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California Law Update – March 2025

By March 31, 2025August 23rd, 2025Law Updates
    1. (Use of Privileged Communication) Trial court did not abuse its discretion in disqualifying attorney who received a privileged communication from opposing counsel, refused to destroy it, and shared it with experts. Christian L. Johnson v. Department of Transportation (No. C099319 Super. Ct. No. STK-CV-UCR-2019-281 California Court of Appeal Third Appellate District Filed March 17, 2025)
    2. (Default Judgment Set Aside) Client was entitled to mandatory relief from default judgment under Code of Civil Procedure Section 473(b) because the default was caused by his counsel’s calculated delay-not his own. Eileen Talbott v. Kamaran Ghadimi (No. B329889 Los Angeles County Super. Ct. No. 20LBCV00201 California Court of Appeal Second Appellate District Division Seven Filed March 18, 2025)
    3. (Statutory Offer to Compromise) While CCP 998 sets out a default rule for cost-shifting, parties remain free to agree to their own allocation of costs and fees as part of a settlement agreement. Oscar J. Madrigal v. Hyundai Motor America (No. S280598 Third Appellate District C090463 Placer County Superior Court S-CV-0038395 Filed March 20, 2025)
    4. (Burden of Proof Shifting) Burden of proof may be shifted to defendant doctor when the CT scan he delayed in ordering was crucial to establishing medical negligence causation. Kimberly Montoya v. The Superior Court of Orange County (No. G064459 Super. Ct. No. 30-2022-1239435 California Court of Appeal Fourth Appellate District Division Three Filed March 21, 2025)

The above court decisions came to our attention during this last month. Please find below a summary of the court opinions for your consideration.

    1. (Use of Privileged Communication) Trial court did not abuse its discretion in disqualifying attorney who received a privileged communication from opposing counsel, refused to destroy it, and shared it with experts. Christian L. Johnson v. Department of Transportation (No. C099319 Super. Ct. No. STK-CV-UCR-2019-281 California Court of Appeal Third Appellate District Filed March 17, 2025)

Plaintiff sued defendant arising out of an employment claim. During the litigation, the defendant attorney sent an email about the litigation to the supervisor for the plaintiff employee. The email was marked with a confidentiality notice, as well as a disclaimer that contained privileged material and attorney work product. For unknown reasons, the supervisor sent an image of the email to the employee plaintiff who shared it with his attorney. The attorney then shared the email with several retained experts and others. The defendant sought a protective order on the grounds that the email was covered by the attorney-client privilege. The trial court entered the protective order. Subsequently, the parties disputed that the plaintiff complied with the protective order’s terms. Eventually, the defendant filed a motion to enforce the order and a motion to disqualify the employee’s attorney and three retained experts, which the trial court granted. The plaintiff appealed against the disqualification order, arguing, that the email was not protected by the attorney-client privilege and the court abused its discretion in ordering disqualification.

The appeals court affirmed. The appeals court noted that attorney communications with agents and employees that represented entities may be covered by the attorney-client privilege. It then found that substantial evidence supported the trial court’s conclusion that the email was privileged based on the fact that the attorney who sent the email represented the defendant, the email involved legal advice or information, and the nature of the relationship between the attorney and the supervisor was that of the defense attorney obtaining information relevant to litigation from a defendant employee. Because the communications were privileged and the trial court did not abuse its discretion in ordering disqualification, the order was affirmed.

    1. (Default Judgment Set Aside) Client was entitled to mandatory relief from default judgment under Code of Civil Procedure Section 473(b) because the default was caused by his counsel’s calculated delay-not his own. Eileen Talbott v. Kamaran Ghadimi (No. B329889 Los Angeles County Super. Ct. No. 20LBCV00201 California Court of Appeal Second Appellate District Division Seven Filed March 18, 2025)

Defendant backed out of an oral agreement to settle a collection action against his former patient. The patient filed a cross-complaint for breach of contract to enforce the oral settlement agreement. The defendant missed the deadline to respond to the cross-complaint, and the trial court entered his default. The defendant filed a motion to set aside the default under the mandatory relief provision of Code of Civil Procedures, section 473, subdivision (b). The trial court denied the motion, finding the default was caused by calculated litigation strategy, not by neglect or mistake by the defendant’s attorneys.

