Terms like “Chapter 11,” “automatic stay,” “core proceedings,” “exclusivity period,” and “nondischargeability” often sound like a foreign language to those who do not regularly practice in the bankruptcy courts. This presentation will help to demystify this lingo and provide attorneys with the an overview of the bankruptcy process so they can provide appropriate advice to their clients. Space is limited. Please RSVP by calling 310.540.1505 or emailing mmaloney@maloneyfirm.com.

This presentation has been approved by the State Bar of California for 1.0 hour of MCLE credit.
 
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Does the Chipotle GMO Lawsuit Go Too Far?
By Gene Williams, The Maloney Firm, APC
 

In recent years, the American public has become markedly more health-conscious with respect to the ingredients contained in the food it consumes, and has demanded increased transparency from the companies who manufacture, prepare and sell food. The companies have acted predictably, looking to capitalize on the public’s desire for information by disclosing more and more information regarding what is or isn’t in the food they sell. The government has done its part by implementing heightened standards for food labeling. And consumer protection attorneys have played their role of watchdog, making sure that the companies who are profiting from this new heightened consumer focus on the ingredients in their food are honest with respect to the representations they make. The system has worked, for the most part, by providing the public with additional information regarding the contents of the food they consume, while allowing companies to profit by charging more for foods that contain premium ingredients, or that remove ingredients perceived as unhealthy or potentially dangerous.
 

One such example has been products containing genetically modified organisms (“GMOs.”) A large segment of the public has come to feel that GMOs are unhealthy or unsafe, and are willing to pay a premium for products that do not contain GMOs. Companies have obliged by offering and promoting “non-GMO” products, usually at a premium, and consumer protection attorneys have filed lawsuits against companies who falsely claim to be offering “non-GMO” products. Setting aside for a moment the question of whether GMOs are actually unhealthy or unsafe (many of us living in California have benefitted greatly from the drought-resistant and pesticide-resistant grains and fruits that are “genetically modified”), the checks and balances of the system have worked – consumers are given the information necessary to decide whether or not they want to pay more for GMO-free foods, while the companies profit from selling those foods at a higher rate.
 

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Court of Appeal Provides Guidance to Employers on Preparing Enforceable Employee Arbitration Agreements
By Gene Williams, The Maloney Firm, APC
 

The 1st District Court of Appeal shot down an employee arbitration agreement that was egregiously one-sided toward the employer and was forced upon the employee with no time to review it. In finding the agreement unconscionable and unenforceable, the Court set forth a number of guidelines that should help employers create employee arbitration agreements, or modify existing agreements, that stand up to judicial scrutiny and will be held enforceable.
 

In Carlson v. Home Team Pest Defense Inc., 2015 DJDAR 9447 (Aug. 17, 2015), the Court of Appeal upheld the trial court’s denial of the defendant’s motion to compel arbitration. The plaintiff, Julia Carlson, accepted an offer of employment from defendant Home Team Pest Defense. On her first day, Carlson was given access to the company’s electronic system that contained the company policies, including the agreement to arbitrate. However, Carlson was not given access to the dispute resolution policy, which set forth the arbitration terms. When Carlson complained that she did not have access to the policy, and that she did not feel comfortable signing the agreement without seeing the policy and negotiating the terms, she was told that she could call a telephone number “in a couple of weeks” to see if someone had a copy of the policy. She was advised, however, that she could not wait to review the policy before signing the agreement to arbitrate, and that refusal to sign would be considered a refusal to accept the job offer. Fearful of losing the potential job, as well as her unemployment benefits, Carlson agreed to sign the agreement.
 

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Former Deputy District Attorney Dmitry Gorin will present on identifying and resolving criminal law issues in civil practice, providing examples of criminal cross-over problems from family law, civil litigation, and other practice areas. Space is limited. Please RSVP by calling 310.540.1505 or emailing mmaloney@maloneyfirm.com.

This presentation has been approved by the State Bar of California for 1.0 hour of MCLE credit.
 
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Los Angeles attorney Patrick Maloney, founder and managing partner of The Maloney Firm, APC, has been selected as a Fellow of the Litigation Counsel of America, a trial lawyer honorary society composed of less than one-half of one percent of American lawyers.
 

