In an article by Sanford Gage, who is a very good mediator, 9,000 California settlement decisions were analyzed over 41 years comparing rejected pretrial settlement offers and actual trial results. Sixty-one percent of the time, the plaintiffs obtained an award that was the same or worse than the result the plaintiff would have achieved by accepting the defendant’s pretrial settlement offer. The defendant decision error was only 24 percent, and where there was insurance, the error rate was only 21 percent.

However, defendants are NOT perfect.  While the average cost of the “decision error” by plaintiffs were $43,100,  defendants suffered an average adverse outcome in the amount of $1.14 million! Thus the expected cost of error is more than 20 times greater for the defendant than the plaintiff.

Gage_Making-the-right-decision-at-mediation_Plaintiff-magazine

 

 

In law school you are taught “if you are a defendant remove the case to the Federal Court”.  University of Connecticut law professors Alexandra Lahav and Peter Siegelman studied 30 years of data from the Administrative Office of the U.S. Courts supporting that directive. According to the law profs, the winning rate for plaintiffs in civil litigation in federal courts declined drastically and steadily between 1985 and 1995, from about 70 percent to 30 percent.SSRN-id2993423

P.S.  Federal Court Buildings are also so much nicer (for the most part) and the lawyers dress better!

Lahav, Alexandra D. and Siegelman, Peter, The Curious Incident of the Falling Win Rate (July 7, 2017). Available at SSRN: https://ssrn.com/abstract=2993423 or http://dx.doi.org/10.2139/ssrn.2993423

International law systems, justice, human rights and global business education concept with world map on a school globe and a gavel on a desk on blue background.

The new CCP §1297.185 essentially over rules the 1998 California Supreme Court case known as Birbower holding that lawyers from foreign nations could not appear in international arbitration matters in California.  California Governor Jerry Brown signed into law SB 766 effective January 1, 2019.  Arbitration and mediation are huge businesses for lawyers and this will create more opportunities for California based attorney’s and ADR companies 😊

Code of Civil Procedure § 1297.185, et seq. is very broad, essentially the requirements are:

  1. The non-California admitted attorney must be admitted in good standing to all jurisdictions in which he/she is a lawyer. must be based outside of California.
  2. The subject matter is supposed to be “internationally related” but Code of Civil Procedure § 1297.186(a) is broad enough to cover almost any mediation or arbitration proceeding.

Phone company records are difficult to obtain.  I say difficult, not impossible.  Even with a validly issued civil subpoena, the phone company will not comply without a notarized written consent from the consumer who “owns” the phone number.  You need a signed and notarized form such as this: Sprint Consent to Release Information

Pub. Util. Code, § 2891 provides:

(a) No telephone or telegraph corporation shall make available to any other person or corporation, without first obtaining the residential subscriber’s consent, in writing, any of the following information:

Code Civ. Proc., § 1985.3

(f) A subpoena duces tecum for personal records maintained by a telephone corporation which is a public utility, as defined in Section 216 of the Public Utilities Code, shall not be valid or effective unless it includes a consent to release, signed by the consumer whose records are requested, as required by Section 2891 of the Public Utilities Code.

In an unpublished opinion, Milder v. Holley, B267974 (2/5 1/31/17) the Court of Appeal on a gateway issue, found that a judge decides if there was fraud in the inducement to enter into an arbitration agreement in California.  ( Citing Johnson v. Siegel (2000) 84 Cal.App.4th 1087, 1095.)  This is separate from fraudulent inducement to enter into the contract which happens to contain an arbitration clause.  The latter is to be decided by the arbitrator. (Citing Ericksen, Arbuthnot, McCarthy, Kearney & Walsh Inc. v. 100 Oak Street, (1983) 35 Cal.3d 312, 323.)  Read more … Continue Reading Enforcement of an Arbitration Clause is for the Court not Arbitrator to Determine

In Marcus and Millichap Real Estate (April 30, 2018) G053953, a sympathetic Court reversed a ruling so that a once wealthy, but now poor Plaintiff who lost more than $2.8million by the defendants for elder abuse and breach of fiduciary duty, and after being in arbitration for many years, ask the trial court to transfer the case back to the Superior Court in a declaratory relief action citing Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87.  The trial court denied the relief, but the Court of Appeal rode in on their shiny horse and saved them !  The triable issue was if the plaintiffs had a present ability to pay her agreed arbitration share.

The Court citing precedent that a defendant cannot avoid potential liability by forcing a matter to arbitration and then making it so expensive that plaintiff has no choice but to give up, allowed the Plaintiff to proceed in the Superior Court.  I like this case because it shows how the law can do what is right, and not be narrow with a “but the contract says” position.

 

Code of Civil Procedure 1856(g) provides that parol (verbal) evidence to explain the circumstances under which the agreement, to which it relates,  explain an extrinsic ambiguity or otherwise interpret the terms of the agreement, or to establish illegality or fraud.    Further, parol evidence is admissible even if the contract itself is clear or not in dispute.

See also recent case of IIG Wireless, Inc. v. Yi following Riverisland Cold Storage v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169 which reversed the 1935 California Supreme Court Bank of America v. Pendergrass case.  CCP 1856 is the tool plaintiffs can use against fraudsters!