News Items Regarding Morris & Stone, LLP
Morris & Stone Scores a "Hat Trick" -- Three Appellate Victories in Three Months (with a Fourth for Good Measure)
[Santa Ana -- Court of Appeal] Appeals can take two years, and there is no way to know just when the Court of Appeal or Supreme Court will render its opinion. So it is an exciting time when a long-awaited opinion is rendered, especially, of course, when that opinion is in the client's favor. You can imagine the excitement at Morris & Stone when three appellate decisions came in, back to back to back, all of them winners. The first involved an important contract law issue, and the second two arose from procedural issues. For icing on the cake, a fourth opinion was issued days later. In this last case we prevailed on seven of the nine issues raised on appeal. And while the plaintiff/appellant thus technically prevailed on the other two issues, he immediately dismissed the case since the surviving causes of action did not provide for the recovery of damages (in other words, our clients won).
Trial Victory --
Morris & Stone Recovers Triple Damages for Client
When is a breach of contract also fraud? When the party never intended to perform.
When do you get triple damages and all of your attorney fees for fraud? When you hire Morris & Stone (although your results could differ).
In this case, our client provided some money to a business that was never paid back. Her loan to the company had been made on the assurance that the money would be used in the business. We sued, and defendant could not explain what had happened to the money. So we not only sued for breach of the loan agreement, we convinced the court that these facts went beyond mere breach of contract and constituted theft. On that basis, we used a criminal code section to obtain a judgment for three times the amount of the money loaned to the business.
Appeal Victory --
Million Dollar Verdict Reversed
After a close examination of the record and all the testimony at trial, we agreed to handle the appeal of a million dollar judgment. There was simply no way to justify the jury's award. The damage award consisted of different components, and they did not make sense when taken together.
In our appeal briefs, we showed that none of the evidence presented by defendants would justify the award, and the Court of Appeal agreed. The damages were all thrown out, and the matter was sent back to court for a new trial.
For the Millionth
Time, Listen When We Offer a Walk-Away
It can be hard for some to view a court dispute with the dispassionate eye of a businessperson looking only at the bottom line. Some attorneys, intentionally or not, fuel the litigation fever with unrealistic promises of what can be accomplished. I have suggested repeatedly here and elsewhere that when an offer of a walk-away comes, an attorney and his client should take a very hard look at that offer. The tendency is to say, "if I was willing to walk away, I never would have sued in the first place." But litigation is fluid and changing, and while it might have made perfect sense for you to file an action to, say, fight over ownership of a business, that may no longer be the case if the business has cratered in the interim or you went off and started a new business.
In this dispute between two business owners, our client wanted only to be left alone to start his own business, but his former business partner thought he could use the legal system to keep our client from competing with him. We repeatedly told plaintiff's counsel that plaintiff would never prevail and that he should walk away. There was no reason for the fight; the two businesses could have happily co-existed and our client even offered to continue to help with the prior business. Counsel and her client steadfastly refused to dismiss, but after spending an estimated $250,000 in attorney fees, on the eve of trial when he could no longer ignore the fact that he would never prevail, plaintiff dismissed the action. Without our client's offered expertise, the business failed. Plaintiff not only failed in preventing our client from opening his own business but Plaintiff lost the original business.
One of our latest anti-SLAPP victories provides a beautiful illustration of a “stealth” SLAPP suit that the plaintiff’s attorney failed to recognize, to the great expense of his client.
In this case our (future) client’s business partner, we’ll call him Freddy Fraudster, opened a credit card account at a local bank using our client’s personal information. When our client discovered what Freddy had done, he contacted the bank and informed the personnel there that Freddy had committed fraud, and based on this report the bank closed the account and reported the matter to the police. Our client also filed a police report, and filed for a restraining order against Freddy.
Freddy was not happy. He had a long term relationship with the bank, and based on the report by our client, the bank closed his accounts and would have nothing further to do with him. Apparently thinking the best defense is a good offense, and hoping that winning the race to the courthouse might give him some leverage, Freddy filed an action against our client. He claimed that our client had authorized him to open the account, and that the report to the bank was therefore defamatory since it accused him of fraud.
