How to Vacate a Bad Legal Judgment in California Civil Court - PowerPoint by jwj34226


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11/14/2010              1

•   Getting paid - fee arrangements
•   Conflicts of Interest
•   Dealing with unrepresented parties
•   Rules of Professional Conduct

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   Getting Paid Fee Arrangements

• Writing is good, verbal is bad.
• The California Business and Professions Code § 6147 and
    6148 provides guidance § 6147 deals with contingency
    arrangements that are not normal for Landlord and Tenant
    matters, § 6148 provides:
     – If it is reasonably foreseeable that total expense to a client, including
       attorney fees, will exceed one thousand dollars ($1,000), the contract
       for services in the case shall be in writing.
     – At the time the contract is entered into, the attorney shall provide:
         • a duplicate copy of the contract signed by both the attorney and the
               client, or
             • a duplicate copy of the contract signed by the client's guardian or
               representative, to the client or to the client's guardian or representative.

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   Getting Paid Fee Arrangements
     – The written contract shall contain all of the following:
        • Any basis of compensation including, but not limited to;
                  –   hourly rates
                  –   statutory fees
                  –   flat fees
                  –   reimbursables
                  –   and other standard rates, fees, and charges applicable to the case /transaction
             • The general nature of the legal services to be provided to the client
               [Inclusions but more importantly Exclusions].
             • The respective responsibilities of the attorney and the client as to the
               performance of the contract [cooperation and response].
     – All bills rendered by an attorney to a client shall clearly state the
        • the time, rate, sum
        • basis for calculation
        • or other method of determination of the attorney's fees and costs
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   Getting Paid Fee Arrangements
     – Bills for the cost and expense portion of the bill shall clearly identify
       the costs and expenses incurred and the amount of the costs and
     – Upon request by the client, the attorney shall provide a bill to the
       client no later than ten (10) days following the request unless the
       attorney has provided a bill to the client within thirty-one (31) days
       prior to the request, in which case the attorney may provide a bill to
       the client no later than thirty-one (31) days following the date the
       most recent bill was provided.
     – The client is entitled to make similar requests at intervals of no less
       than thirty (30) days following the initial request. In providing
       responses to client requests for billing information, the attorney may
       use billing data that is currently effective on the date of the request,
       or, if any fees or costs to that date cannot be accurately determined,
       they shall be described and estimated.

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   Getting Paid Fee Arrangements
     – Failure to comply with any provision of this section
       renders the agreement voidable at the option of the client,
       and the attorney shall, upon the agreement being voided,
       be entitled to collect a reasonable fee.
     – This section shall not apply to any of the following:
         • Services rendered in an emergency to avoid foreseeable prejudice
               to the rights or interests of the client or where a writing is
               otherwise impractical. [Confirm after the fact]
             • An arrangement as to the fee implied by the fact that the attorney's
               services are of the same general kind as previously rendered to
               and paid for by the client. Consider general Engagement Letter.
             • If the client knowingly states in writing, after full disclosure of
               this section, that a writing concerning fees is not required.
             • If the client is a corporation.
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   Getting Paid Fee Arrangements
• Some considerations
    – The scope of the representation is often unclear at the inception.
    – Sound practice dictates confirmation via letter specifying what you will be
       • Limitations; or
       • Lack thereof.
    – Any specific exclusion with a catch all.
    – Things offered or suggested and declined.
    – Clients do not like CYA letters [skillfully draft].
• Evictions in specific:
    – Unclear nature of process:
       • short and inexpensive
       • long and expensive
       • is often beyond the control of the counsel

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   Getting Paid Fee Arrangements
• Eviction Mills vs. Pro per vs. Full Representation
     – Eviction mills – consist of lawyers who do nothing but unlawful detainers. If
       the matter becomes contested he often assigns the case to another counsel
       who prefers litigation matters.
     – Pro per – some landlords and property management firms handle unlawful
       detainers on their own;
         • all that ends well;
         • Broker, Property Manager – E & O insurance – not!
     – Full representation - many attorneys require larger advances for unlawful
       detainers than for other cases, because the attorney may have to invest
       substantial time in the case before the client receives the first bill. Here are
       some of the unknowns;
         • court appearances;
         • briefs necessary if the case becomes contested; and
         • collection of a judgment.

