Monday, July 7, 2014

A Yorky and Her Wardrobe

One of my dogs, Tina, was caught the other day trying to make some tough decisions about her wardrobe - seems she has too many clothes in her closet.

Seems she was overwhelmed with all the choices - I mean she's only 3.4 pounds and frankly doesn't really like all the attention she gets when she dresses up anyhow.

Not unlike a California case published last week about a little subrogation dispute and too many available choices confusing the courts about jurisdiction, applicable law, and some inventiveness on the part of counsel.

And though counsel tried to dress up the claim, the 6th District Court of Appeals wasn't impressed.

Attorney John Stein of The Boccardo Law Firm filed an action for damages in San Joaquin Superior Court on behalf of Albert Carabello, who, while acting in the course and scope of his employment, was injured when his pickup collided with a vehicle operated by Beverly Casby.

Old Republic Construction Program Group provided workers' compensation insurance coverage and paid Carabello over $100,000 in benefits.

Old Republic filed a complaint in intervention in the San Joaquin Superior Court, asserting a right to be reimbursed for its payments to Carabello.

In answer to both Carabello's and Old Republic's complaints, Casby raised a Witt v. Jackson defense, which is based on a 1961 California Supreme Court case that limits the ability of an employer, or its insurer, to obtain reimbursement out of an injured worker's recovery against a third party where the employer's own negligence contributed to the worker's injuries.
So many choices...
Carabello and Casby later agreed to settle for Casby's $100,000 auto liability insurance policy limit. Casby's auto liability insurance carrier made the settlement check payable to Carabello, Boccardo and Old Republic.

Stein and counsel for Old Republic then signed a written agreement for the money to be deposited into an interest-bearing account while Old Republic's reimbursement claim was worked out. The agreement between Stein and Old Republic stated that the signatures from Stein and Old Republic's attorneys would be required to withdraw any money from the account where the settlement check was deposited.

In January 2010, counsel for Old Republic filed a request to dismiss Old Republic's complaint in intervention with prejudice.

Upon learning of Old Republic's dismissal of the complaint in intervention, Stein filed a motion to authorize the release of the settlement funds to Carabello, arguing that by dismissing its pleading, Old Republic had forfeited any right to litigate the issue of employer negligence, and thus to recover on its lien.

The trial judge who had been presiding over the case, however, found the court no longer had jurisdiction to grant the requested relief.

On July 9, 2010, Stein wrote to counsel for Old Republic indicating that he intended to distribute the deposited funds, and he did so one week later.

Old Republic filed a petition with the Workers' Compensation Appeals Board in September 2010, demanding disbursement of the settlement money that Stein had already given to Carabello.

A workers' compensation judge denied Old Republic's petition, finding he too lacked jurisdiction to grant the relief sought by Old Republic. But the Workers' Compensation Appeals Board disagreed on reconsideration and ordered the matter remanded for a trial on Old Republic's entitlement to the money.

Old Republic then filed a breach-of-contract claim against Boccardo and Stein, asserting they had breached the written agreement on how the settlement money was supposed to be handled. Old Republic also asserted claims for fraudulent inducement, conversion, breach of fiduciary duty and negligence.

Boccardo and Stein demurred, and a trial judge sustained the demurrer as to the conversion and fiduciary duty claims.

Boccardo and Stein then filed a motion to dismiss the remaining claims under Code of Civil Procedure Section 425.16, which is known as the "anti-SLAPP" statute.

This statute provides a means for a party to obtain the dismissal of strategic lawsuits filed to chill a valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.

The trial judge granted the defendants' motion to strike Old Republic's fraud claim only, and Boccardo and Stein appealed.

The 6th District Court of Appeal said that it "could not be seriously suggested that withdrawing funds from a bank account constitutes communicative conduct," and there was no indication that the defendants' non-communicative conduct in accessing the settlement money had any connection to an issue of public concern or interest.

It therefore falls outside the protection of the anti-SLAPP statute, the court said.

Seems to me to be a matter common sense.

But certainly counsel can not be said to lack imagination or creativity.

So many choices, but not all of them are good ones. Just ask Tina.

To read the decision, click here.

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