Wednesday, March 4, 2009
C.A. Revives Malpractice Suit Against Woodland Hills Firm
By SHERRI M. OKAMOTO, Staff Writer
This district’s Court of Appeal yesterday revived a former client’s malpractice suit against the Woodland Hills-based civil litigation firm of Hanger, Levine & Steinberg.
Div. One reversed Los Angeles Superior Court Judge James R. Dunn’s grant of summary judgment in favor of the firm in an unpublished decision, ruling that a trier of fact should have been allowed to determine whether Ronald Marinaro’s opposition to the motion invalidly contradicted his prior sworn deposition testimony.
William Richert filed suit against Marinaro, alleging that they had formed a partnership to establish a business that would involve roasting soy beans to create a product which tasted like coffee, but Marinaro later breached his contractual and fiduciary obligations by starting a separate, competing business of his own.
Marinaro tendered the defense of the case to his insurer, which engaged Hanger Levine to represent Marinaro.
During the course of its representation, Hanger Levine wrote several reports to the insurer advising that Richert was likely to prevail in his claims and predicting a large award of damages.
However Marinaro claimed that Hanger Levine partner Robert Levine told him that he expected to win, and had “never lost a case.”
Pretrial settlement discussions were unsuccessful, which Marinaro said was the result of his confidence in his attorneys’ predictions of a favorable outcome at trial.
A jury subsequently rendered a verdict awarding Richert more than $14.5 million in compensatory and punitive damages against Marinaro.
The appellate court affirmed awards of $526,000 for economic damages and $60,000 for non-economic damages, but vacated the compensatory and punitive damage awards and remanded the matter to the trial court.
While that action was pending, and after Marinaro had filed his malpractice claim, Marinaro settled Richert’s action for $330,000 plus the assignment of 30 percent of any gross recovery in the malpractice lawsuit.
Marinaro’s malpractice claim was premised on his contention that his lawyers had failed to discharge their professional obligations to advise him about the merits of Richert’s claims, which kept him from negotiating a settlement for less than the amount which that case ultimately cost him.
His opposition to the summary judgment motion relied almost exclusively upon declarations by him and Richert and Marinaro that a less expensive settlement would have been achieved if Marinaro had been advised that he was likely to lose the underlying case.
Dunn dismissed Marinaro’s opposing evidence as “self-serving statements based on hindsight which contradict prior sworn testimony in depositions,” and granted Hanger Levine’s motion for summary judgment.
Writing for the appellate court, Orange Superior Court Judge Ronald Bauer, sitting on assignment, explained that a party cannot withstand a motion for summary judgment by creating a triable issue of fact by a declaration which contradicts his prior discovery responses.
Bauer noted that Richert’s declaration stated that he would have accepted an offer of $200,000, and there was no contrary testimony by Richert in the record.
Although Hanger Levine submitted excerpts of a prior deposition in which Richert stated he wanted Marinaro to offer $200,000 and an interest in Marinaro’s company, in that same deposition Richert also said “I never said [I]would have taken $200,000,” and denied that getting some percentage ownership was a non-negotiable point.
Citing Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, which held that summary judgment should not be based on tacit admissions or fragmentary and equivocal concessions, Bauer reasoned the firm’s evidence was of “limited value.”
In Marinaro’s declaration, he stated that he would have offered “at least $250,000” if he had been aware of the bleak prognosis for his defense, but his earlier deposition testimony was that he “might have come up with a hundred or a 150” but he did not have in mind a maximum that he would be willing to contribute during the settlement negotiations.
Bauer explained that congruity in Marinaro’s answers was not important because Marinaro’s deposition statements were based on his “ignorant, uninformed, and optimistic state of mind” and his declaration addressed what he would have done to avoid an adverse judgment.
Although Marinaro’s declaration was “hindsight,” Bauer suggested, “the alterative is to ask him to testify about a state of mind that no lawyer should want or expect a client to have,” which would be what he was thinking while believing his attorneys were lying to him.
Lawyers cannot expect their clients to think in terms of a maximum offer before trial based on assurances that the client will prevail, and also an offer in the event the attorney were lying and the client were facing imminent disaster, Bauer said.
As directly conflicting testimony given by the same witness before trial and during trial is normally weighed by the trier of fact, Bauer concluded that the grant of summary judgment improvidently deprived Marinaro the opportunity to do so.
Presiding Justice Robert M. Mallano and Justice Frances Rothschild joined Bauer in his opinion.
Brian M. Grossman of Tesser & Ruttenberg represented Marinaro on appeal, while Filomena E. Meyer of Hinshaw & Culbertson represented Hanger Levine.
The case is Marinaro v. Hanger, Levine & Steinberg, B205629.
Copyright 2009, Metropolitan News Company