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  1. LITIGATING THE PUBLIC ENTITY STATE COURT CASE AN OVERVIEW FROM LAUNCH TO SPLASHDOWN Presented by: Eric A. Gale, Esq. Brian M. Affrunti, Esq. Burke, Williams & Sorensen, LLP 2440 West El Camino Real, Suite 620 Mountain View, CA 94040 650.327.2672 Moderated by: Jack Blyskal, CSAC-EIA Chief Claims Officer Materials Prepared by: Hans A. Gillinger, Esq. Brian M. Affrunti, Esq. Eric A. Gale, Esq.

  2. Introduction • Some cases must be tried, but most are not. • 95% of civil cases settle. • Plaintiffs’ counsel know they earn more settling cases than trying them. 2

  3. Consider value to the defense and value to the plaintiff. Defense value = (amount at risk) x (% chances of success) + costs + fees. Plaintiff’s value = (amount at risk) x (% chances of success) - costs + time. Example: $1,000,000 x 50% + $50,000 + $150,000 = $700,000 $1,000,000 x 50% - $50,000 = $450,000 Intangibles: Setting precedent, serial claims, etc. Valuation 3

  4. Contractual damages (policy). Defense attorney’s fees. Plaintiff’s fees (such as in § 1983 and ERISA cases). General damages. Punitive damages. 1. Determine Amount of Risk 4

  5. Legal research on key issues. Strength of witnesses. Strength of judge (willingness to grant SJ/Motion to Strike punitive damages; jury instructions). Risk aversion. Highest for plaintiff on contract issue. Highest for defense on extra-contractual issues. 2. Chances of Success 5

  6. First Steps When Served With A Lawsuit Pre-Launch Checklist 6

  7. Issue a Litigation Hold to City Staff • Adverse evidentiary inferences. The trier of fact may consider a party’s willful suppression of evidence in determining what inferences to draw from the evidence or facts. (Evid. Code § 413; see also BAJI No. 2.03.) • Discovery sanctions. Monetary, contempt, issue, evidence, and terminating. (Code Civ. Proc. § 2023; Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 12; see Williams v. Russ (2008) 167 Cal.App.4th 1215 (terminating sanctions).) 7

  8. Litigation Hold to Staff of Defendant On ________, ______ served City with a complaint alleging causes of action regarding the City’s ____________. Whenever the City is involved in litigation, it has a duty to preserve all potential evidence that might otherwise be destroyed in the normal course of business. Therefore, effective immediately, the City is placing a LITIGATION HOLD on all documents generated, received, or currently existing that may be relevant to this litigation. A LITIGATION HOLD means that no documents can be destroyed, erased, altered, or removed from the premises until further notice or prior written approval from the City Attorney's Office. The term “documents” means any: handwriting, typewriting, printing, Photostatting, photographing, photocopying, transmitting by electronic mail or facsimile, and every other means of recording upon any tangible thing; any form of communication or representation, including letters, words, pictures, voicemail, sounds, or symbols, or combinations thereof, and any record thereby created, regardless of the manner in which the record has been stored. Examples of documents that should be preserved include drafts, handwritten notes, calendars, correspondence, e-mail, agendas, minutes, memos, notes, charts, etc. Subject to this LITIGATION HOLD, you must retain and preserve all documents pertaining to this lawsuit. You must also retain and preserve all documents pertaining in any way to: (1) ___________; (2)_____________, if related to or referencing the ______________; and (3) ___________________. Please forward this litigation hold to all department heads with an instruction that it be distributed to employees in their department who may have relevant documents. This “LITIGATION HOLD” will remain in effect until further notice. Thank you for your cooperation. 8

  9. Summons & Complaint • Civil litigation matters are initiated by the filing and service of the summons and complaint. • A “summons” is a form of court process that functions to notify defendants that a lawsuit is pending against them and of defendant’s right to defend the action. • In suits against public agencies, service of the summons and complaint may be made by delivering to “the clerk, secretary, president, presiding officer or other head of its governing body.” 9

  10. Service of Process • This is the phrase used to describe a defendant being served with a complaint or petition, which notifies the defendant that a case has been filed against them. • 3 methods of proper service: • Personal • By Mail (check rules) • By Publication (need permission) • If the defendant is properly served and fails to “appear” within 30 days, the case can proceed by default. 10

  11. Check Method of Service 11 Personal service required. The summons and complaint/petition must be served on the “clerk, secretary, president, presiding officer, or other head of [the] governing body.” (Code Civ. Proc. ¶ 416.50.)

