Attorneys Patrick M. Maloney and Carl I. S. Mueller represented plaintiff Frontline Capital, Inc. in a two week bench trial in Department 53 of the Los Angeles County Superior Court in February and March 2017. On June 16, 2017, after considering written and oral arguments, the trial court issued its Statement of Decision, granting Frontline Capital both compensatory and punitive damages.

Frontline Capital alleged, and the Court found, that Matt Wiltsey had siphoned off nearly $10 million in corporate funds for himself, without pro rata distribution to Frontline Capital. Mr. Wiltsey diverted the funds through a series of companies he wholly owned, and eventually those funds landed in trusts he established to hold his home and for the benefit of his son. The Court found that Wiltsey’s testimony was not credible and that the accounting records around which the defendants built their defense had been modified and were not reliable. The Court also found that Mr. Wiltsey had backdated documents in order to make the transactions appear legitimate.

Mr. Maloney may be reached at pmaloney@maloneyfirm.com, and Mr. Mueller may be reached at cmueller@maloneyfirm.com.

Five Year Anniversary

The Maloney Firm is excited to celebrate our five year anniversary. Since opening its doors on June 1, 2012, the firm has enjoyed the opportunity and privilege of providing successful representation to hundreds of clients. The Maloney Firm devotes its practice to all facets of business litigation, employment litigation, legal malpractice, and fee dispute matters.
The firm has experienced robust growth and now boasts a carefully cultivated team of six attorneys and five support staff. Leveraging the strengths of each member of the team, the Maloney Firm has the ability to provide high quality legal representation in a cost-effective manner.
For more information contact Patrick Maloney at 310.540.1505 or pmaloney@maloneyfirm.com.

Maloney Firm Featured in Daily Journal

Attorneys at the Maloney Firm emphasize building relationships over billable events.

By Nicolas Sonnenburg, Daily Journal Staff Writer, 5/12/2017
El Segundo – “How much is it going to cost to solve this problem?” That’s the approach Patrick M. Maloney takes every time a case comes before him. If a client can settle off the bat for $75,000 with $10,000 in legal fees, Maloney feels better pursuing that route over trying to settle the case later on for $50,000 and charging another $50,000 in fees.
This is an important strategy for the Maloney Firm APC, which handles a significant number of legal malpractice and attorney fee dispute cases.

Read the full article here

Gregory M. Smith Joins the Firm

The Maloney Firm is pleased to announce that attorney Gregory M. Smith has joined our firm. Greg is a litigator with substantial experience representing clients in all aspects of civil litigation and business disputes in Federal and California Courts. He has represented individuals, Fortune 100 companies, start-ups, and insurers in diverse industries including sports, trucking, fishing, real estate, construction, and tool manufacturing.
Greg received his Juris Doctor degree from the University of San Diego School of Law. Prior to joining the Maloney Firm, Greg practiced law in Santa Barbara and at a large firm in downtown Los Angeles.
Greg can be reached directly at 310.347.4698 or at gsmith@maloneyfirm.com.

Welcome Attorney Vanessa Willis to the Firm

The Maloney Firm is pleased to announce that Vanessa V. Willis has joined our firm as an associate attorney. Ms. Willis focuses her practice on employment litigation and represents both employees and employers in all types of employment matters. She also represents parties in contract disputes, trade secret matters, and other business litigation.
Ms. Willis received her Bachelor of Arts degree in International Relations and Russian from the University of Southern California in 2001 and her Juris Doctor degree from Southwestern University School of Law. Prior to joining the Maloney Firm, Ms. Willis worked for a firm in downtown Los Angeles specializing in governmental entity matters and employment law.
Ms. Willis can be reached directly at 310.347.4691 or at vwillis@maloneyfirm.com

Patrick Maloney to be Sworn in as Secretary of the South Bay Bar Association

On February 3, 2017, the South Bay Bar Association will hold its 64th Annual Judges Night. At the event, the Association swears in the incoming and incumbent members of its Board of Directors and Executive Committee. Patrick Maloney has served as a member of the Association’s Board of Directors since 2013. This year Mr. Maloney will be appointed to the Association’s Executive Committee, assuming the position of Secretary.

