Archive for the ‘Litigation’ Category

According to the US Treasury Department, mortgage fraud reports across the country jumped 88% in the second quarter of 2011, with California registering more reports of suspected mortgage fraud per-capita than any other state (see the data from the Treasury Department here).  Much of this increase in reporting is attributed to banks discovering suspicious activity when reexamining loans made during the housing boom (see article from the LA Times here).  The effects of mortgage fraud, however, are felt by home owners, banks, and other smaller non-institutional lenders alike.

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A recent article reporting on a default judgment against a Eureka business owner and its  employee shows why you should never ignore a lawsuit filed against you.

On August 18, the North Coast Journal published an article about a lawsuit filed last year after a fight broke out at Gabriel’s, an Italian restaurant in Old Town, Eureka.   Apparently, a waiter attacked a customer who may have been drunk or on drugs and who was combative.   The customer broke his ankle in the scuffle.   While the Humboldt County District Attorney had considered pressing criminal charges against the customer, no charges were ever filed and the customer instead sued the waiter and one of the owners of Gabriel’s for damages.  Last fall, he obtained a default judgment and now has filed a second suit adding several more defendants to the legal battle.  Read the article here.

A number of friends asked me about the case.  Their biggest questions had to do with the amount of damages awarded – a whopping $2.5 million — against an owner of Gabriel’s and the alleged attacker.   They were shocked at the large amount of damages when the plaintiff’s expenses only totaled about $36,000 and the defendants did not even put up a fight.   I explained to them the concept of default judgments.

Default judgments can be obtained when the defendant does not file a response to the Summons and Complaint in a lawsuit, or does not appear at the hearing.   Default judgments may be set aside or vacated by the court at the request of the defendant for reasons such as mistake, inadvertence, surprise, and excusable neglect.   (See California Code of Civil Procedure sections 473(b), 476(d) and 473.5.)  However, if a judgment is not set aside, it can be enforced by court actions such as the attachment of wages or assets.

From a plaintiff’s perspective, without commenting on this particular case, a lawsuit is a question of enforcing one’s rights.  The reason the damages were so high in the restaurant case may in fact be BECAUSE the defendants did not fight back.  The law is an adversarial, two party system.   If defendants do not appear in court, the plaintiff does not have the opportunity to seek a remedy.   Obviously, if defendants do not show up in court, they also do not have the opportunity to present a defense and it is not the judge’s job to do it for them.

Default judgments are not a plaintiff’s dream outcome by any means.  There are a number of escape hatches for defendants to get them set aside.  The number of escape hatches decreases with time, but there are some that are always available.   Furthermore, since plaintiffs can be limited in their recovery by what they ask for in a default judgment, defaults cannot replace the right to a trial by jury.

Whether you love jury duty or hate it, starting in January, judges must advise that you decisively cannot text or tweet about it.  California Governor Jerry Brown signed a law last week requiring judges to admonish jurors that they are prohibited from conducting research, disseminating information, and conversing via electronic and wireless communications.  2011 Cal. Legis. Serv. Ch. 181 (A.B. 141) (WEST).  The risks for bias or confusion of the issues are simply too high.

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Janssen associate attorney Megan Yarnall was recently admitted to the Oregon State Bar after passing the Oregon bar exam last winter. The Janssen Law Firm represents clients in personal injury, civil and criminal defense, estate planning, and other matters throughout Northern California, including  Humboldt, Del Norte, Trinity, Mendocino, and Siskiyou Counties. Occasionally, our clients encounter matters requiring representation beyond California’s northern border into Oregon. We can now help our clients in these matters with greater ease and efficiency, without seeking outside counsel admitted to practice in the state of Oregon. Should you or your business require such assistance, the attorneys at the Janssen Law Firm stand ready to assist.

In one of the first class actions in which I was ever involved we sued an insurance carrier that had a policy which cheated its insureds out of fairly small amounts.  During discovery we turned up a memo that discussed bonuses to the employees with the slogan “A penny a patient.”  The idea was that, since the insurance carrier had over 20 million patients, if it could find a way to save (cheat) the patient out of one penny, that saved the company $200,000.

Of course who’s going to fight with a major insurance carrier over one penny?  No one.

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Journalist Matt Drange of the Eureka Times-Standard covered the Lavender v. Skilled Healthcare jury trial, writing in depth in a three part series the stories underlying the class action law suit against Skilled Healthcare.  Drange noted that it was the longest civil trial in Humboldt County history, and the $677 million verdict was the largest trial result in the United States in 2010.

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Settlement in Skilled Healthcare suit has been approved by court and praised by nursing home reform advocates.

On December 1, 2010, the Times Standard interviewed The Janssen Law Firm’s Lead Trial Lawyer Timothy Needham about the Humboldt County Superior Court’s Final Approval of the Settlement in the Skilled Healthcare Lawsuit.   The $677 million dollar jury verdict was the largest award ever given by a Humboldt County Jury.

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Text messages are becoming an increasingly common form of communication, even in remote areas like Humboldt County, and this can have a profound effect on both civil and criminal lawsuits.  “Smart” phones and overall increases in phones’ data capacity are creating both headaches and treasure troves for litigation attorneys.   As a cell phone user, you should know that if you are thinking of filing a lawsuit, or may have to defend against one, your text messages could be available to the opposing party and/or the court.  This may even include messages you have deleted from the phone.

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Recently, in preparing to try a seven-month jury trial in Humboldt County,  I tried to find an article with advice on how to prepare for a marathon trial.   Surprisingly, there was very little on the subject.  Therefore, I turned to my usual sources (attorneys who’ve been there) and obtained the following insights, all of which proved true:

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On September 10, 2010 the Honorable W. Bruce Watson granted preliminary approval to the settlement of the longest civil trial in Humboldt County history.   The settlement comes after the jury returned a $677 million dollar verdict in July.   Plaintiffs’ counsel Timothy Needham and Michael Crowley advised the Eureka Times-Standard that they were confident the settlement was in the best interest of the class given the threat of bankruptcy that faced the nursing home entity after the verdict was announced, and given that the court’s injunction order will guarantee adequate staffing in Skilled Health’s facilities.

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