The appeals court reversed finding that the defendant was entitled to relief under the mandatory provision of section 473 (b). It found that a defendant may be entitled to relief under this provision even where an attorney makes a bad strategic decision, rather than where the court held such relief may not be available in that situation. The court noted that relief would serve the purposes of a statute because it was designed to discharge the innocent client of the consequences of the attorney’s fault; to place the burden on counsel; and to discourage additional litigation in the form of malpractice actions by the defaulted client.

    1. (Statutory Offer to Compromise) While CCP 998 sets out a default rule for cost-shifting, parties remain free to agree to their own allocation of costs and fees as part of a settlement agreement. Oscar J. Madrigal v. Hyundai Motor America (No. S280598 Third Appellate District C090463 Placer County Superior Court S-CV-0038395 Filed March 20, 2025)

Plaintiff sued defendant car manufacturing company under the Song-Beverly Consumer Warranty Act, alleging that the car it purchased did not operate as warranted. The defendant made a Code of Civil Procedure section 998 offer, which plaintiff let expire. The defendant later made a second section 998 offer, offering to pay the purchase price of the car plus expenses, or a fixed amount. Again, the offer expired. On the first day of trial, the plaintiffs agreed to a settlement whereby the defendant would pay a certain sum, and the plaintiff could seek their costs and fees by motion. The court affirmed the terms, and there was no mention of section 998. When plaintiffs moved to recover their costs, the defendant argued they could not recover costs incurred after the date of the second offer, as they ultimately settled for a less favorable payment. The court disagreed, concluding that section 998 did not apply. The Court of Appeal reversed in a split decision. The California Supreme Court was then decided the question as to whether the plaintiff who does not accept a 998 offer, but later agrees to settle before trial, necessarily avoids the post-offer cost-shifting effects of section 998.

The California Supreme Court affirmed. It noted that a plaintiff who does not accept a 998 offer but later fails to obtain a more favorable judgment or award cannot recover post-offer costs. Here, the California Supreme Court noted that the lower court correctly rejected the trial court’s construction, i.e., that cases that settle before trial, but after a section 998 offer is rejected or deemed withdrawn, do not fall within the cost-shifting scheme. That interpretation flouts the statute’s language and purpose of encouraging settlement. Section 998(a) does not require that the case be resolved by trial before it comes into play. Nor does it exclude from its reach cases resolved by a post-rejection, but pretrial, via a settlement. The parties remained free to agree to their own allocation of costs and fees a part of a settlement agreement.

    1. (Burden of Proof Shifting) Burden of proof may be shifted to defendant doctor when the CT scan he delayed in ordering was crucial to establishing medical negligence causation. Kimberly Montoya v. The Superior Court of Orange County (No. G064459 Super. Ct. No. 30-2022-1239435 California Court of Appeal Fourth Appellate District Division Three Filed March 21, 2025)

This petition for writ of mandate involved a claim of medical malpractice by the plaintiff against the defendant physician. The plaintiff claimed that the physician committed malpractice when he was treating the plaintiff patient in a hospital, observed signs of potential stroke, which she was in fact experiencing, but he failed to call a “code stroke.” As a result, a CT scan was not taken of her brain until several hours later, and she is presently severely disabled because of her stroke. The plaintiff claimed her damages would have been significantly less severe had a code stroke been called immediately, which would have resulted in a CT scan that revealed the ongoing stroke, and which would have led doctors to perform a thrombectomy to mitigate the damage.

The question before the court was a request for a burden-shifting jury instruction. The plaintiff contended that she could prove her damages with specificity because, in the absence of a timely CT scan, it is impossible to determine how much damage was done before a surgery would have been performed, which would not be caused by the defendant physician’s alleged negligence, as opposed to after, which would. At trial, the plaintiff requested a jury instruction shifting the burden to proof to the defendant physician to prove that his alleged negligence did not cause her damages. The trial court denied the instruction. Upon the filing of the plaintiff’s writ petition, the court issued a stay of the impending trial.

The appeals court issued a writ of mandate instruction to the court to vacate its ruling denying the requested jury instruction. If determined that if the plaintiff can present evidence (1) that the doctor was negligent in failing to order a CT scan, (2) there is a reasonable possibility that a CT scan followed by a surgery would have mitigated her damages, (3) that a CT scan was critical to establish causation, then public policy required the burden shifting to defendant physician to show that his negligence did not cause for damages. Where the absence of critical evidence of causation is a direct result of a tortfeasor’s negligence, the tortfeasor should not be permitted to benefit from that negligence.

Should you have any questions concerning these court decisions or desire a copy of any of them, please do not hesitate to contact our office.