ Fees
 
While Morris involved recovery of attorneys’ fees under the Song-Beverly Act, the Court of Appeal’s reasoning is not limited to actions based on that statute. Absent obvious bias or error, a trial court’s fee award is likely to be upheld. As such, even where recovery of reasonable attorneys’ fees is mandated by contract or statute, attorneys should guard against inefficiency, redundancy, and overbilling to avoid the risk of not recovering their time and resources.
 
 
About the Authors: Patrick Maloney and Sam Fogas
 
The founding shareholder of The Maloney Firm, APC, Mr. Maloney represents attorneys and clients in disputes over legal fees and legal malpractice. Mr. Fogas is a post-bar law clerk at The Maloney Firm. The authors may be reached at pmaloney@maloneyfirm.com and sfogas@maloneyfirm.com.