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   Getting Paid Fee Arrangements
• Types of Agreements:
     – Contingency Fee - is an agreement for legal services under which the attorney is paid
       only if he or she attains a specified result for the client (such as securing a money
       judgment in the trial of a personal injury action). A contingent fee is generally paid out
       of the client's recovery in the action for which the attorney was retained.
     – Retainer Agreement - exists when a client pays an attorney a specific sum of money to
       secure that attorney's availability over a given period of time. The attorney earns the
       retainer as soon as it is paid, since he or she is entitled to the money regardless of
       whether or not any legal services are actually performed for the client
     – Advance Fee - is usually made to cover expected hour fees, costs, expenses, or services
       in connection with a particular case or undertaking (such as the incorporation of a
       business). The money advanced under this type of arrangement is not earned until the
       legal service involved is actually performed. As a matter of practice, an attorney must
       deposit an advance fee payment in an interest bearing trust account.
     – Engagement Letter – sets forth the parameters of a particular engagement or a series of
       projects and the basis for the compensation (normally hourly fees). You normally see
       this type of arrangement used by transaction attorneys and not litigators. The attorney
       bills after the services are rendered.

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   Getting Paid Fee Arrangements

• Terms of the Retainer or Engagement Letter:
     – identify all persons to be evicted
     – explain the consequences of failing to name a
       party who might later assert a claim of possession
     – If a flat fee
        • the number of consultations, in person or by telephone,
             that are included in the fee, and their length

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   Getting Paid Fee Arrangements
• Limitations
     – does not obligate the attorney to:
        • defend the landlord if the tenant brings an affirmative
                 action claim
             •   ejectment
             •   one proceeding only
             •   appeals
             •   writs;
             •   other procedural options:
                  – Negotiate;
                  – Find alternative space.

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   Getting Paid Fee Arrangements
• Fees
     – As a general rule your compensation is left to the retainer,
       advance fee or engagement letter.
     – Except as expressly provided by statute, the "measure and
       mode" of compensating attorneys are left to the agreement
       of the parties. The California Code of Civil Procedure
        • “Except as attorney's fees are specifically provided for by statute,
             the measure and mode of compensation of attorneys and
             counselors at law is left to the agreement, express or implied, of
             the parties; but parties to actions or proceedings are entitled to
             their costs, as hereinafter provided.”

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   Getting Paid Fee Arrangements
     – Recovery from other party.
        • Lease and rental agreements often provides for
             attorneys’ fees and costs
              – Older provisions:
                  • Cover litigation
                  • Omit ADR
                  • Omit enforcement
                  • Omit enforcement of Lease short of litigation

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   Getting Paid Fee Arrangements

