Litigation Tip: Settlement vs. Trial

Author: David Nied

It has been almost eight years since the Journal of Empirical Legal Studies published “Let’s Not Make A Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations.” The study compared verdict outcomes with pre-trial settlement negotiations in over 2,000 cases between 2002 and 2005. The results of the study support the conclusion that it usually is better to settle a case than to go to trial. In support of this conclusion, consider the following:

  • Plaintiffs recovered less at trial than they would have recovered by settling in 61% of the cases;
  • Defendants did worse by going to trial rather than settling in 24% of cases;
  • Both sides made the right decision to go to trial in only 15% of the cases (i.e., the verdict was between plaintiff’s last settlement demand and defendant’s last offer);
  • On average, plaintiffs who made the wrong decision to go to trial recovered $43,000 less than the defendant’s last offer;
  • On average, defendants who made the wrong decision to go to trial ended up liable for $1.1 million more than they had offered;
  • Plaintiffs were more likely to make “poor” decisions to go to trial in contingency fee cases; and
  • Defendants were more likely to make “poor” decisions to go to trial where insurance coverage was generally unavailable.

So, although defendants make fewer bad decisions to go to trial, a bad decision is much more expensive on average. Interestingly, the study also found that making the wrong decision to go trial has actually increased over time based on a study of trial outcomes over 40 years through 2004. (You can read more about the study in a New York Times article. You also can purchase a copy of the article at Wiley.)

We do our best to help our clients understand the risks of proceeding to trial. That includes explaining that no two juries are the same and that not all jurors will see a case the same way a client might see it. And, especially for plaintiffs, it includes the likelihood of making the wrong decision. In most cases, it is better to make a deal.

Wendy Hillger Provides Pro Bono Eviction Defense for Needy Tenants in San Francisco

Author: Wendy Hillger
As part of Ad Astra’s pro bono pledge , Ms. Hillger volunteers for the Housing Negotiation Project. Recently, Ms. Hillger represented a tenant who was having trouble following the house rules. The landlord wanted to evict for these lease violations. The unlawful detainer trial was set for the very next Monday. At the Settlement Conference, Wendy Hillger was able to resolve the landlord’s objections and allow the tenant to stay. The tenant and his Clinical Social Worker were very grateful to avoid imminent eviction.

In Times of Divorce, You Still Need to Properly Disclose the Financials

Author: Regina Franco

By law, spouses are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other. Family Code § 721. This fiduciary duty arises on the date of marriage and does not end just because divorce proceedings have begun.

Among the issues requiring resolution through divorce is property division. In order to effectuate a division of property within the parameters of the law, parties must comply with the disclosure requirements of the Family Code. Parties are required to exchange complete and accurate declarations of disclosures listing all assets and debts in which a party has an interest regardless of whether the characterization of the asset or debt is separate or community property. When making disclosures, parties must uphold their fiduciary duties owed to each other and once disclosures are exchanged, the fiduciary duty requires that the parties update and augment their disclosures to the extent there have been any material changes so that when the parties enter into an agreement regarding property division, each has full and complete knowledge of the relevant underlying facts.  Family Code § 2100.

The Court will not enter a judgment of divorce unless the disclosure requirements have been met. Completing and exchanging declarations of disclosures are not only a technical step to getting divorced, but a very serious requirement. A violation of the disclosure requirements or a breach of the fiduciary duty could result in an award of 100% of the undisclosed asset to the complying spouse or a set aside of a judgment of divorce. There is no question that full disclosure is not only best practice, but also is mandated by law.

 

Employers Should Evaluate Their Workplace Policies and Procedures After Voters Passed Proposition 64 to Legalize Marijuana in California

Author: Sean Gentry

With the passage in California of Proposition 64 legalizing recreational use of marijuana for persons aged 21 years or older under state law (though not under federal law) and allowing for the sale of marijuana in certain circumstances, employers will want to review and potentially revisit their testing procedures and workplace policies.  Despite the new legal uses of marijuana, employers can still implement and enforce policies than ban marijuana (along with alcohol and other drugs) and intoxication from the workplace.  Employers may still take disciplinary action against employees that violate these policies, up to and including termination, even if the use of the marijuana is for medical purposes.