Do you see why Freddy’s action in Superior Court was a SLAPP suit? Opposing counsel didn't, but we recognized that this was a SLAPP suit and successfully brought an anti-SLAPP motion. You see, a SLAPP suit is one that tries to block a person’s right of petition. Freddy’s attorney realized that the report to the police and the application for the restraining order were protected rights of petition, but he mistakenly thought that the report to the bank, requesting that the credit card be cancelled, was not a petition for redress and therefore did not fall under the SLAPP statute because it did not involve any government agency. No doubt, he thought that by suing our client for defamation, he could make all his evil deeds go away and get back in good stead with the bank by offering to dismiss the case if our client would withdraw his remarks to the bank, court and police. Now it sounds like a SLAPP, doesn’t it?
The interpretation of the SLAPP statutes by Freddy’s attorney was far too narrow. Consider. One day you run a credit report on yourself and you find that someone has fraudulently opened a credit card in your name. What is the first thing you are going to do? Call an official government agency? You might do that eventually, but first you are going to call the credit card company and tell them to cancel the card. Thus, contacting the credit card company, or in our case the bank, is a natural part of the entire “right of petition.”
It’s very similar to the litigation privilege. I occasionally see cases where a defendant tries to sue the plaintiff and his attorney, claiming that the demand letter sent by the attorney was defamatory because it falsely claimed the defendant did something illegal. But under Civil Code section 47, anything said in conjunction with litigation is privileged and therefore not defamatory. The demand letter from the attorney takes place before legal action is ever filed, but it is still part of the litigation process.
So it was here. The report to the bank occurred before any “right of petition” was pursued with a government agency, but calling to cancel the credit card was a natural part of that process. If a plaintiff were permitted to SLAPP a defendant by focusing on the activities leading up to the actual right of petition, then the intent of the anti-SLAPP statutes would be subverted. We explained that to the court, and our motion was granted.
Victory -- The Case of the Custom Motor Coach
This was a relatively small case, but it was particularly satisfying because we obtained a complete victory at a very low cost to the client.
Our client lived in Michigan and owned a very high-end motor home that he wanted to sell. This was no camper shell; it was a motor coach you might expect to see Willie Nelson using for tours. Our client put it up for sale on the Internet, on a Michigan website, and it was soon seen by a prospective buyer in California.
The buyer and our client corresponded many times by email, and eventually agreed on a price. The buyer never traveled to Michigan to see the motor home, but our client had provided innumerable photos. The buyer transferred the funds to our client for the purchase, and arranged for a shipping company to pick up the motor home in Michigan and deliver it to him in California.
The buyer was thrilled with what he received. Over the next year, he sent repeated emails to our client, just to tell him how happy he was with the purchase.
But then a problem developed. Apparently there is a hierarchy in the high-end motor coach world, like you might find among those with private jets. While giving a tour of the motor home to another owner, that person told the buyer that this wasn't a "real" QR3, but rather was a QR2 with the upgraded kitchen option, giving the appearance that it was a QR3 (I'm just making up these model numbers). And apparently in the motor coach world, owning a QR2 is looked down upon.
This was an outrage to the buyer. He had seen the photos of the kitchen, and that was why he thought he was buying a QR3. He never would have purchased a QR2. Never mind that our client had never represented the motor home was a QR3, or that the buyer had never communicated that he had some special need for a QR3. He argued that our client should have known that someone looking at the upgraded kitchen might think it was the QR3, and he should have warned our client that he was actually buying a QR2.
Utter nonsense, of course, but that did not prevent the buyer from serving our client with a summons for an action in Orange County Superior Court. After using the motor home for nearly two years, the buyer was claiming fraud and demanding the return of the entire purchase price. The client contacted us, asking us to represent him in the action. He was surprised when we asked only for a small retainer, but I suspected we could dispose of this action pretty quickly.
I brought a motion to quash the summons for lack of personal jurisdiction. Such motions are tough to win, because jurisdiction is very broad. Clearly our client had sold the vehicle to a resident of California, and under normal circumstances that could have subjected him to jurisdiction here. But the key was the method of delivery. The buyer had arranged for delivery of the motor home. If our client had shipped the vehicle to California, then likely there would have been jurisdiction because he would have been targeting this State. But since the buyer had traveled to Michigan (through his shipping company) to make the purchase, our client had never directly targeted the state or "availed himself" of the laws of California.
