Tuesday, May 26, 2009
C.A.: Stipulation Cannot Substitute for Summary Judgment Motion
Divided Panel Rejects Effort to Short-Circuit Procedures in Order to Expedite Appeal
By SHERRI M. OKAMOTO, Staff Writer
Litigants may not agree to a stipulated judgment to create appellate review and avoid the cost of a summary judgment, this district’s Court of Appeal has ruled.
A Div. 5 panel, split 2-1, held that a stipulated judgment dismissing the individual and class allegations against a commercial real estate company did not comply with the mandatory requirements for a summary judgment. The court Thursday reversed Los Angeles Superior Court Judge Carl J. West’s judgment entered pursuant to a stipulation by the Century City law firm of Magaña Cathcart McCarthy and CB Richard Ellis Inc.
Magaña Cathcart filed a complaint against CBRE alleging a class claim that CBRE had sent hundreds of thousands of unsolicited faxes to various individuals and entities, including the law firm, in violation of the Telephone Consumer Protection Act.
The action was designated complex, and with the assistance of the complex litigation court, the parties stipulated that the determination of certain threshold issues would be helpful to manage the litigation.
In the stipulation, the parties consented to consideration of these issues prior to class certification. They specifically agreed that determination of the issues was “not meant as a substitute for any future summary adjudication motions as to specific facts” and that an “appropriate” motion would be made if either party wished to use the trial court’s ruling on the threshold issues.
Prior to resolving the threshold issues in favor of CBRE, West told both parties that his judgment was “not in lieu of a motion for summary judgment or in lieu of summary adjudication of issues.”
After the appellate court summarily denied Magaña Cathcart’s request for writ relief, the parties and the trial court discussed resolution of the action. West reminded the litigants of their stipulation that the rulings on the threshold issues were not substitutes for a motion for summary judgment and suggested that the issues be tendered as a demurrer or motion for judgment on the pleadings, which the trial court would grant.
Instead, the parties entered into a stipulation for judgment providing that if CBRE were to bring a motion for summary judgment on Magaña Cathcart’s individual claim, the trial court would grant summary judgment in its favor.
Magaña Cathcart also voluntarily dismissed without prejudice all claims on behalf of the putative class and the trial court entered judgment in accordance with the stipulation.
On appeal, both parties acknowledged that the stipulated judgment did not comply with the procedural requirements for summary judgment.
Writing for the appellate court, Justice Sandy R. Kriegler reasoned that a motion for summary judgment and separate statements of undisputed facts are made mandatory by statute and court rules.
Because summary judgment is a “drastic remedy,” he explained “it is important that all of the procedural requirements for the granting of such a motion be satisfied before the trial court grants the remedy.”
He clarifies that litigants may stipulate to a judgment in order to secure appellate review, but emphasized that there must be a properly filed motion for such review to take place.
“We simply cannot review the merits of a motion that was never made and which is in direct contravention of the mandated rules of procedure,” he wrote, and regardless, he said that the record failed to provide the appellate court with the expeditious means of ruling on a summary judgment motion.
Joined by Presiding Justice Paul Turner, Kriegler also rejected the parties’ request that the appellate court reach the merits of the judgment because requiring them to comply with the summary judgment procedure would have been time consuming, expensive, and wasteful of judicial resources.
“It is not the place of the parties, even if assigned to the complex litigation court, to rewrite the Code of Civil Procedure for their own convenience and economic interests,” he wrote. “Complex litigation cases do not move to the front of the line in the appellate courts by circumventing the law of summary judgment by stipulation.”
Noting also the express agreement between the trial court and the parties that any ruling on the threshold issues would not be used for purposes of summary judgment or summary adjudication, Kriegler concluded there was no reason why the litigants should not be held to their own agreement.
Dissenting Justice Richard M. Mosk argued that the policies favoring judicial efficacy and conservation of judicial resources “outweigh any interest that might be served by a reversal on procedural grounds for the sole purpose of requiring the parties to adhere to formal motion procedures.”
As the parties agreed to the procedure utilized by the trial court to enter judgment, he maintained that neither party was aggrieved or in any way prejudiced.
Returning the matter to the trial court so that the parties could file papers seeking a judgment to which they had already stipulated was an “elevation of form over substance” and a “vivid example of an inflexible, cumbersome judicial system that increasing numbers of commercial litigants are avoiding by choosing alterative means of dispute resolution,” he claimed.
Mosk urged that the appellate court review the merits of the case, which he opined were thoroughly briefed and could be determined as a matter of law. Reaching those issues himself, he said he would have affirmed the trial court’s judgment.
Scott Z. Zimmermann of Zimmermann, Koomer, Connolly, Finkel & Gosselin represented Magaña Cathcart McCarthy.
Michael A. Sherman, Scott Vick, and Robert W. Peyton of Bingham McCutchen represented CB Richard Ellis along with in-house counsel John T. Thornton.
The case is Magaña Cathcart McCarthy v. CB Richard Ellis, Inc., 09 S.O.S. 2843.
Copyright 2009, Metropolitan News Company