An Appeal to Reason by Donna Bader

Well, after telling lawyers that they must obtain rulings on their objections filed in motions for summary judgment, I have to report that things have changed a bit with the filing of the California Supreme Court’s opinion in Reid v. Google, 2010 WL 3034803 on August 5, 2010.  In fact, my posting of August 2, 2010 was the last time I insisted that you do everything short of standing on your head to obtain a ruling on objections so as to avoid a waiver.  For several years, we have been waiting for the Court to address this issue and now they have.

In Reid, an age discrimination and wrongful termination case, Google filed 31 pages of written objections to Reid’s evidence in opposition to Google’s motion for summary judgment.  The trial court failed to rule on the objections, stating it was relying only “on competent and admissible evidence.”  The Court of Appeal concluded the trial court’s failure to rule on the evidentiary objections did not waive those objections on appeal,  finding that the filing of written evidentiary objections before the summary judgment hearing was sufficient to preserve the objections.

The California Supreme Court held:

“We agree with the Court of Appeal’s conclusions.  Regarding the waiver issue, the Court of Appeal correctly determined that a finding of waiver does not depend on whether a trial court rules expressly on evidentiary objections and that Google’s filing of written evidentiary objections before the summary judgment hearing preserved them on appeal.  (Code Civ. Proc., § 437c, subds. (b)(5), (3).)  After a party objects to evidence, the trial court must then rule on those objections.  If the trial court fails to rule after a party has properly objected, the evidentiary objections are not deemed waived on appeal.”

(Opn., pg. 2.)

The Court further found that trial courts are required to consider all admissible evidence and the rules of waiver do not apply in summary judgment proceedings.  California Rules of Court rule 3.1352 covers how objections can be made:  either in writing pursuant to rule 3.1354, or by making arrangements to have a court reporter present at the hearing.  Rule 3.1354 also requires that a party submitting written objections must also submit a proposed order, which would allow the trial court to indicate whether it was sustaining and overruling each objection.  Thus, objections are deemed made “at the hearing” for purposes of Code of Civil Procedure section 437c, subdivisions (b)(5) and (d), thus avoiding a waiver.  As a result, even if the trial court fails to rule on those objection, they are preserved for review on appeal.

In King v. Willmett, 2010 WL 3096258, the Third District Court of Appeal put another nail in the Hanif controversy, by finding that the collateral source rule precluded the reduction of the jury’s award.  In that case, the plaintiff was rear-ended and sued the driver for damages.  After the trial and jury verdict in plaintiff’s favor, the trial court reduced the jury’s award for past medical expenses to the amount ultimately paid by the defendant’s private health insurance company to plaintiff’s health care providers.  The court stated, “In light of the public policy conclusions expressed by our state Supreme Court and the Legislature’s enactment of specific statutes governing the operation of the collateral source rule in limited kinds of cases, we conclude reduction is inappropriate in this case.”  (Id. at p. 1.)  (Hanif v. Housing Authority (1988) 200 Cal.App.3d 635.)

Interestingly enough, the plaintiff is an insurance defense attorney employed as the managing attorney for the Sacramento legal office for Farmers Insurance.  He was rear-ended by defendant Willmett, who wrote a note agreeing to take responsibility for rear-ending the plaintiff.  At the conclusion of the trial, the jury found the defendant was negligent, and awarded plaintiff damages of $169,499.94 for past medical expenses, $20,000 for past wage loss, $75,000 for past non-economic damages, zero for future medical expenses, wage loss, and other benefits, and $50,000 for future non-economic damages, for a total of $314,499.94.  The trial court granted defendant’s post-trial motion for reduction of the medical billings, reducing past medical expense to $76,286.32 (rather than $169,499.94).

The defense argued that plaintiff waived his right to challenge the post-verdict reduction because he stipulated to the procedure used by the trial court to address the reduction of damages.  The court of appeal did not agree, finding both parties filed pretrial motions in limine dealing with the issue.  The trial court also ruled it would not permit evidence of any collateral source payments, including health insurance payments, reserving the issue until after the verdict.  The parties entered into an agreement regarding authentication of the bills and that defendant would not challenge the reasonableness or necessity of each bill.  They also agreed to the amounts incurred and paid.  The court did not find a waiver.