     – ADR
        • Concerns
                 – Fairness;
                 – Waiver of rights;
                 – Prejudice.
             • Process
                 – Negotiation;
                 – Mediation;
                 – Arbitration/Litigation.
     – Attorneys’ fees should be plead as an item of damages,
       because such fees are recovered as costs.
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   Getting Paid Fee Arrangements
• Non-negotiated Leases
     – Attorneys’ fees and costs recoverable only by the
     – Impact of California Civil Code §1717(a) Goose/Gander
        • “In any action on a contract, where the contract specifically
               provides that attorney's fees and costs, which are incurred to
               enforce that contract, shall be awarded either to one of the parties
               or to the prevailing party, then the party who is determined to be
               the party prevailing on the contract, whether he or she is the party
               specified in the contract or not, shall be entitled to reasonable
               attorney's fees in addition to other costs.”
             • Under California law, however, such a provision is interpreted to
               provide for recovery of attorney fees by the prevailing party,
               regardless of language limiting the right to one party.
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   Getting Paid Fee Arrangements
• Danger, Danger, Danger Will Robinson!
• Make and Offer of Compromise and Compromise your Client?
     – Wong v Thrifty Corp. (2002) 97 CA4th 261, 264, 118 CR2d 276.
        • Tenant Rite Aid (“Rite”) vacated the premises
        • Landlord (“Wong”) inspected and alleged in a letter to Rite you
          owe $73,188.59 in repairs;
        • Rite replied to Wong: “Wong, you are wrong and your repairs are
          only $8,794.09”;
        • Prior to trial Rite made a California Civil Code Procedure §998
          “offer of compromise,” for $35,000 which offer included costs
          and attorney fees;
        • Wong said to Rite: “Rite, you now have the right spirit but still
          not right, I need the right aid; and your offer does not cover my
          attorneys’ fees and costs.”

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   Getting Paid Fee Arrangements
             • Rite said to Wong: “Wong, you are still wrong but aid is good and
                 we will aid you to see things our way, here is another §998 offer
                 for $43,600,” (Oops this offer was silent as to costs and
                 attorneys’ fees);
             •   Wong said to Rite: “Rite, when you are right your are right;” and
                 Wong accepted and judgment was entered accordingly;
             •   After Wong received the payment of the $43,600 Wong called
                 Rite and said: “Hi Rite, something is not right your check did not
                 include my attorneys’ fees and costs”;
             •   Rite said to Wong: “Wong, you are wrong we settled via a §998
                 compromise and there is no prevailing party, therefore it is not
                 right for you to ask for your attorneys’ fees and costs”;
             •   Wong said to Rite: “Rite, I think you need a little aid to see things
                 my way and to make things right; see you in court and bring your
             •   The court awarded Wong his attorneys’ fees and costs’;
             •   Moral of Case: “Sometimes Wong is right and Rite is wrong.”

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   Getting Paid Fee Arrangements
• As a general rule when the Lease is silent as to
   attorneys’ fees and costs they are not collectible in
   an unlawful detainer action.
    – Exceptions [not an exhaustive list]:
       • Mobilehome tenant is entitled to an award of reasonable attorney
               fees and costs as set for in the California Civil Code §798.85.
               Note be sure to read California Civil Code §798.86 re damages
               and punitive damages;
             • Discrimination re the Unruh Act set forth in the California Civil
               Code §§51-52;

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   Getting Paid Fee Arrangements
             • Landlord’s unlawful as set forth in the California Civil Code §789.3;
                   –   Terminate utilities;
                   –   Restrict access;
                   –   Remove doors or windows;
                   –   Remove Tenant’s personal property.
             • Landlord’s violation of the protections set forth in the California Civil
                 Code §1940.1(b) of the residential hotel tenancy rights;
             •   Landlord’s violation of the protections set forth in the California Civil
                 Code §1942.4(b) re the statutory habitability requirements;
             •   Landlord’s violation of California Civil Code §1942.5(g), re a retaliatory
             •   Landlord’s violation of California Civil Code of Procedure §527.6(i) re
                 an action to obtain an injunction re harassment;
             •   Enforcement of a public interest pursuant to California Civil Code of
                 Procedure §1021.5; and
             •   Enforcement of an important public rights California Civil Code of
                 Procedure §1021.8, Attorney General is prevailing party.

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   Getting Paid Fee Arrangements
• Must have your brains on:
     – Landlord must consider whether he desires to have an
       attorneys’ fees and costs provision:
        • Commercial – probably yes
        • Residential
                 – No Rent control – probably yes
                 – Rent control – probably no
             • Strategic move for both Commercial and Residential Landlord’s
                 – Limit to certain type actions
                 – California Civil Code § 1717 – enforceable
                     • Only unlawful detainers?
                     • Mutual for Tenant?

