Friday, April 27, 2017
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Lawyer Had No Standing to Contest Allegation of Error—Court of Appeal
Justice Hoffstadt Says Attorney Who Drafted Document Which an LLC Sought to Reform Was Properly Barred From Intervening to Argue That He Dutifully Followed Directions
By a MetNews Staff Writer
The Court of Appeal for this district held yesterday that a Woodland Hills lawyer was properly barred from intervening in a lawsuit to reform an instrument based on his alleged “inadvertent error” in drafting it, rejecting his contention that his reputational interest was sufficient to afford him standing.
Justice Brian Hoffstadt wrote for Div. Two in affirming Los Angeles Superior Court Judge David Sotelo’s determination that attorney Kenneth M. Stern lacked the requisite “direct and immediate interest” in the matter. The opinion was not certified for publication.
Stern had drafted an operating agreement for a limited liability corporation (“LLC”), naming Richard Rabis and his wife, Judith Ridder, as its members. Subsequently, the LLC sued Judith Rabis, seeking an order reforming the agreement to reflect the husband’s sole membership, alleging that Stern “inadvertently committed an error” in including her.
She stipulated that judgment be entered for the LLC, and it was. A month later, Stern, insisting that he followed instructions in drafting the instrument, and that the lawsuit was a “frivolous sham,” sought to intervene.
Sotelo denied that motion, and denied a subsequent motion to set aside the judgment.
Denial Was Proper
Denial of the motion to intervene was appropriate, Hoffstadt said, explaining:
“Admittedly, a person has a legally cognizable interest in his or her reputation, and the tort of defamation is designed to protect that interest….
“But the LLC’s lawsuit does not sully Stern’s reputation in any legally cognizable way. The judgment does not make any findings about Stern’s professional reputation or competence and, indeed, does not mention him at all. Nor, as Stern suggests, does the judgment implicitly make any such finding. Reformation may be granted to correct a mutual mistake…, including one due to a drafting error….No finding of fault is required. Because the issue before the trial court was whether there was a mutual mistake—not why it was made—the judgment did not rest on any implicit finding of malpractice.”
Stern stressed that the complaint contained allegations damaging his reputation. Hoffstadt responded that he was accused merely of an “inadvertent” error and the allegations “in any event, are likely covered by the litigation privilege and hence not actionable.”
Alleges Fraud
The lawyer insisted that he has an interest in preventing the parties from perpetrating a fraud on the court.
“But if an interest in the integrity of the judicial process were sufficient to confer standing to intervene, any taxpayer or lawyer could intervene in any case,” Hoffstadt said. “That is not the law.”
The purpose of the lawsuit, Stern asserted, was to gain a tax benefit, fraudulently.
“Again, however, Stern has no greater interest in preventing a possible tax fraud that may be effectuated by the LLC’s reformation lawsuit than any other taxpayer,” the jurist said.
Addressing the denial of the motion to set aside the judgment, Hoffstadt wrote:
“The trial court did not abuse its discretion in denying Stern’s motion to set aside the judgment because Stern lacked a sufficient ‘right, claim or interest’ to upset the judgment for the same reasons he lacked a sufficient interest to intervene.”
The case is Buffalobyrd, LLC v. Ridder, B281924.
Stern and Ridder represented themselves. Ronald W. Makarem and Jared V. Walder of Makarem & Associates acted for the LLC.
Stern on March 24, 2009, filed an action in the U.S. District Court for the Central District of California based on the forwarding of an email he wrote, claiming a copyright violation.
The email was sent to the Consumer Attorneys Association of Los Angeles listserv. It said:
“Has anyone had a problem with White, Zuckerman...cpas including their economist employee Venita McMorris over billing or trying to churn the file?”
Judge Dolly M. Gee dismissed the action, commenting in a footnote:
“Plaintiff begins his argument rhetorically, querying whether the following sentence is copyrightable: ‘To be, or not to be, that is the question?’…(quoting William Shakespeare, Hamlet act 3, sc. 1).) Perhaps, a more appropriate play from which to draw quotations would be Much Ado About Nothing.”
Stern was quoted by the ABA Journal as saying:
“She thinks an attorney stealing another attorney’s work product from a confidential Listserv is much ado about nothing? The court will be reversed on appeal.”
It wasn’t. The Ninth U.S. Circuit Court of Appeals on March 20, 2013, said in a memorandum opinion:
“The district court did not err in granting summary judgment on Stern’s copyright claims. Stern’s post is not copyrightable because it lacks the ‘modicum of creativity’ necessary to satisfy the originality requirement of the Copyright Act….Because we conclude that Stern’s post is not copyrightable, we do not reach the district court’s alternative holding that the defendants’ use was fair.”
On March 28, 2003, the Court of Appeal for this district, in an unpublished opinion, affirmed an order by then-Los Angeles Superior Court Judge James Otero (now a judge of the U.S. District Court for the Central District of California) declaring Stern a vexatious litigant.
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