2017 Super Lawyers

Congratulations to Patrick M. Maloney for being named to the 2017 Southern California Super Lawyers list, an honor bestowed upon only 5% of attorneys. This is the third year in a row that he has been honored. 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 selection process includes independent research, peer nominations and peer evaluations.

Court of Appeal Clarifies Legal Malpractice Statute of Limitations

CA Court of Appeal Clarifies Termination of Tolling Period for Legal Malpractice Statute of Limitations Under Code of Civil Procedure § 340.6 (a)(2)

By: Carl I. S. Mueller of The Maloney Firm, APC

On October 12, 2016, the California Court of Appeal filed its opinion in the matter styled as Gotek Energy, Inc. v. Socal IP Law Group, LLP. The central issue of law on appeal in this legal malpractice action was whether the trial court below correctly entered summary judgment in favor of the defendants, Socal IP Law Group, LLP (“firm one”), based on a statute of limitations defense. At a basic level, the appellate court reaffirmed the rule that the one year statute of limitations for legal malpractice actions is not tolled pursuant to Cal. Code of Civil Procedure § 340.6 (a)(2) once legal representation has terminated. However, the facts of the case make clear that the language of the communications is of the utmost importance in determining when the legal representation ends. Thus, the summary judgment ruling was affirmed and the legal representation found to have ended on the date that firm one sent a letter to its client stating that the attorney-client relationship “is terminated forthwith.”
To sum up the facts of the case, firm one represented Gotek Energy, Inc. (“client”) in relation to specific patent filings. Firm one admittedly failed to timely file for patent rights in Japan and Brazil, and informed client in August 2012 that it had been negligent. On September 26, 2012, client retained Parker Mills (“firm two”) to investigate firm one’s negligence. On November 5, 2012, firm one sent a fax to firm two stating that client was making a malpractice claim on firm one, and asking firm one to tender the claim to its insurance carrier. On November 7, 2012, firm one sent an email to client stating that it “must withdraw” and including the following language:

Consequently, the firm’s attorney-client relationship with [client] is terminated forthwith, and we no longer represent [it] with regard to any matters.[…] Please tell us immediately where we should send [client’s] files[…]. You should retain patent counsel to handle your patent matters.

Client requested that firm one release client’s files to a third law firm on November 8, 2012, requesting the transfer be complete by November 23, 2012. On November 15, 2012, firm one sent client a letter to “confirm” that the attorney-client relationship had been “terminated” and that the client’s files would be released pursuant to the request.
Firm two filed client’s complaint for legal malpractice against firm one on November 14, 2013. There is no dispute that the injury occurred at least by September 26, 2012, and likely before. However, client argued that the statute of limitations should be tolled until November 15, 2012, when firm one released client’s file.
The Appellate Court disagreed, stating that firm one’s representation of client ended by November 8, 2012:

[F]irm one’s representation of client ended on November 8, 2012, when client wrote a letter to firm one requesting that it “immediately make all necessary preparations and take all necessary action to deliver all [of client’s] filed to” Armstrong Teasdale, LLP. [Omitted]. By requesting that its files by immediately delivered to replacement counsel, client consented to firm one’s express withdrawal of the previous day.

The court further ruled that based on firm one’s letter to client on November 7, 2012 stating that it was terminating the attorney-client relationship, client had no reasonable expectation of firm one’s continuing representation after that date under the rule set out in Gonzalez v. Kalu (2006) 140 Cal.App.4th 21. As such, the statute of limitations stopped tolling on November 7, 2012:

Pursuant to this rule, firm one’s representation ended on November 7, 2012. On that date, firm one emailed client that it “must withdraw” as client’s attorney, that is “attorney-client relationship with [client] is terminated forthwith,” and that it “no longer represent[s] [client] with regard to any matters.” After receiving the email, client could not reasonably have expected that firm one would provide further legal service.

