- Morrow v. Hood
Communications, Inc.,
59 Cal.App.4th
924
Text of
Majority Opinion and Kline's Dissent
Below
are the majority and dissenting opinions in a case decided by
the First District Court of Appeal, Div. Two, on Dec. 2, 1997. The dissent
has led to the filing of formal misconduct charges against Presiding
Justice J. Anthony Kline. Footnotes have been omitted.
MAJORITY:
LAMBDEN, J.-
We have before us
a motion for stipulated reversal of the judgment of the trial court and
dismissal of this appeal. Such motions are not authorized by statute or
rule of court but by the decision of our Supreme Court in Neary v.
Regents of University of California (1992) 3 Cal.4th 273.
Notice of appeal
was filed in this court on June 24, 1997. The issues involved in the appeal
have not been identified and briefed by the parties and the record has
not yet been filed. What little we know about the case comes from the
papers filed in support of the motion for stipulated reversal.
Evidently, plaintiff
Andrew Morrow (Morrow) commenced this action against defendants Hood Communications,
Inc. (Hood) and Fry & Associates (Fry) for the breach of leases pertaining
to separate premises in San Mateo County owned by Morrow. Morrow alleged,
among other things, that Hood was the parent corporation of Fry and liable
as its alter ego. He additionally alleged that Hood and Fry "had engaged
in a de facto merger that rendered Hood liable under the leases." Fry
did not deny liability. The primary issue at trial was the relationship
between Hood and Fry. After a four-day trial to the court, judgment was
rendered for Morrow against both defendants, jointly and severally, in
the amount of $51,331.29, together with interest thereon and reasonable
attorney fees and costs. The court found that Fry was not the alter ego
of Hood but that a de facto merger had occurred and that Hood was therefore
liable for Fry's obligations under the lease with Morrow.
Pursuant to rule
8 of the Local Rules of the First Appellate District (23, pt. 3 West's
Ann. Court Rules (1996 ed.) pp. 91-92), which pertains to motions for
stipulated reversal, counsel for the parties have filed declarations stating
that the judgment does not involve important public rights or unfair,
illegal or corrupt practices, or torts affecting a significant number
of persons not parties to the litigation. On the basis of "information
and belief" counsel also state that "stipulated reversal of the judgment
will not prejudice any third parties," and that they have no knowledge
that the judgment sought to be reversed "would have a collateral estoppel
or other effect on any other matter, claim, or action."
Because we have no
reason to reject the declarations of counsel, we conclude that this case
presents none of the "extraordinary circumstances" which under Neary
v. Regents of University of California, supra, 3 Cal.4th 273, must
be present in order to deny a motion for stipulated reversal.
Under the principles of stare decisis set forth in Auto Equity Sales,
Inc. v. Superior Court (1962) 57 Cal.2d 450, we feel bound by Neary
and, accordingly, grant the motion. We do not, however, believe that the
principles set forth in Auto Equity prevent us from respectfully
stating our agreement with the fundamental principles set forth by Presiding
Justice Kline in his dissent (other than those pertaining to the power
of an inferior court to refuse to acquiesce in precedent established by
a court of superior jurisdiction) and in his opinion in Norman I. Krug
Real Estate Investments, Inc. v. Praszker, (1994) 22 Cal.App.4th 1814,
1825 (conc. opn. of Kline, P. J.). We also agree with Presiding Justice
Kline that this case provides an appropriate vehicle through which the
Supreme Court should reconsider and repudiate the doctrine adopted in
Neary.
Ruvolo, J., concurred.
DISSENTING:
KLINE, P. J.,
Dissenting.--There are rare instances in which a judge of an inferior
court can properly refuse to acquiesce in the precedent established by
a court of superior jurisdiction. (See Caminker, Why Must Inferior Courts
Obey Superior Court Precedents? (1994) 46 Stan.L.Rev. 817; Colby, Two
Views on the Legitimacy of Nonacquiescence in Judicial Opinions (1987)
61 Tul. L.Rev. 1041.) This is, for me, such an instance.
I acknowledge that the opinion of the California Supreme Court in Neary
v. Regents of University of California (1992) 3 Cal.4th 273 requires
that the motion before us be granted. I would deny the motion, however,
because I cannot as a matter of conscience apply the rule announced in
Neary.