Mr. Maloney has served as lead trial counsel in numerous matters in both federal and state court, as well as in arbitration. He regularly represents clients in disputes involving contracts, fraud, and anti-competitive conduct; employment litigation; and shareholder and partnership disputes. He also represents both clients and lawyers in legal malpractice and fiduciary duty cases, and in fee disputes.
 

Fellowship in the LCA is highly selective and by invitation only. Fellows are selected based upon excellence and accomplishment in litigation, both at the trial and appellate levels, and superior ethical reputation. The LCA is aggressively diverse in its composition. Established as a trial and appellate lawyer honorary society reflecting the American bar in the twenty-first century, the LCA represents the best in law among its membership. The number of Fellowships has been kept at an exclusive limit by design, allowing qualifications, diversity and inclusion to align effectively, with recognition of excellence in litigation across all segments of the bar. Fellows are generally at the partner or shareholder level, or are independent practitioners with recognized experience and accomplishment. In addition, the LCA is dedicated to promoting superior advocacy, professionalism and ethical standards among its Fellows.
 

Mr. Maloney is a board member of the South Bay Bar Association and chair of Employment Law Section. He also serves as a volunteer fee arbitrator for the Los Angeles County Bar Association. He has been named to the 2015 Southern California Super Lawyers list and holds an AV peer-review ranking from Martindale Hubbell.
 

The Maloney Firm, APC is a full service law firm based in El Segundo, California. The Maloney Firm may be reached at 310.540.1505 or found on the internet at www.maloneyfirm.com. Mr. Maloney may be reached directly at 310.347.4601 or pmaloney@maloneyfirm.com.

In this program, Kurt Obermeyer will walk through the budget process that can work best for your firm and allow you to not only efficiently budget for future income and expenses, but also planning strategies to yield the most successful practice possible. Space is limited. Please RSVP by calling 310.540.1505 or emailing mmaloney@maloneyfirm.com.

This presentation has been approved by the State Bar of California for 1.0 hour of MCLE credit.
 
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In this complimentary MCLE presentation, Patrick Maloney will address the law applicable to retainer agreements, with a particular emphasis on ensuring that retainer agreements comply with ethical requirements. Space is limited. Please RSVP by calling 310.540.1505 or emailing mmaloney@maloneyfirm.com.


This presentation has been approved by the State Bar of California for 1.0 hour of MCLE credit, including 1.0 hour of Legal Ethics.
 
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NOVAK v. FAY: California Court of Appeal Allows Attorney to Enforce Fee Lien Against Assets Held in Trust

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

In order to ensure payment for their services, attorneys oftentimes include language in their retainer agreements imposing a lien on the clients prospective recovery. In a recent California Appellate Court decision, Novak v. Fay, Case No. B256889, filed April 28, 2015, the California Court of Appeal upheld an attorney lien that granted a lawyer an interest in a trust established by his client’s deceased spouse.
 

In Novak, attorney Mark Novak represented Douglas Kelly in a probate matter involving the distribution of assets from his late spouse’s trust, the Dana Teitler Trust. Novak’s retainer agreement with Kelly provided for a 40% contingent fee and expansive lien rights in the event of a successful outcome:
 

[Kelly] agrees to pay [Novak] 40% of all recoveries by way of settlement . . . . “Recovery” includes, but is not limited to, all distributions to [Kelly’s wife’s] estate from the [trust], i.e. distribution to which [Kelly] is entitled to 50% as [spouse].
 

It is agreed that [Novak] may retain his share in full out of the amount finally collected by settlement; and it is further agreed that [Novak] shall have all general, possessory, or retaining liens, and all special or charging liens known to common law. [Kelly] expressly assigns to [Novak] to the extent of his fees and disbursements, all assets and sums realized by way of settlement […].

In the probate matter, Novak asserted that Kelly was a pretermitted spouse, i.e., that Dana Teitler had failed to provide for him in her trust. Eventually, Novak obtained a favorable settlement for Kelly, by which he obtained an interest in his deceased spouse’s trust. Unfortunately, Kelly passed before he paid Novak the contingent fee that Novak had earned.
 