The court in King relied on the California Supreme Court decision in Helfend v.  Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, which held that the collateral source rule rewards the individual who has invested in insurance premiums to assure medical care, rather than allowing a tortfeasor to gain the benefits of “his victim’s providence.”  (Id. at pp. 9-10)  This policy encourages citizens to purchase insurance as a form of investment.  To refuse to acknowledge this investment would put the plaintiff in a position inferior to one who did not buy any insurance because the premiums would have not benefit.

The reviewing court also examined modifications to Civil Code section 3333.1, which provides that in professional negligence actions against health care providers the defendant may elect to introduce benefits paid to a plaintiff in a personal injury action if the plaintiff may also introduce evidence of the amounts paid to obtain such insurance benefits.  Government Code section 985 prohibits the introduction of evidence of collateral source payments at trial, but after a verdict has been reached, the defendant can request a post-trial hearing for a reduction of the judgment against the public entity for collateral source payments “paid or obligated to be paid.”  This section also gives the trial court discretion to make a final determination of the reduction.  These exceptions suggest that the trial court should under normal circumstances not reduce the jury’s award of damages to reflect  collateral source payments.

The court noted that after Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4th 298 was decided, the defense bar took the position that special damages in tort cases were limited to the cash payments made by private health insurers.  Of course, the plaintiff’s bar disagreed with this interpretation and has been fighting this battle for years.  In Nishihama, the court held that the plaintiff was not entitled to the full damages for medical care where she participated in a health  plan that had a contract with a medical center to accept a reduced rate of payment under an employer-sponsored health plan and had filed a lien for the lesser amount.

The court concluded, “Patients who receive medical services incur liability for the cost of such services . . . In the absence of other applicable contractual agreements, statutory provisions or charity, they will be billed for the services.”  Thus, those amounts are actually incurred.  (Id. at p. 11.)  The court found the the Supreme Court concluded public policy interests favor the collateral source rule.   It went on to state, “The Legislature has seen fit to alter the collateral source rule in two limited situations, neither of which is applicable here.  We decline to carve out any further limitations of the rule, particularly as acceptance of the reduction imposed by the trial court here would produce a result inconsistent with the apparent rationale behind section 985.”  (Id. at p. 12.)

For those of you who might think I haven’t been writing for the last week, you might have missed my blogs on the National Law Review (http://www.natlawreview.com/) where I was guest blogger for the week of August 9-15, 2010.  I wrote on a number of topics, including:

1.   The legal implications of California’s Proposition 19: http://www.natlawreview.com/article/what-are-possible-legal-implications-passage-california-s-proposition-19

2.  Proposition 8: This article is a little dated because the Ninth Circuit granted a stay of the right to marry.  See http://www.natlawreview.com/article/california-s-proposition-8-declared-unconstitutional

3.  Is California the pot capital of the country: http://www.natlawreview.com/article/california-pot-capital-country

4.  Transparency in Communications: Dealing with National Security Letters.  See http://www.natlawreview.com/article/transparency-communications

5.  Medical marijuana cases offer full-time employment for lawyers: http://www.natlawreview.com/article/medical-marijuana-litigation-offers-full-time-employment-lawyers

6.  Returning your clients’ phone calls: http://www.natlawreview.com/article/if-i-could-tell-you-one-thing-it-would-be-you-should-always-return-your-clients-phone-calls

Now that I am done with that gig, it’s time to return to California.  Several new and important cases have come out and I want to report on those in the next few blogs.