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                  Conflicts of Interests
• Conflicts check
     – Collect accurate and complete information from the
        • the names of all clients
                 –   Maiden
                 –   AKAs
                 –   DBAs
                 –   Entities
                       • Trusts
                       • Corporations, subsidiaries, affiliates, parent etc.
             • names of all known opponents
             • Interview for the latent conflicts
                 – witnesses
                 – third parties
             • Payment from third party?
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             Conflicts of Interests
• An attorney generally cannot
     – agree to accept or continue to represent the client without
       having disclosed in writing certain previous legal,
       business,     financial,  professional,     or     personal
     – accept or continue to represent a client without the
       client's informed written consent when the potential
       conflict is between that client and another client
       represented by the attorney in the same or another
     – See California Rules of Professional Conduct 3-310.

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                   Conflicts of Interests
• Some Keys
     – Writing is good, verbal is bad
        • Agreement
        • Letter
        • Memo
        • Invoice
     – Existing and personal relationships - disclosure
        • Dating
                  – Directly
                  – Indirectly
             •   Social
             •   Golf
             •   Clubs
             •   Ex-family member

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                Conflicts of Interests
• Cotenants or Colandlords
     – Danger
        • High
               –   Living together - Tenants
               –   Non-blood related family – inheritor Landlord
               –   Roommates – Tenants
               –   Non-blood related partners – Landlord or Tenant
             • Low
               – Married couple
               – Family business blood related minus the grubby group

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                Conflicts of Interests
• How do parties conflict:
     –   Negotiate or sue
     –   Fight the eviction or vacate the premises
     –   Attorneys’ fees and cost
     –   Settlement proposals
     –   Strategy of litigation, or ADR
     –   Who caused the default
     –   Win the lawsuit lose the relationship
• Difficult to perform proper disclosure. Client’s eyes glaze
    over as you paint the dooms day “potential conflicts,” but
    you must do. Scenarios should be set forth in writing as an
    example but not limited to.

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                  Conflicts of Interests
• Danger, Danger, Danger, run away.
     – My previous attorney was incompetent and I need a good
        • Retain and then put your malpractice carrier on notice
        • I would strongly advise that prior to accepting this case contact
               the previous attorney and discuss. Although the attorney may be
               prohibited from relaying too much information often the tone is
               all you need
             • Changes of counsel is a danger sign that the client may be lying,
               hard to work with, nonresponsive, a bad payor, have unrealistic
               goals for the litigation or about attorneys’ fees, costs and results
             • Lies vs. perception
             • Communication as an art – listening

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             Conflicts of Interests

• Avoid representing a "professional deadbeat"
  Tenant or the “perpetual litigator” Landlord.
• These type of clients often breach whatever
  agreement they have entered into and use
  litigation and you as a convenient extension

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                    Conflicts of Interests
• If you turn down a case/client:
     – Writing is good, verbal is bad:
        • strong oral warning that the prospective client should immediately
                 consult other counsel
             •   immediately send letter confirming date of conference and that you do
                 not represent the client
             •   letter should contain deadlines for statutes of limitations; of any
                 pleading or other deadline
             •   inform of the material adverse consequences that may result if not
                 represented, (e.g. entry of a default judgment and eviction by the sheriff
             •   refer the rejected party to the local bar association lawyer referral
             •   refer the rejected party or to the attorney listings in the Yellow Pages
             •   Caution when providing forms for the in pro per

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                Conflicts of Interests
• Limited representation – what is the deal
     – Writing is good, verbal is bad
     – Must be specified and in writing
        • File answer only
        • Attend negotiation
        • MSC only
        • Mediation only
        • Take a deposition - summary
        • File a motion to quash service of summons
        • Appear at any one hearing on a motion
        • To serve written interrogatories or other discovery
        • Pro per assistance
        • Review and comment to a Lease only, client to negotiate
        • Small lease vs. Large lease
        • Sans frugal client
               – Asks for A and will pay for A - good
               – Demands B but will only pay for A - bad