After Kelly died, Novak filed a petition seeking to enforce his lien rights against the Dana Teitler Trust. Novak asserted he was entitled to 40% of the portion of the trust Kelly received through the settlement.
 

Not surprisingly, the successor trustee, Michael Fay, who was Teitler’s husband from a prior marriage, objected to Novak’s claim. The trial court rejected Novak’s claim, and Novak appealed.
 

The Court of Appeal rejected the Trustee’s argument that Kelly had not realized anything from the trust. It reasoned that Novak’s lien rights were created upon the execution of the agreement, and that those rights extended to “the litigation’s proceeds,” whatever they were. Therefore, “as soon as [Kelly’s] beneficial interest in [the trust] came into being, [Novak’s] lien attached to it.” The Court of Appeal held that the trust was among the assets contemplated by the lien provision in Novak’s retainer agreement. And so, under Section 9391 of the Probate Code, Novak could rightly file an action on the lien against the Dana Teitler Trust.
 

In sum, Novak teaches that attorneys are well advised to include carefully prepared lien language in their retainer agreements. The lien provision should cover any possible circumstance that may arise by way of settlement or other resolution of an action. In Novak’s case, he accomplished this by including language that provided for an assignment of an interest in any assets realized through the representation. Of course, whenever an attorney prepares a fee agreement that includes a lien provision, he should consider whether it is necessary under California Rule of Professional Conduct 3-300 to obtain the client’s informed written consent to the lien provision.
 

The Maloney Firm, APC is a full service law firm based in El Segundo, California. The professionals at The Maloney Firm focus on providing clients with efficient and effective service in business disputes and employment litigation. www.maloneyfirm.com

Williams v. Chino Valley Independent Fire District: Prevailing FEHA Defendants Are Not Entitled to Recover Costs Unless the Plaintiff’s Claims Are Frivolous

By: Ashley Tate, The Maloney Firm, APC
 

On May 4, 2015, The California Supreme Court held in Williams v. Chino Valley Independent Fire District, S213100 5/4/15, that a prevailing defendant in a FEHA case should not be awarded litigation costs unless the court finds the action lacked merit. In contrast, prevailing plaintiffs can and ordinarily should receive their costs and attorneys fees. In Williams, the plaintiff Loring Winn Williams sued defendant Chino Valley Independent Fire District for employment discrimination in violation of the Fair Employment and Housing Act, “FEHA.” The trial court granted summary judgment for the defendant employer, and awarded the defendant its court costs. The plaintiff employee appealed, contending that because plaintiff’s action was not frivolous, unreasonable or groundless, the defendant should not have been awarded its costs.
 

When a defendant in a FEHA case succeeds against a plaintiff’s non-frivolous claims, can the court order the plaintiff to pay the defendant’s costs of the litigation? In short, no.
 

Code of Civil Procedure section 1032 guarantees prevailing parties in civil litigation awards of the costs expended in the litigation, “[e]xcept as otherwise expressly provided by statute.” The costs include filing, motion and jury fees, food and lodging costs for sequestered juries, the costs of taking necessary depositions, costs of service of process, fees of ordinary witnesses and of court ordered experts, the costs of transcripts ordered by the court, attachment expenses and surety bond premiums, fees of court reporters and interpreters, and the costs of exhibits helpful to the trier of fact.
 

The questions in Williams were (1) Is Government Code section 12965(b) an express exception to the general mandate of Code of Civil Procedure section 1032(b) for courts to award fees to prevailing parties? and (2) Is the trial court’s discretion under Section 12965(b) limited when it comes to prevailing defendants? Yes and yes.
 

FEHA provides an exception to the general rule of Section 1032. Government Code section 12965(b) provides for private actions to enforce the provisions of FEHA, and it states in part, “In civil actions brought under this section, the court, in its discretion, may award to the prevailing party, including the department, reasonable attorney’s fees and costs, including expert witness fees.” (Emphasis added.)
 

The Supreme Court in Williams determined after a detailed analysis that Government Code section 12965 is in fact an express exception to CCP 1032(b), and it governs costs awards in FEHA actions. This provides the trial court with discretion in making such awards to the prevailing party. But the discretion is much more limited when the prevailing party is the defendant.
 