Proposition 8, which banned gay marriages in California, was struck down today as unconstitutional by U.S. District Judge Vaughn R. Walker.  Judge Walker ruled that gays and lesbians have a constitutional right to marry.  He also held that “Plaintiffs have demonstrated by overwhelming evidence that Proposition 8 violates their due process and equal protection rights and that they will continue to suffer these constitutional violations until state officials cease enforcement of Proposition 8.”  (Opn., pg. 136.)  The court ordered the entry of judgment permanently enjoining enforcement of Proposition 8.

Judge Walker concluded as follows:

“Proposition 8 fails to advance any rational basis in singling out gay men and lesbians for denial of a marriage license. Indeed, the evidence shows Proposition 8 does nothing more than enshrine in the California Constitution the notion that opposite sex couples are superior to same-sex couples. Because California has no interest in discriminating against gay men and lesbians, and because Proposition 8 prevents California from fulfilling its constitutional obligation to provide marriages on an equal basis, the court concludes that Proposition 8 is unconstitutional.”

(Opn., pg. 135.)

The lawyers who represent the proponents of Proposition 8 have already filed a motion to stay Judge Walker’s ruling pending an appeal to the 9th Circuit Court of Appeals.  This appeal is the beginning of the road to the United States Supreme Court.  But for now . . . it’s time to celebrate!

One of the biggest problems I encounter in dealing with summary judgment motions is the trial attorney’s failure to obtain rulings on his or her objections.  As we have discussed, if you make objections but fail to get a ruling on them, you might as well not have made the objections in the first place as your objections will be deemed waived on appeal.  (City of Long Beach v. Farmers & Merchants Bank of Long Beach (2000) 81 Cal. App.4th 780, 783.)  As a result, the court will deem the evidence as having been admitted as part of the record on appeal.  (Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 670, fn. 1; Code of Civil Procedure section 437c(b) and (c).)

It is simply not enough for the judge to state he or she will only consider relevant evidence.  Of course, California Rules of Court, rule 3.1354(b) and (c) makes it easy for the judge to simply check off a ruling, but I would still recommend keeping your objections to a minimum and make sure they really make a difference to your case.

In ruling on the motion for summary judgment, the court must “consider all of the evidence,” except that evidence to which objections have been made and sustained, as well as inferences reasonably drawn from that evidence.  (Code of Civil Procedure section 437c(c).)  The court must also view all evidence and inferences “in the light most favorable to the opposing party.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)

The court also has a duty to rule on evidentiary objections, but no one wants to be the attorney arguing that the judge is shirking his or her judicial duties by failing to rule.  “Trial courts have a duty to rule on evidentiary objections.  Part of the judicial function in assessing the merits of a summary judgment or adjudication motion involves a determination as to what evidence is admissible and that which is not.”  (City of Long Beach v. Farmers & Merchants Bank of Long Beach (2000) 81 Cal.App.4th 780, 784.  “A trial court cannot decide whether a motion should be denied or granted until it has first determined what admissible evidence is in play on the motion.” (Vineyard Springs Estates, LLC v. Superior Court (2004) 120 Cal.App.4th 633, 642.)

When I first started practicing law, a trial judge might avoid ruling on specific objections and tell you that the court will only consider admissible evidence and will disregard inadmissible evidence.  Sounds smart, I suppose, but it really doesn’t give the court of appeal a sufficient record to review.   This rule was examined in Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, which rejected the requirement of  express rulings, especially since the court of appeal reviews the matter de novo.  The court in Biljac stated, “[B]eing able to identify particular flaws in the lower court’s reasoning has no value because, as appellants themselves note, summary judgment must be upheld if correct on any ground regardless of wrong ‘reasons’ which may have guided the court . . . More generally, it is presumed on appeal that a judgment has not relied on irrelevant or incompetent evidence.”  (Id. at pp. 1419-1420.)