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               Conflicts of Interests
• Contact information and obligation of client to be
     –   ground rules
     –   logistical arrangements of their relationship
     –   Fax
     –   Phones, office, home and cell
• Communication can lead to problems
     – special confidentiality and security needs of the client:
        • Client may not want staff to know problem exists
        • Client may not want spouse to know problem exists
        • Privacy must be maintained

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               Conflicts of Interests
• Waiver of attorney client privilege:
     – Client discloses confidential information to others
     – Discussion of case with opponent or third party
        • Big Boy, Big Girl Syndrome:
              – Client instructed not to discuss the case with anyone, particularly anyone
                connected with the opposing party (innocent disclosures to brokers,
                appraisers, insurance, lenders etc.). Loose lips sink ships;
              – Any inquiry should be diverted.
• Keep Counsel up to date
     – client should be instructed to immediately report any new and
       relevant events (emphasis on relevant);
     – the receipt of any thing from the other party;
     – Urgent contact procedure:
         • Voicemail or answering systems;
         • Hotline cell (long time clients only);
         • Follow - up if attorney does not respond within twenty-four (24) hours.

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               Conflicts of Interests
• Tenant issues
     – Landlord Lockout
        • Laptop, portable equipment to keep business going
        • Important documents
        • Irreplaceable items (pictures, heirlooms etc.)
        • May win suit and still lose
     – Client specific
        • ill, disabled, illiterate, or not fluent in any language spoken by
             the you
               – Translator
               – Home visits
               – Social worker

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  Dealing with Unrepresented Parties
  •      Party Represented
             –   Strictly prohibited per the California Rules of Professional
                 Conduct 2-100.
                      • Parties - officers, directors, or managing agents of a
                         corporation or association, and a partner or managing agent of
                         a partnership.

  •      Unrepresented Party
             –   Extreme caution should be used – what do you do when politely
                 walking away is not an option:
                      • Suggesting settlement:
                              –     Settlement form
                              –     Provide time to review with attorney 72 hours
                      • Fact or Law
                      • Impropriety:
                              –     Threats
                              –     Gestures

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    Rules of Professional Conduct
             Rules of Professional Conduct of the State Bar of California, the
              most recent version of which was promulgated July 1, 2004 the
              California Business and Professions Code §6077
              “The rules of professional conduct adopted by the board, when
                 approved by the Supreme Court, are binding upon all members of
                 the State Bar. For a willful breach of any of these rules, the board
                 has power to discipline members of the State Bar by reproval,
                 public or private, or to recommend to the Supreme Court the
                 suspension from practice for a period not exceeding three years of
                 members of the State Bar.”
                The rules are also found in the California Rules of Court. The
                 conduct of California attorneys is governed by these rules.
                We are not governed by the American Bar Association's Model
                 Rules of Professional Conduct, although the two sets of rules are
                 similar in many respects.

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               CLOSING REMARKS

                                                            Design and
               Landlords   Tenants      Brokers             Construction
     Propert                                      Advisor
        y                                         s


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      When you lose your temper that is not all you lose
      Fight hard for your client but fight fair
      Never
        give up
        intentionally embarrass
        take advance of your opponents innocent mistake
      We either prepare for success or failure
      Do the right thing not some of the time; do the right
       thing all of the time
      Treat your opponent with courtesy and respect; even
       if undeserved;
      If you play win at all costs; it will
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            Kindness is a good thing
            Nice guys do not finish last
            Admit mistakes
            Do not back door; if you didn’t earn it through
             negotiations don’t try to draft it in
            Live within the spirit of the deal
            Silence is golden
            20 years to build solid reputation and 2 minutes to
             lose it
            Do your best at all times
            Perfection is unattainable; but perfection is the goal

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