The court agreed, and the case was dismissed.
[UPDATE:] Although a great victory, the successful motion to quash would not have been as rewarding if the buyer had simply responded by filing the action in Michigan. The client still would have ultimately prevailed there on the merits, but he would have had to incur the time an expense of defending against the action. Thankfully, the client checked in long after our victory to report he never heard from the buyer again. Apparently the buyer had filed the frivolous action in California hoping to extract a settlement or a buy-back of the motor coach, but was not willing to travel to Michigan to pursue that strategy.
Anti-SLAPP Victory -- "If You Sue Me, I'll Sue You!"
This case was especially satisfying because it was not a classic anti-SLAPP case involving defamation, but we persuaded the judge that the matter fell under the anti-SLAPP laws.
SLAPP stands for Strategic Lawsuit Against Public Participation. A "SLAPP suit" is one designed to silence a defendant, to prevent him from criticizing the plaintiff or, in this case, to keep him from taking a matter to court. Here, our (future) client had entered into a settlement agreement with the defendant in a prior action. The settlement agreement required the defendant company to pay damages to our client, and contained a confidentiality agreement. Two years after the settlement agreement was signed, the defendant had still not paid the damages to the plaintiff, so he retained our firm to sue to collect the money due under the agreement.
After the defendant company could not be persuaded to pay the money voluntarily, we filed an action for breach of contract, attaching a copy of the settlement agreement. The defendant answered the complaint and also filed a cross-complaint, claiming that it was a breach of the confidentially agreement to attach the settlement agreement to the complaint. Incidentally, counsel for defendant had discussed with me his intention to cross-complain on this basis, and I had warned him that would be a really bad idea. He did so anyway.
We brought an anti-SLAPP motion, because a case whereby one is suing for being sued is a clear SLAPP. The court granted our anti-SLAPP motion, threw out the cross-complaint, and the company is on the hook for more than $15,000 in attorney fees.
Victory -- The Case of the Outraged City Council
In this case, our (future) client addressed a city council meeting on a matter she felt was important to the city. Specifically, the city had been rocked by some controversy involving city council members, and our client was speaking to the issue of how the newly-elected council members should go about performing their duties. To illustrate the point, she cited the example of a former council member who had taken money from special interests. The city council member in question took umbrage with the accusation that she had acted unethically, and sued our client for defamation for the comments she had made at the city council meeting. We were retained to fight the defamation action.
We disposed of the action with a hard-fought anti-SLAPP motion. The council member had attempted to argue that the comments at the meeting were "illegal" because the City's procedures require that comments at city council meetings be "civil". Predictably, the court understood that even if the words were interpreted to be rude, a city council’s guidelines do not amount to law, and violating them does not amount to criminal conduct. The court granted our anti-SLAPP motion, striking the defamation complaint and entering judgment in our favor. The court also awarded us over $18,000 in attorney fees against the Plaintiff.
The Morris Law Firm Becomes Morris & Stone, LLP
The Morris Law Firm is proud to announce that, effective December 1, 2007, Deanna Stone Killeen became a partner in the firm. The firm name will be changed to Morris & Stone, LLP.
Deanna Stone Killeen graduated Summa Cum Laude with highest honors from Whittier Law School, in Costa Mesa, California. During her time in law school, Ms. Stone Killeen earned eight CALI Excellence for the Future Awards which are awarded to the student in each law school course achieving the top grade. Additionally, Ms. Stone Killeen was presented with the coveted West Outstanding Achievement Award in 2004, which is awarded to only four law students each year.
Ms. Stone Killeen practiced as a paralegal with The Morris Law Firm for 10 years prior to obtaining her law degree, and has a total of 15 years legal experience in the areas of civil litigation, business litigation, employment law, and legal malpractice.