This rule in Biljac has been overruled, superseded and disagreed with so many times that you might has well ignore the holding.  Other reviewing courts treat the lower court’s failure to rule on objections as an implied overruling, much the same as if you failed obtain a ruling, so that the evidence becomes part of the record. Even though there are numerous decisions criticizing Biljac, viewing the failure to rule on objections as an abdication of judicial tasks, the California Supreme Court decided to tackle the issue in Reid v. Google, Inc. Case No. S158965 (review granted January 30, 2008).  The Court issued a statement of issues as follows:  “Are evidentiary objections not expressly ruled on at the time of decision on a summary judgment motion preserved for appeal?”  The matter was argued and submitted on May 26, 2010 and a decision should be forthcoming in the very near future.  At the heart of this issue is whether evidentiary objections are waived or the trial court is considered to have refused to rule, preserving the objections for appeal.

When you appear for oral argument, the presiding justice will probably open the session with a greeting, quickly followed by an admonition that the Court is thoroughly familiar with the facts and issues, so please don’t repeat what is already in your briefs.  No matter how many times this warning is given, some attorney will inevitably start of his or her presentation with something like, “This case arose out of . . . . “  The Court may let you go on a bit, but usually, you will be stopped and politely informed that the Court knows the facts.  But then you are in the middle of oral argument and one of the justices asks a question that you might conclude indicates the justice doesn’t really know your case at all.

The truth is that probably no one knows your case as well as you do.  But the courts have surprised me, finding some small detail that I missed or didn’t consider to be that important.  And, of course, there are levels of familiarity.  For example, if you made a statement in your brief that Mr. Jones knew about the banana peel on the floor and you cite to the record, which is one page out of a 500-page transcript, does the court look just at that one page or do the members of the bench look a few pages before and after to follow the thread of testimony?  I asked one justice this question and he replied that he only looked at the page cited, nothing more, nothing less, feeling it was up to the opposing attorney to point out the importance of the other pages or noting that the testimony is taken out of context.  Other members of the bench might look beyond but they would not be obligated to do so.  The conclusion you might draw from this is that the Court may be familiar with the record, but that doesn’t mean the justices have read all 500 pages; it means they are at least familiar with the pages cited.

Now suppose you are in the midst of oral argument and one of the justices asks whether Mr. Jones had notice of the banana peel.  One thought that might run through your mind is to question whether that justice knows anything about your case because you plainly made that statement on page 5 of your brief.  Pointing out that the page reference can be found on page 5 makes it look like the justice isn’t familiar with the case at all.  Perhaps the better way to address this is to talk about the testimony regarding notice, rather than your statement on facts.  If the justice asks that question, it may be for an entirely different reason.  He or she may already know Mr. Jones had notice, but the justice wants the other justices to know it.  And since we can assume that most justices don’t ask questions for their own amusement, that means that the issue of notice is important so don’t simply reply with a yes or no.  Discuss the fact of notice and its legal implications.  The justice may then ask where in your brief you discussed notice, and that would be the time to say the discussion could be found starting on page 5.

In Parker v. Wolters Luewer United States, Inc. (2007) 149 Cal.App.4th 285, the court explained that the rules require an original and four copies of the appellate brief.  “The original brief stays with the record on appeal.  Each of the three justices on the panel deciding the case receive copies of the briefs which they can use at their desks, work on at home, or take with them when traveling for an engagement outside the court.”   (Id. at pp. 290-291)  The court noted that there is only one copy of the trial court record and “If all three justices had to share this single record in order to review, research and evaluate a party’s arguments the time it would take for the court to decide the appeal would considerably increase.”  (Id.)  But that is essentially what the courts have to do.  That means that a justice might grab your brief to take home to read, but he or she wouldn’t necessarily have the record.  I don’t think it is a leap of logic to conclude that one justice might be more familiar with the record, especially if that justice is assigned the task of writing the majority opinion.

Submitting an e-brief would help because each justice could easily transport and have access to the record, but that also means having a computer at hand.  And, as we know, e-briefs haven’t taken off in a big way.  The justices I know love e-briefs and would love to see even more of that, but for smaller appeals, the expense is just too high.  (If it’s a question between paying me or paying for an e-brief, I vote for paying the attorney.)   You also have the option of including 10 pages from the record in the appendix; more can be added upon application showing good cause to the presiding justice.  Don’t overlook that opportunity because then each justice will have his or her personal copy of an important contract or even significant testimony.  (See CRC 8.204(d).)   I also recommend finding a new and different way to talk about an issue so that no justice can suggest that you are simply repeating what is in your briefs.  But I am always prepared to talk about the facts in the record in case I am asked about whether Mr. Jones had notice of that banana peel.