  12. Permitting defense counsel to accept service is usually good for defendants. Avoids running up plaintiff’s costs for which defendant may later be liable There is no way to prevent service of summons Refusing to accept service of summons may be appropriate. Where defendant is a foreign national, living abroad Where there is any issue as to the court’s jurisdiction Where the three-year statute for service of summons has already run Strategy Considerations –Service of Summons 12

  13. Responding to Summons • The court will enter a default judgment against the defendant that fails to timely respond to a summons; response required within 30 days in most cases • Defendants are subject to shorter periods within which to timely file a response, including: • Unlawful detainer proceedings (5 days) • “Reverse Validation Actions” challenging official action by a public agency (10 days) 13

  14. Service By Mail With Acknowledgment • Often, plaintiffs will attempt service of the summons and complaint by mail accompanied with a request to acknowledge receipt thereof; if defendant signs and returns the acknowledgment within twenty days, no further service is necessary • Defendant is held liable for cost of additional service if it refuses to acknowledge receipt. • Acknowledgment usually benefits defendants because the responsive pleading is due within thirty days of execution of the acknowledgement 14

  15. T Minus 31 Seconds On Board Computers Take Over Launch SequenceCheck to see if Claim Filed • Government Claims Act (Gov. Code ¶ 810 et seq.) applies to almost all claims for “money or damages.” (Gov. Code ¶ 905.) • Notable exceptions: 42 U.S.C. 1983, inverse condemnation, workers compensation, non-monetary claims (injunctive relief, declaratory relief, and mandamus). 15

  16. Key Features of Government Claims Act Authorizing Statute Requirement: Public Entity Liability is abolished except as provided by statute, and effectively abolishes all common law or judicially declared forms of liability for public agencies, except as provided by state or federal constitution (Govt. Code § 815(a)) • To state a cause of action against a California public entity, every fact essential to the existence of statutory liability must be pled with particularity, including the existence of a statutory duty (Searcy v. Hemet Unified Sch. Dist., 177 Cal.App.3d 792 (1986) 16

  17. Key Features of Government Claims Act Claim Presentment Requirement: Generally, no suit for money or damages may be maintained against a California public entity unless a formal claim has been presented to such entity, and has been rejected (or is deemed rejected by the passage of time). • Perhaps more accurately termed the “Government Claims Act,” the statutory scheme, with exceptions, apply equally to contract claims (City of Stockton v. Sup. Ct., (42 Cal.4th 730, 741-42)) • Purposes include ensuring that public entities have adequate ability and time to investigate and, where appropriate, to settle claims without the expense of litigation; also enables the public entity to engage in fiscal planning for potential liabilities, and to avoid similar happenings in the future 17

  18. Claims subject to Act: For money or damages; Declaratory or injunctive relief actions where primary purpose is monetary relief; Restitution; and for Reimbursement Exempt Claims: For injunctive, specific, or declaratory relief; For recovery of property wrongfully seized by a public agency; Mandamus actions; Tax refunds; Public employee’s salary/retirement benefits; Bond payments; Unemployment insurance benefits; Claims based on federal law; Claims with their own specific claims filing procedures like FEHA Benefits payable on public employee’s death; and For return of improperly seized items What Types of Claims Are Subject to the Government Claims Act? 18

  19. Government Claims Act - Liability Public Entity Liability: • Abolished except as provided by statute • No liability for its breach of a common law duty, but liability exists for the common law torts of its employees • Statutory liability arises: • Vicariously: Injury caused by act/omission of the employee within scope of employment • Tortiously: Agency is liable for the act/omission of an independent contractor to the same extent as if it were not a public entity • By breaching a mandatory duty unless reasonable diligence is shown in discharge of duty • By a dangerous condition on public property – substantial risk of injury when property used with due care in a reasonably foreseeable manner 19

  20. Government Claims Act - Liability Public Employee Liability • To the same extent as private persons for own acts • Liable for common law torts; may assert any defense available to a private person • A public employee is entitled to defense/indemnification from the agency employer 20

  21. Claim Presentment • Failure to comply with the claims statute bars the claim against the public entity and its employees. • Claims for personal injury, death, or for damage to personal property or crops must be presented to the governmental agency within six months of accrual of action; all other claims must be presented within one year. 21

  22. Claim Presentment – Late Claims • Late claims must also include an “application for late filing” that must be filed with the agency within one year of accrual of claim • There are four valid reasons for a late claim under Govt. Code § 911.6(b): • Mistake, inadvertence, surprise or excusable neglect; • Minority of the claimant during six month period • Physical or mental incapacity; and • Death of the claimant 22

  23. T Minus 6.6 Seconds – Engines IgniteResponding to the Complaint • Within thirty days of service of the complaint, a defendant must serve and file a responsive pleading in the form of an Answer, Demurrer, Motion to Strike, or a Petition to compel arbitration. • No matter the form of responsive pleading chosen, it must generally be filed within 30 days after service of the complaint unless extended by stipulation or court order. 23