As for pre-employment drug screening, testing is permissible if it is administered on a fair and consistent basis for all applicants.  Employers can choose not to hire applicants that test positive, again even if the marijuana use is for medical purposes.  However, employers should not test their current employees.  Such drug screening is only permissible in select circumstances where the employer has reasonable grounds for suspicion of drug use in the workplace.  An accident is not an automatic grounds for suspicion or for such a test.  In San Francisco the criteria for such drug screening of employees is even higher.  Nonetheless, larger employers may be required to provide certain reasonable accommodations for employees seeking help for substance abuse problems and should not take adverse actions against the employee while they are seeking treatment.  If you have questions regarding this new law or workplace drug policies generally, or if you need help with designing or administering workplace policies and procedures, Ad Astra can help employers navigate these issues.

 

The Supreme Court Is Set to Clarify Employment Agreements and Arbitration Clauses on Class Action Waivers

Author: Sean Gentry

The U.S. Supreme Court has agreed to hear cases regarding class action waivers in employment agreements.  In the past, the Supreme Court has upheld such waivers of class action claims, where employers have their employees sign agreements to arbitrate those claims individually if they should arise (not as part of a class) under the Federal Arbitration Act.  However, recent cases in the U.S. Circuit Courts have weighed in on whether these waivers are enforceable in light of the National Labor Relations Act, which has created a split among the courts on whether the waivers were valid under the National Labor Relations Board’s decisions in D.R. Horton, Inc. (2012) and Murphy Oil USA, Inc. (2014).  This split includes the Ninth Circuit here in California (Morris v. Ernst & Young) and the Seventh Circuit (Epic Systems Corp. v. Lewis), which both agreed with the NLRB’s decisions to invalidate the waivers under the NLRA, against the Fifth Circuit (National Labor Relations Board v. Murphy Oil USA, Inc.), which did not.  The Supreme Court’s decision on this matter will hopefully bring some certainty for employers about how effective the use of these waivers will be going forward, and whether to use arbitration clauses in their employment agreements.

New Law Regarding Single-User Restrooms

Author: Wendy Hillger

In California, the new “Equal Restroom Access Act” requires single-user restrooms to be available to individuals of all genders. California employers who provide single-user restrooms must comply with the Act’s signage requirements no later than March 1st.  If employers have questions about how this new law may impact them, please contact us.

Triple Damages for Emotional Distress Arising from Intentional Harm to Trees

Author: Geoffrey Murry

New case law has heightened the stakes in tree-related disputes among neighbors.  In January 2017, the California Court of Appeal for the 2nd District in a case entitled Fulle v. Kanani ordered the trial court on remand to triple Encino homeowner Jeanette E. Fulle’s non-economic damages arising from intentional harm to trees on her property by Kaveh M. Kanani, a malicious neighbor. In this case, those non-economic damages arose from the homeowner’s “annoyance and discomfort” at the loss of the trees and the inconvenience arising from work at her property to remedy the damage.  The case was one of first impression in California courts, addressing for the first time whether the tree-related damage multipliers in Code of Civil Procedure section 733 and Civil Code section 3346 applied just to a party’s “out of pocket” expenses arising from the harm to trees or also to intangible damages, including emotional distress damages.  The court found that both categories of damages are subject to the multipliers.

 

Triple damages for willful injury to the trees of another have been allowed in the State of California since 1851.  Conduct that is merely negligent that results in injury to another’s trees requires the award of double damages.  At the time of enactment of Code of Civil Procedure section 733 and later, in 1872, when a similar provision was included in the state’s new Civil Code, the public policy supporting this extraordinary relief was primarily to discourage poaching from wooded lands over which one had no claim of right.  In 2017, however, the more common application of these code sections is to remedy negligent or intentional acts that have the effect of killing, weakening or disfiguring trees that occupy residential real property.

 

Despite these changed circumstances – where the plaintiff now is not necessarily an owner of substantial acreage but rather an aggrieved residential homeowner and the defendant is not a poacher but rather either a malicious or clueless neighbor or a hapless laborer – the law remains in force and is employed frequently in neighbor litigation.  The amounts at stake can be significant.  In the Fulle v. Kanani case above, the damages awarded by the jury to the homeowner were $27,500 for damage to the trees, $20,000 for the cost to repair the harm caused, and $30,000 for the homeowner’s “annoyance and discomfort, loss of enjoyment of the real property, inconvenience, and emotional distress.”  Because the neighbor cut the trees intentionally — here, to improve his view of the San Fernando Valley — all of those amounts are tripled in the award, increasing the basic award of $77,500 by $155,000.