Victory for The Morris Law Firm in San Diego Federal Court
"It just doesn't pass the smell test." That was the statement used by Aaron Morris in his closing argument to describe the way in which the defendants had manipulated things in order to avoid paying commissions to our client. A unanimous jury agreed, and awarded our client $500,000 in damages, which grew to over $725,000 with attorney fees and costs. Defendants were represented by James McCarthy from the Cincinnati law firm Katz, Teller, Brant & Hild and Robert Rose from the San Diego law firm Rose & Associates, who had to learn all over again the old adage, "it's not what you say, it's how you say it." For the complete story, go to Champagne Wishes and Bubble-Gum Dreams.
The Morris Law Firm Makes a Major "Withdrawal" from Bank of America
[Long Beach Superior Court] Our business client suffered a serious loss of reputation when Bank of America closed two of its checking accounts without any notice, causing several checks to bounce. Our client asked only for a letter of apology, so that it could show the letter to its customers and explain that the snafu had been the fault of Bank of America. Bank of America refused. We were then retained, and we made the same request. Bank of America again refused, claiming that it was permitted to close the accounts without notice pursuant to the agreement between the parties, and stated we could never establish liability. Never say never. The jury told Bank of America to get out its checkbook and write our client a check for nearly a quarter of a million dollars. Bank of America was very ably represented both by its own in-house counsel and Tim Lambirth, Holly Hayes and Janet Catmull from the the firm of Ivanjack & Lambirth. For more details, see our Victories page.
Aaron Morris Named "Attorney for the New Millennium" by Consumer Business Review
Congratulations to Aaron Morris. Consumer Business Review, in conjunction with the Daily Pilot newspaper, named him "Attorney for the New Millennium".
The Morris Law Firm Collects $75,000 for its Client from Opposing Counsel
He said our complaint would never survive, he said we would never win, and once we did, he said we would never collect. Not exactly prescient. For his discovery abuses and conversion of funds, the court ordered opposing counsel to pay our client $78,000. Despite his best efforts to remain judgment proof, we collected $75,000 for our client, which is above and beyond the damages we collected from the opposing party. For the complete story, go to "Oh What a Tangled Web We Weave" on our Recent Victories page.
Latham & Watkins Joins the Fray and Bites the Dust
The mighty continue to fall. With nearly 1,000 attorneys world-wide, the law firm of Latham & Watkins is quite the juggernaut. Although there were already two law firms representing the plaintiff in the action in question, including the entire UCLA Legal Department, when faced with The Morris Law Firm representing one of the defendants in the action in question, attorneys for the plaintiff apparently decided they needed that Latham & Watkins juggernaut to help oppose a motion for summary judgment and motion to compel.
In typical fashion, a total of six attorneys were sent on behalf of plaintiff to the hearing in Los Angeles Superior Court to oppose the motions, against Aaron Morris from The Morris Law Firm.
Despite their best efforts, Latham & Watkins could not turn the tide. Plaintiff's attorneys failed to defeat the motion for summary judgment, and their client was sanctioned by the court for their discovery tactics.
A good mediator will always explain to the parties the folly of drawing a line in the sand and daring the other side to cross. If you resort to posturing and overstating your position, it makes it more difficult to come off of that position, and at the very least you end up losing face when the other side proves you wrong. Unfortunately, many attorneys have never learned this simple lesson. They take a position, usually based on their interpretation of the law, and refuse to even consider the other side. The result is that they drag their client through a losing trial, or lose all credibility when they are finally forced to face reality and settle. Such was the case in a matter we recently handled.
Our client had a long term commercial lease, with a five year extension option. When he served notice that he was exercising that extension option, the landlord refused to recognize his right to do so, claiming that he had been in default of the lease at some point during the prior ten years. The real story was that the landlord wanted to sell the property, and the low rent our client was paying under the terms of the lease would impact the sales price. If the landlord could force our client out, it was believed that the space could be rented at a higher price, which in turn would raise the selling price of the property.
We sued to enforce the five year extension, and opposing counsel attacked on a second front, claiming that our client owed $18,000 in past due rent, and threatening to evict if that rent was not paid. We advised our client to pay the $18,000 under protest, so that we would not have to fight an eviction action, but we promised that we would get that money back through the already pending action.