Although Code of Civil Procedure section 437c allows for either written or oral objections, without question, I would recommend preparing written objections rather than relying on making them at the hearing.  “Part of the judicial function in assessing the merits of a summary judgment or adjudication motion involves a determination as to what evidence is admissible and that which is not.”  (City of Long Beach v. Farmers & Merchants Bank of Long Beach (2000) 81 Cal.App.4th 780, 784.)  If the judge is going to review the paperwork well in advance of the hearing, wouldn’t you prefer giving the judge your objections at that time, rather than waiting until the last minute?  Code of Civil Procedure section 437c(b)(5) provides “Evidentiary objections not made at the hearing shall be deemed waived.”  Code of Civil Procedure section 437c(d) requires that objections based on the failure to comply with the requirement that the affidavits or declarations shall be made on personal knowledge “shall be made at the hearing or shall be deemed waived.”

California Rules of Court, Rule 3.1352 provides:

“Any party desiring to make objections to evidence in the papers on a motion for summary judgment must either:

(1)              Submit objections in writing under rule 3.1354; or

(2)             Make arrangements for a court reporter to be present at the hearing.”

While the presence of the court reporter and reporting of the hearing ensures that a record is made of the objection, it still does not give the court advance warning to consider the objections when it is reviewing the motion papers.   If you decide to file written objections with your papers, they must be served or filed at the same time that your opposition or reply are served and filed “[u]nless otherwise excused by the court on a showing of good cause, . . .”  (California Rules of Court, rule 3.1354.

The format for written objections can be found in California Rules of Court, rule 3.1354.  You should stick to that format without deviation.  Just the other day, I was consulted by an attorney who showed me a tentative ruling by a judge who refused to consider  written objections because they were not in proper format.  One moving party won its motion for summary judgment because the judge sustained objections to the expert’s declaration, while the other moving party lost the motion because the objections were not in proper format, and as a consequence, were not considered by the judge.  You don’t always know whether you have a judge who is a stickler for the rules or one who looks beyond minor procedural errors.  Don’t take that chance and you will be safe from procedural attacks!

Even though you have the right to make objections, I would recommend that you be judicious in the amount of objections you make.  Determine whether it is really important to the issues in the case.  Before the new rules required attorneys to submit a proposed order that allowed the judge to check of “overruled” or “sustained,” a voluminous amount of objections always made it difficult for the judge to rule.  Now that task is much easier but if you really want to make life easy for the judge, stick to objections that have merit and will ultimately affect the motion.

Whether you are the moving or opposing party, you want to make the trial court’s task in reviewing the motion for summary judgment as easy as possible.  That means having a clear and concise Introduction, topic headings that are fairly descriptive of the argument, and a presentation that is easy on the eyes.  To me, that includes shorter sentences with active verbs, and shorter paragraphs.  Variety is the spice of life, and I think this rule applies to sentence structure.  I also make sure that I throw in a few indented quotes to mix up the structure so the judge isn’t facing the monotony of page after page with no change in format.

I try to make it easy for the trial court, and the court of appeal, to give me what I want.   Judges are often overworked and saddled with large caseloads. Your case is not the only case on the calendar.  Don’t expect them to remember your case as you do or recall your last hearing.  You are lucky if they do, and if they don’t, they may not want to admit it.  That means making your motion or opposition as comprehensive as possible.  That also means presenting it in a way that doesn’t require the court to hunt for documents or evidence.  This suggestion could apply to something as simple as tabbing and indexing your evidence.  Tabs make everyone’s life easy.  It also means not referring to evidence in your memorandum of points and authorities, and then avoiding it when preparing the Separate Statement.