 

There are several lessons present in this:

 

  • Always give some thought before cutting trees or even limbs and branches near property lines as mere blunders will result in double damages awarded to a successful plaintiff;
  • An intentional act that harms trees may seem like quick and easy way to resolve an annoyance but it can be very costly indeed both in terms of tripled damages and your own attorney’s fees; and
  • If trees on your property are harmed by a third party, whether accidentally or intentionally, the mandated double or allowed triple damages can make pursuing a claim more worthwhile.

 

You can read the full text of Fulle v. Kanani (2d Dist. 2017) 7 Cal.App.5th 1305, here.

 

As a seasoned real estate litigator, Geoffrey Murry of Ad Astra Law Group has the experience to handle disputes among neighbors related to trees, as well as boundaries, easements, encroachments, or nuisance activity, amid a variety of other real estate disputes, all in a competent, cost-efficient and compassionate manner. You can contact the firm at 415-795-3579 to arrange an in-person meeting or telephone consultation to discuss your matter.

Why You Want to Know an Attorney Before You Need One

Author: Annie Smiddy

Annie recently presented with a panel of attorneys on “Why You Want to Know an Attorney Before You Need One.”

From large companies to individuals, litigation is a highly emotional experience for anyone involved. Choosing an attorney at that time can be difficult.  At Ad Astra, we have experienced attorneys involved in a broad range of litigation, covering multiple practice areas. We also can help with minimizing the risk of litigation with our consultation services.

Annie and other local attorneys spoke to local entrepreneurs at the Hera Hub Business Accelerator Exposition on why it is a good idea to know an attorney before you need one. Topics included referral networks, litigation prevention, timing considerations in litigation, and the “ideal client” to keep costs down. There are many benefits to consulting with an attorney before a lawsuit is filed, so get to know us before you need us!

Additional Fees in California Real Estate Transactions to Fund Affordable Housing

Author: Wendy Hillger

To help increase funding for affordable housing, Gov. Jerry Brown recently signed a bill (Senate Bill 2: “Building Homes and Jobs Act”) that places fees on some real estate transactions in the state of California.  Effective in January 2018, a fee of $75 per single parcel of property will now apply for documents such as deeds and notices.  The fees are capped at $225 per transaction.   Recording of these documents for sales of residential and commercial property are specifically excluded [SB 2 bill text, section 2(19)].

The State Senate estimated these fees would bring the state between $200 to $300 million annually.  The additional revenue from the fees will be a permanent source of funding to pay for affordable, low-income housing, of which lawmakers estimate 1.8 million units are needed in the state.

The full bill text can be read here:

 

Cannabis Update – New Legislation Would Let Cannabis Businesses and Attorneys Breathe Easier

Author: Annie Smiddy

A new bill was recently passed into law that will provide more certainty in contracting and consulting with attorneys for the cannabis industry. While medicinal and recreational use of marijuana is still currently illegal under federal law, California authorized medicinal cannabis in 1996, and adult recreational cannabis use in 2016. The conflict in law has provided a number of obstacles for the cannabis industry. Since existing law requires that a contract “be for a lawful object,” the federal conflict in law has created uncertainty regarding the enforceability of contracts in the cannabis industry. The new law provides that commercial activity relating to medicinal cannabis or adult-use cannabis conducted in compliance with state law, and any applicable local standards and regulations, is a lawful object of a contract, is not contrary to an express policy or provision of law or to good morals, and is not against public policy. In addition, the law increases the availability of attorney-client privilege in the cannabis industry by clarifying that attorney-client privilege protections regarding “legal services rendered in compliance with state or local laws on medicinal cannabis or adult-use cannabis and [] confidential communications provided for the purpose of rendering those services” do not fall within the crime/fraud exception to attorney-client privilege. This law is beneficial because it promotes written agreements, and consultation with attorneys who are knowledgeable in cannabis regulatory issues. The law will promote good business practices within the cannabis industry, and will lead to increased compliance with California’s regulations.

See here for the text of AB 1159.