As such, it appears that the Appellate Court has used this opportunity to establish a bright line rule to end the ongoing representation tolling rule of a legal malpractice statute of limitations under Code of Civil Procedure § 340.6 (a)(2): when a client has already engaged replacement counsel, the ongoing representation ends upon a communication with the client that states the attorney-client relationship is ending. As stated by the court, any delay in releasing the client’s files does not continue the representation, as “the transfer of files was a clerical, ministerial activity,” and not legal representation.

Ruling on Law Firm Press Releases

Court Grants Law Firms Wide Berth In Celebratory Press Releases

By: Carl I. S. Mueller of The Maloney Firm, APC

In J-M Manufacturing Company, Inc. v. Phillips & Cohen LLP, the California Appellate Court considered whether a defamation and trade libel claim based on a law firm’s celebratory press release fell within Code of Civil Procedure § 425.16. In its decision filed on May 2, 2016, the Court of Appeal reversed the trial court’s decision that “it was a question of fact for the jury whether the press release was privileged as a fair and true report of judicial proceedings” within Civil Code § 47, and granted the law firm’s Anti-SLAPP motion striking the defamation and trade libel allegations.
The press release at issue arose from a jury decision as to liability in a bifurcated trial finding against J-M Manufacturing Company, Inc. (“J-M”), as follows:

On November 14, 2013 the jury returned a special verdict in favor of each of the five representative plaintiffs, finding that J-M did “present or caused to be presented to a [government] officer or employee a claim for payment or approval that was false or fraudulent,” that the claim was materially false and that J-M presented the false claim with the requisite intent.

However, no decision was made as to damages. Like many law firms, the law firm trying the case against J-M, Phillips & Cohen LLP (“Phillips & Cohen”), issued a press release announcing the winning verdict on the liability stage, with the following headline:

JM Eagle faces billions in damages after jury finds JM liable for making and selling faulty water pipes.

Phillips & Cohen also included within its press release that the jury found that J-M “knowingly manufactured and sold to government entities substandard plastic pipe,” despite the jury making no express findings as to these allegations.
In response to the press release, J-M filed a lawsuit against Phillips & Cohen that alleged defamation and trade libel:

[S]tatements in Phillip & Cohen’s press release that “a federal jury unanimously found that J-M manufactured and sold pipe that is ‘faulty,’ ‘substandard,’ ‘weak,’ and ‘shoddy’” were “neither a fair nor an accurate report of the proceedings” and grossly misrepresented the jury’s findings.

Applying Civil Code § 47, the Court of Appeal was tasked to determine whether a privilege existed for Phillip & Cohen’s statements as a “fair and true” report of official proceedings. Although the trial court had found that adequate evidence had been presented in opposition to Phillip & Cohen’s Anti-SLAPP motion to allow this issue to be decided by a jury, the Court of Appeal found:

[I]n measuring “a ‘fair and true report’” the defendant is “permit[ted] a certain degree of flexibility/literary license,” [Citing Reader’s Digest Assn. v. Superior Court (1984) 37 Cal.3d 244, 262, footnote 13.]

Further the Appellate Court ruled that any challenged statements must be read in light of the entirety of the allegedly defamatory publication:

[T]he challenged language must be viewed in context to determine whether, applying a “totality of the circumstances” test, it is reasonably susceptible to the defamatory meaning alleged by the plaintiff.

In its opposition to the Anti-SLAPP motion, J-M conceded its allegation arose out of protected activity, but still contested, and the trial court agreed, that there was enough evidence to show a likelihood of prevailing on its claim. But the Appellate Court held in its decision to reverse:

To describe the noncompliant and misrepresented pipe sold by J-M as “faulty” or “substandard” falls well within the acceptable margin of flexibility/literary license.

Further, as to the misleading headline, the Appellate Court determined that any misunderstanding would be cured after “the headline is read and considered with the press release as a whole.”
As such, the Appellate Court has apparently opened the door for law firms to issue flashy press releases – even if it rises to “self promotion or puffery” – provided that the bravado of those headlines are properly explained within the body of the press release.