And finally, keep your page count to a respectable level.  You can do that by trying to stay focused and not bring up matters that will only complicate the motion.  Complications work against a moving party as the trial court may suspect there is a triable issue lurking somewhere; it just hasn’t found out where it is.

The Court of Appeal, First Appellate District, Division One, certified a new opinion for publication in Yanez v. Soma Environmental Engineering, Inc., Case No. A123893, that adds more fuel to the fire over Hanif v. Housing Authority (1988) 200 Cal.App.3d 635. Many plaintiffs’ attorneys were delighted with the opinion in Howell v. Hamilton Meats (2009) 179 Cal.App.4th 686, review granted March 10, 2010, No. S179115, citing it to defense counsel and insurance adjusters, only to discover review had been granted by the California Supreme Court. Of course, plaintiffs’ attorneys can continue to argue the reasoning,

In Yanez, the plaintiff sued for injuries she suffered in an auto accident.  She was awarded $150,000 in damages, including $44,519 for past medical expenses after a jury trial.  SOMA moved to reduce the award to $18,368 for the amount actually accepted by her medical providers as payment in full under contracts with Aetna and Healthnet, plaintiff’s private insurers.  The trial court reduced the judgment and Yanez appealed.  The Court of Appeal reversed the amended judgment and remanded it back to the trial court to restore the original amount of damages and redetermine Yanez’s entitlement to costs and prejudgment interest under CCP 998.

At trial, Yanez was able to present evidence of the amounts billed by her health care providers without regard to the amounts actually paid or still considered owing by the provider.  The trial court ruled it would later conduct a post-trial hearing to determine if the amount should be reduced.  In a motion to tax costs, SOMA claimed plaintiff should not have the benefit of CCP 998 because if the medical expense award were reduced, the judgment would be less than Yanez’s 998 offer.

The appellate court’s opinion, written by Justice Margulies, examines decisions on this issue from around the country and concluded that the trial court erred in reducing the medical specials to the amounts actually paid by insurers.  It found “Haniff used overly broad language and the extension of its holding to private insurance by Nishihama and other cases is inconsistent with the collateral source rule.”  (Opn., pg. 14.)  It also noted that whether the full bills reflected the reasonable value of the services provided by health care providers was a separate issue for the jury, and not the trial court, to decide.  The court also stated, “In particular, Hanif did not address or appear to contemplate situations in which patients covered by private health insurance are charged reduced rates by the provider for their care as an insurance benefit negotiated between the insurer and the health care provider.”  (Opn., 15.)

Justice Banke filed a 39-page concurring opinion, noting the confusion in the law on the measure of damages for past medical expenses and “[w]ith the exception of damages for gratuitously provided medical services, our Supreme Court has never affirmatively endorsed a measure of damages for past medical expenses nearly certain to result in an economic windfall to the plaintiff – that is, an award that exceeds the dollar amount actually paid or owed (and thus required to be paid in the future) to a provider.”  (Concurring Opn., pg. 1.)  Justice Banke noted that the Supreme Court will address Hanif’s application outside the Medicaid context, but concluded, “The threshold issue that needs clarification, however, is the measure of damages for past medical expenses.”  (Concurring Opn., pg. 32.)  Justice Banke analyzed the measure of such damages, concluding that juries should heard all relevant evidence on the issue of “reasonable value” of medical services.  (Concurring Opn., pg. 39.)

This may not be the last word on this case.  The Opinion was filed on June 24, 2010 and it will be 30 days before it becomes final.  It may be subject to a petition for rehearing, or during the 10-day period after it becomes final, a petition to the California Supreme Court.  The petition could be granted so that the Court could reach a comprehensive opinion that covers the issues raised in Howell and Yanez v. Soma Environmental Engineering, Inc. The Opinion is well worth reading, especially since it covers the history of this area and calculating medical expenses, but it also analyzes the approaches taken by both Justices Moore and Fybel of our Court of Appeal in Olsen v. Reid (2008) 164 Cal.App.4th 200.