I do not refuse to acquiesce in Neary because I believe the opinion
is analytically flawed and empirically unjustified, though, as I have
elsewhere explained at length, that is my view. (Norman I. Krug Real
Estate Investments, Inc. v. Praszker (1994) 22 Cal.App.4th 1814, 1825
(conc. opn. of Kline, P. J.); see also People v. Barraza (1994)
30 Cal.App.4th 114. My refusal is instead based on my deeply felt opinion
that the doctrine of stipulated reversal announced in Neary --
a doctrine employed in no other jurisdiction in this nation and unanimously
repudiated by the Supreme Court of the United States (U.S. Bancorp
Mortgage Co. v. Bonner Mall Partnership (1994) 513 U.S. 18-is destructive
of judicial institutions.
The debate in Neary pertains to the role of the courts. When that
case was here we explained our denial of the motion for stipulated reversal
as follows: "'As imperfect as the process of trial may be, it is the way
in which our society establishes legal truth. Because it is an adjudicative
and not simply a dispositional act, the reversal of a judgment not thought
to be legally erroneous simply to effectuate settlement would trivialize
the work of the trial courts and undermine the integrity of the entire
judicial process.'"
Reversing our ruling, a majority of the Supreme Court dismissed our concerns:
"Homilies about 'judicial integrity' and 'legal truth' will ring hollow
in the ears of the parties," the court declared. According to the Supreme
Court, "The courts exist for litigants. Litigants do not exist for courts."
(Neary v. Regents of University of California, supra, 3 Cal.4th
at p. 280.) In the mind of the Neary majority, "[t]he primary purpose
of the public judiciary is 'to afford a forum for the settlement of litigable
matters between disputing parties.'" (Ibid., quoting Vecki v.
Sorensen (1959) 171 Cal.App.2d 390, 393.)
Our Supreme Court thus ascribes to the "public judiciary" exactly the
same function as that performed by the private judiciary now firmly established
in this state. I cannot accept this view, which I believe misapprehends
the role of American courts. The judicial responsibility is fundamentally
public. "Adjudication uses public resources, and employs not strangers
chosen by the parties but public officials chosen by a process in which
the public participates. These officials, like members of the legislative
and executive branches, possess a power that has been defined and conferred
by public law, not by private agreement. Their job is not to maximize
the ends of private parties, nor simply to secure the peace, but to explicate
and give force to the values embodied in authoritative texts such as the
Constitution and statutes: to interpret those values and to bring reality
into accord with them." (Comment, Against Settlement (1984) 93 Yale L.J.
1073, 1085; see also Ely, Democracy and Distrust: A Theory of Judicial
Review (1980).)
This is the view of the courts endorsed by the United States Supreme Court
in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, supra,
513 U.S. 18, Justice Scalia, who understands the nature of the judicial
responsibility to resolve private disputes (see, e.g., Hewitt v. Helms
(1986) 482 U.S. 755, 761) reiterated in Bonner Mall the observation of
Justice Stevens that " '[j]udicial precedents are presumptively correct
and valuable to the legal community as a whole. They are not merely the
property of private litigants and should stand unless a court concludes
that the public interest would be served by a vacatur.'" (513 U.S. at
p. 26 , quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Philips
Corp. (1993) 510 U.S. 27, 40, Stevens, J., dissenting from dismissal
of certiorari as improvidently granted.) For this reason, Bonner Mall
concludes that vacatur on consent (the federal version of stipulated reversal)
"disturb[s] the orderly operation of the federal judicial system," and
conflicts with "the public interest." (Bonner Mall, supra,
513 U.S. at p. 27. In effect, the United States Supreme Court agreed with
Judge Easterbrook that the judicial process must not permit the judgment
of a trial court, "created at cost to the public and other litigants,
to be a bargaining chip in the process of settlement. The precedent, a
public act of a public official, is not the parties' property." (Matter
of Memorial Hosp. of Iowa County Inc. (7th Cir. 1988) 862 F.2d 1299,
1302.)