At each subsequent settlement discussion, we would take the position that no agreement could be reached until the $18,000 was returned. Additionally, opposing counsel kept trying to insert the current fair market rental rate for the property into the discussion, but we refused to let him, claiming that the fair market rental rate was irrelevant (we believe that if you have an agreement for a certain lease amount, the landlord can't just raise the rent when that rate becomes lower than the current market rate -- a concept that was foreign to defense counsel).
Let the posturing begin. Every time we raised the issue, opposing counsel would be outraged that we would even consider that the $18,000 would be returned, and stated that if we were telling our client that there was any possibility that he would ever see that money, that we should correct that misconception immediately. Not only was that never going to happen, but he was going to successfully sue for an additional $60,000 in unpaid rent, he claimed. And as to our position that the current market rate was irrelevant, he would flail his arms, his voice would crack, and he would implore the court to see how unreasonable we were being, that whatever the lease might say, of course the current market rate is relevant.
With the trial approaching, opposing counsel caved. They agreed to return the $18,000 that had been paid under protest (what happened to "that will never happen"?) and agreed that our client could remain in the property at the rate set forth in the lease (apparently the fair market rate was irrelevant). Additionally, they had been contending that we had better settle since, even if we won, our client would have to vacate in five years, and we would be unable to sell the business without an extended lease. Thus, all the goodwill of the business would be lost. Under the settlement, defendant landlord is required to offer a 15 year lease to any prospective buyer, at a specified rate. Thus, our client ended up in a far better position than he would have been in even if we had gone to court and won.
To be fair, the settlement agreement is not all bad for the landlord. If our client sells the business, the new tenant will be paying a higher rent, and the property will fetch a higher selling price. But this was a win-win situation we would have jumped for at any time in the action. If it had been offered without all the posturing, opposing counsel would not have had to eat his words.
Another Victory for The Morris Law Firm at Court of Appeal
We tried and tried to convince opposing counsel that the case was not subject to arbitration, but he refused to listen. He took the position that the Superior Court had no jurisdiction, even though he was the one that had filed the complaint. After we obtained a substantial judgment against his client on our cross-complaint, he filed a mea culpa declaration stating that numerous problems had prevented him from representing his client properly. When we successfully opposed his motion to vacate, he appealed. The opposition argued that since the attorney was taking blame for the mistake, relief was mandatory. We argued that an attorney cannot commit to a trial strategy and then try to undo his mistake by filing a mea culpa declaration. The Court of Appeal agreed with us, and affirmed the judgment. For the complete story, go to "Oh What a Tangled Web We Weave" on our Recent Victories page.
Aaron P. Morris is a Partner with the law firm of Morris & Stone, LLP, located in Tustin, California. He can be reached at (714) 954-0700, or firstname.lastname@example.org. The practice areas of Morris & Stone include employment law (wrongful termination, sexual harassment, wage/overtime claims), business litigation (breach of contract, trade secret, partnership dissolution, unfair business practices, etc.), real estate and construction disputes, first amendment law, Internet law, discrimination claims, defamation suits, and legal malpractice.
NOTICE PURSUANT TO BUSINESS & PROFESSIONS CODE SECTION 6158.3: The outcome of any case will depend on the facts specific to that case. Nothing contained in any portion of this web site should be taken as a representation of how your particular case would be concluded, or even that a case with similar facts will have a similar result. The result of any case discussed herein was dependent on the facts of that case, and the results will differ if based on different facts.
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The Orange County Internet law firm of Morris & Stone provides Internet litigation and civil lawsuit legal services to clients in Southern California, in Orange County, Riverside County, San Diego County, and Los Angeles County; in cities including Newport Beach, Los Angeles, San Diego, Irvine, Costa Mesa, Laguna Beach, Laguna Niguel, Huntington Beach, Santa Ana, Mission Viejo, Orange, Fountain Valley, Tustin, Anaheim, and Fullerton. For practice areas not handled by Morris & Stone, be sure to visit Best Orange County Lawyers. For news on business litigation, Internet Defamation and SLAPP Law, visit Aaron Morris' blogs. See also Legal Articles, California SLAPP Law, and Wrongful Termination Copyright 2008 - 2011. Morris & Stone, LLP. All Rights Reserved.