The Court analyzed legislative history and case law, concluding that the assymmetrical standard set forth in the 1978 case Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412, applies to discretionary awards of both attorney fees and costs to prevailing FEHA parties. The Court in Christiansburg held that a prevailing defendant receives its attorneys’ fees only if the plaintiff’s action was objectively groundless. Id. The asymmetrical standard set forth in Christiansburg entitles prevailing plaintiffs to attorneys’ fees generally but allows prevailing defendants awards of their attorneys’ fees only when the plaintiffs’ claims were frivolous. Under Williams, the Christiansburg standard applies not only to attorneys’ fees, but also to other litigation costs.
 

In sum, a prevailing plaintiff in a FEHA case will ordinarily be awarded his or her attorneys’ fees and costs, but a prevailing defendant is not entitled to either unless the court finds the plaintiff’s action was frivolous. This is good news for FEHA plaintiffs, and bad news for the defendants.
 

The Maloney Firm, APC is a full service law firm based in El Segundo, California. The professionals at The Maloney Firm focus on providing clients with efficient and effective service in business disputes and employment litigation. www.maloneyfirm.com

I Could Have Sworn I Heard That Before: California Court of Appeal Holds That Legal Fee Invoices Are Privileged Communications.

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

The Second Appellate District recently ruled that legal fee invoices fall within the attorney-client privilege as established in Cal. Evidence Code § 952. When said out loud, it seems obvious. But, according to County of Los Angeles Board of Supervisors v. The Superior Court of Los Angeles, case no. B257230, filed April 13, 2015, the question had not previously been resolved. In addressing the issue, the court noted that “while several cases have touched on the fringes of this question, none have squarely decided it.”
 

The case arose from a request under the California Public Records Act, wherein the ACLU attempted to obtain legal fee invoices, among other documents, from the Los Angeles County Board related to nine different lawsuits, “brought by inmates involving alleged jail violence,”. Six of the lawsuits were ongoing. The ACLU wanted to determine whether those lawsuits, defended by private firms on the taxpayers’ dime, were being litigated efficiently. The County Board agreed to produce redacted invoices for the concluded matters, but refused to produce the legal fee invoices for the ongoing disputes. So, the ACLU filed a petition for a writ of mandate in the Los Angeles Superior Court to compel the County Board to “disclose the requested records for all nine lawsuits.”
 

In what the appellate court referred to as “a thoughtful decision,” the trial court granted the petition, ordering the County Board to produce the legal fee invoices. In reaching its decision, the trial court cited the County Board’s failure to produce any “actual evidence concerning the contents of the billing statements, including whether they were produced for a litigation related
purpose.”
 

The County Board challenged the trial court’s ruling via a petition for writ of mandate to the appellate court. On appeal, the crux of the legal dispute fell to the following language defining a confidential communication within Evidence Code § 952:
 

Information transmitted between a client and his or her lawyer in the course of that relationship and in confidence […], and includes a legal opinion formed and the advice given by the lawyer in the course of that relationship. (Emphasis added).

The ACLU argued the phrase “and legal opinion” required that to qualify as protected, confidential, and privileged, the invoices needed to contain a legal opinion. However, the County Board argued the nature of the confidential communications as between an attorney and client created the privileged status, and the appellate court agreed. The court based this reading on historical context, and reasoned that any other reading created the absurd result of any confidential communication lacking legal opinion losing its privileged status.
 

Overall, the court once again chose to strengthen and uphold the sanctity of statutory privilege, and practitioners now only need to point to this decision when opposing a motion to compel production of legal fee invoices. However, as the appellate court noted, when prosecuting a request for attorneys’ fees, clients may decide to waive the privilege in relation to those legal fee invoices in order to enhance their potential for recovery.
 

The Maloney Firm, APC provides expertise to clients in relation to legal fee disputes and professional malpractice claims on either side of the aisle. Additionally, the professionals at The Maloney Firm, APC focus on providing clients with efficient and effective service in business disputes and employment litigation. www.maloneyfirm.com