The least of the dangers embodied in Neary is that stipulated reversal
will "engender[ ] in trial judges and jurors a sense of demoralization
because the legal regime that they determined to be 'just' is discarded,
without explanation other than that of the parties' desires." (Resnik,
Whose Judgment? Vacating Judgments Preferences for Settlement, and the
Role of Adjudication at the Close of the Twentieth Century, supra,
41 UCLA L.Rev. at p. 1533.) The much greater danger is a public perception
that civil judgments are commodities that may be bought and sold, which
is sure to undermine the public respect for judicial institutions that
is the genuine source of judicial authority. Should this occur, it is
the rule of law that would be endangered, not just the reputation of the
courts of this state.
Neary brushes off this threat to the integrity of the judicial
process on the strange theory that stipulated reversal, which it goes
to such pains to defend, is ineffectual. According to Neary, stipulated
reversal will create "no inference that the jury or trial court erred.
Whatever conclusions the public wishes to draw from the litigation can
still be drawn after reversal." (Neary v. Regents of University of
California, supra, 3 Cal.4th at p. 283.) This makes no sense.
If stipulated reversal justified no such inference the remedy would never
be sought.
The parties in this case waived a jury and submitted their dispute to
the Honorable Harlan K. Veal, Judge of the San Mateo Superior Court. After
conducting a public trial, Judge Veal made a variety of factual determinations
and on that basis rendered judgment for the plaintiff. For reasons not
revealed by the record, the defendants induced the plaintiff to agree
to the reversal of that judgment as a condition of settlement. This bargain
would have been pointless unless defendants believed our order would cast
doubt on the validity or force of the judgment of the trial court. The
parties have not, however, even claimed, let alone shown, that the judgment
rendered by Judge Veal is erroneous in any way, and it remains presumptively
correct. The reversal of such a judgment is either a travesty or a charade.
In either case, I refuse to participate. "Judicial decisions are not for
sale." (Russell v. Turnbaugh (D.Colo. 1991) 774 F.Supp. 597, 600,
citing Clarendon Ltd. v. Nu-West Industries, Inc. (3d Cir. 1991) 936 F.2d
127, 129.)
I am not the first judge to refuse to apply the doctrine articulated in
Neary. (Benavides v. Jackson Nat. Life Ins. Co. (D.Colo.
1993) 820 F.Supp. 1284, 1285.) My conscientious refusal to acquiesce is
not designed to offend our Supreme Court, for which I have the most profound
respect. It is constitutionally justified and, I hope, constructive. As
has been stated, "[s]o long as the lower court may still be reversed by
the higher court, there is no interference with either the 'supremacy'
of the Supreme Court or with the idea of the rule of law. While lower
courts may be 'inferior' in the hierarchy-i.e., their decisions can be
countermanded by a higher tribunal-they are not constitutionally subordinate
in terms of either their duties under the Constitution or their relationship
to higher courts....Neither can it be said that 'underruling' actually
undermines the rule of law, so long as the superior court is allowed to
review and reverse. Indeed, quite to the contrary, such 'underruling'
may be an essential part of the process of judicial self-correction, and
has occurred in the past to force Supreme Court reconsideration of questionable
constitutional decisions." (Paulsen, Accusing Justice: Some Variations
on the Themes of Robert M. Cover's Justice Accused (1990) 7 J. Law &
Religion 33, 85-86, fns. omitted.)
While I will refuse to apply the Neary rule when asked to do so
by litigants, I will of course comply with an order of the California
Supreme Court to grant a particular request for stipulated reversal, a
purely ministerial act. Neary, which has no beneficial results,
has not stood up to scrutiny. It is an unwise and even dangerous decision
that warrants reconsideration by our Supreme Court. However, because motions
for stipulated reversal are by nature collaborative and almost never opposed,
and because the Courts of Appeal have little discretion to deny them,
petitions for review to the Supreme Court are unlikely. That court will
therefore have few opportunities to reconsider Neary unless it exercises
its power to review on its own motion. (Cal. Rules of Court, rule 28(a)(1).)
This case provides an excellent opportunity for the exercise of that power.
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