  24. Liftoff/Launch T Minus 0 SecondsAnswers • An answer must include whatever denials or affirmative defenses are necessary to controvert the material allegations of the complaint to put the case “at issue” as to the matters alleged that the defendant doesn’t want to admit • An answer cannot be used to claim affirmative relief, which requires a complaint or cross-complaint • If the complaint is verified, defendant must verify the answer. Exception: an answer by a governmental body or officer sued in his official capacity need not be verified (CCP §446; Trask v. Sup. Ct. (1994) 22 Cal.App.4th 346, 350). 24

  25. Answers – Denials • Any material allegation in the complaint that is not effectively denied, is deemed admitted (CCP §431.20(a)) • An answering defendant may make a blanket denial of the whole complaint (a general denial), or may specify denial as to less than all of the complaint (a specific denial) • A general denial is not permitted if the complaint is verified 25

  26. Other Responses • Cross-Complaints: File a case against the Plaintiff or another party about the same issue • Joinder: Makes a non-party a party in the case; anyone who has a stake in the outcome 26

  27. Demurrer • A “demurrer” is a pleading used to test the legal sufficiency of other pleadings by raising issues of law, not fact, regarding the form or content of the opposing party’s pleading • If the defendant has not previously appeared in the action and the demurrer is the defendant’s initial pleading, the filing of a demurrer constitutes a general appearance, subjecting defendant to the court’s personal jurisdiction (CCP §1014) 27

  28. As Pleading: A demurrer may be the defendant’s initial pleading (CCP §442.10) A demurrer is considered a “responsive pleading” to the same extent as an Answer As Motion: A demurrer is also an application for a court order like a motion CCP §1008(a) authorizing reconsideration of rulings on motions applies to demurrers Civil law and motion rules (California Rules of Court 3.1100-3.1370) apply generally to demurrers as well as to motions Demurrer As Motion/Demurrer As Pleading 28

  29. Demurrer Limited By Pleading • A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan, 39 Cal.3d 311, 318 (1985)) • “Face of the complaint” includes matters shown in exhibits attached to the complaint and incorporated by reference; or in a superseded complaint in the same action 29

  30. Demurrer Plus • A demurrer to a complaint (or cross-complaint) can be filed along with a motion to strike • Less commonly, a demurrer can also be filed in conjunction with an answer • Answering and demurring at the same time only makes sense if the demurrer was taken as to some causes of action in the complaint and not others; defendant may choose to answer the remaining counts at the same time 30

  31. Grounds For A Demurrer CCP §430.10 provides for the grounds for objection to a complaint or cross-complaint: • Court lacks subject matter jurisdiction; • Plaintiff lacks capacity to sue; • Nonjoinder or misjoinder of parties; • Another action is pending between the same parties for the same cause of action; • Failure to state facts sufficient to constitute a cause of action; • Failure to allege whether contract sued upon was written or oral or implied by conduct; and • Failure to attach attorney’s certificate required in certain malpractice actions 31

  32. Failure To Raise Grounds • Most of the statutory grounds for objection are automatically waived if not raised either by demurrer or in the answer as affirmative defenses. • The failure to state facts sufficient to constitute a cause of action and the lack of subject matter jurisdiction, however, are not waived and can be raised at any time. • The failure to allege compliance with the governmental claims presentation requirements in an action against a government entity is a non-statutory ground for general demurrer (State of Cal. v. Sup. Ct. (Bodde), 32 Cal.4th 1234, 1239 (2004)) 32

  33. Special Demurrers – Strategy & Tactics • Most grounds for demurrer (“uncertainty,” “lack of capacity,” “defect or misjoinder of parties,” etc.) can be raised either by demurrer or answer • Generally, the sustaining of a demurrer does not terminate the proceeding and the plaintiff is permitted to cure defects by way of an amended pleading • Why then are demurrers filed? 33

  34. Special Demurrers – Pros v. Cons • Advantages: • Loosely pleaded claims are difficult to deny or defend; a special demurrer can obtain better clarity of pleading possibly exposing grounds for defense now, at summary judgment, or during litigation 34

  35. Special Demurrers – Pros v. Cons • Disadvantages: • Special demurrers are rarely worth the time and money required to bring them because most often the defect can be corrected and the court will grant leave to amend. • Little is gained apart from delay. • Alternative: • Before filing a special demurrer, defendant should call plaintiff’s counsel and offer to stipulate to plaintiff amending the complaint to eliminate the defect 35

  36. General Demurrers – Strategy & Tactics • There is no problem of waiver with general demurrers (CCP §430.80) and defendant can attack the complaint for “failure to state facts sufficient to constitute a cause of action” after time to demurrer including by way of motion for judgment on the pleadings or for a directed verdict • Whether to demur is a tactical consideration 36

  37. General Demurrers – Pros v. Cons Advantages – A general demurrer makes sense in several situations: • Where plaintiff is asserting a novel cause of action; • Where it appears plaintiff cannot truthfully amend to allege omitted facts; • Where a summary judgment motion is contemplated; or • Where statute of limitations defense apparent from complaint or matters judicially noticeable 37

  38. General Demurrers – Pros v. Cons • Disadvantages: • Judicial attitudes; • Cost; • Risk of “educating” plaintiff; • Plaintiff’s complaint presumed true on appeal; • Risk of creating bad law on appeal; and • Risk of sanctions • Alternative: • Unless the defendant is certain that the defects in the pleadings cannot be cured by amendment, defendant should always call plaintiff’s counsel, point out the defect, and offer to stipulate to an amendment to the pleadings 38

  39. Motions To Strike • Motions to strike can be used to reach defects or objections to pleadings that are not challengeable by demurrer. Complaints, cross-complaints, answers, and demurrers are all subject to a motion to strike (CCP §435(a)(2)) • Can be used to attack the entire pleading, or any part thereof, even single words or phrases 39

  40. Motions To Strike • Can be made at any time within the time allowed to respond to a pleading, which is typically 30 days from service of the complaint • Can be made in an unlimited civil case and lies either: • To strike any “irrelevant, false or improper matter inserted in any pleading;” or • To strike any pleading or part thereof “not drawn or filed in conformity with the laws of this state, a court rule or order of court.” (CCP §436)) 40

  41. Striking “Irrelevant Matters” “Irrelevant matters” include: • Allegations not essential to the claim or defense; • Allegations “neither pertinent to nor supported by an otherwise sufficient claim or defense;” or • A demand for judgment “requesting relief not supported by the allegations of the complaint or cross-complaint.” (CCP §431.10(b)) 41

  42. Motions For Judgment On The Pleadings • A motion for judgment on the pleadings has the same function as a general demurrer but is made after the time for demurrer has expired • It has a statutory basis since 1994 - CCP §438 • Except as provided by CCP §438, the rules governing demurrers apply 42

  43. Grounds For Judgment On The Pleadings A motion by defendant or cross-defendant can be made on the ground that: • The court “lacks jurisdiction of the subject of one or more of the causes of action alleged;” or • The complaint, or any cause of action therein, “does not state facts sufficient to constitute a cause of action against that defendant.” (CCP §438(c)) 43

  44. T Plus 20 Seconds – Shuttle Rolls Right 180°Case Flow - CMC • Case Management Conference (“CMC”) • Unlimited civil cases only • After 120 days, both sides, the lawyers and the judge meet to talk about how to handle the case • 15 days before the first CMC, file a CMC Statement per California Rule of Court 3.725 • CA Rule of Court 3.724 requires that the parties talk about how to handle the case, what issues to settle before trial, and whether the parties want to try ADR • Both parties or their counsel must attend! 44

  45. Motions Calif. Rule of Court 3.1112 • The papers filed in support of a motion mustconsist of at least the following: • a notice of hearing on the motion • the motion itself • a memorandum in support of the motion • Other papers may be filed in support of a motion, including declarations, exhibits, appendices, and other documents or pleadings. • The papers may either be filed as separate documents or combined in one or more documents if the party filing a combined pleading specifies these items separately in the caption of the combined pleading. 45

  46. DISCOVERY T Plus 60 Seconds – Shuttle Engines at Maximum Throttle 46

  47. Case Flow - Discovery • Building Your Case: Investigation and Discovery • Many ways to investigate your case: take photos, conduct interviews, record data • Free/low-cost information resources: internet, library, government agencies • What you gather is called “evidence” 47

  48. Specific Forms of Discovery • Oral and written Depositions (CCP §§ 2025.010-2028.060); • Interrogatories (CCP § 2030.010); • Inspection, Testing and Sampling of Documents, Things, Places, or Electronically-Stored Information (ESI) (CCP § 2031.010); • Physical and mental examinations (CCP § 2032.010 et seq.); • Requests for Admissions (CCP § 2033.010 et seq.); 48

  49. Specific Forms of Discovery (continued) • Simultaneous Exchange of Expert Trial Witness Information (CCP § 2034.010 et seq.); and • Subpoenas to Nonparty Deponents (CCP § 2020.010(a)) or Business Records Custodians (CCP § 2020.020(b)) 49

  50. Discovery – Problems • Discovery • If you have trouble getting others to “produce” (turn over/give you) evidence, there are several ways to get the evidence • Motion to Compel • Subpoenas 50