Fifth District Reminds Appealing Litigants and Appellate Counsel That They Should Not “Bait and Switch” or Simply “Vent Their Spleen” Before the Appellate Courts.
The next case we discuss reinforces that appellate practice has different rules, with litigants needing to carefully assess whether they have some legal or factual errors of a prejudicial nature. Simply “venting spleens” or switching positions completely can result in imposition of sanctions, as they did in the decision of PDM Steel Service Centers, Inc. v. Mullen & Filippi, Case No. F04031 (5th Dist. Aug. 8, 2008) (unpublished).
There, defendant obtained the set aside of an entry of default based on defective service. Subsequently, the trial court ordered plaintiff’s counsel to pay to defendant’s counsel $5,341.40 in attorney’s fees and $553.02 in costs incurred in successfully bringing the motion of set aside the default. See Code Civ. Proc. sec. 473(c)(1)(C). In fact, at a recorded hearing, one of plaintiff’s counsel admitted the set aside decision was correct based on the evidence and indicated “we’re here merely to take, I guess, our lumps which are to answer to the sanctions.” Evidence below also showed that defendant’s counsel offered to accept service through the acknowledgment/receipt procedure even after the defective service, but this seemingly reasonable proposal was not accepted.
Curiously enough, plaintiff appealed (represented by the same trial counsel). Neither plaintiff nor its attorneys should have done so, because appellate sanctions were imposed in addition to affirmance of the set aside order.
Acting Presiding Justice Levy, writing for a 3-0 panel of the Fifth District, found it inexplicable that plaintiff reversed course from its position in the trial court—the set aside order was justified—by arguing on appeal that plaintiff complied with service of process requirements. Not only did this conduct below give rise to waiver, but sterner language came from the appellate panel. “Bait and switch on appeal not only subjects the parties to avoidable expense, but also wreaks havoc on a judicial system too burdened to retry cases on theories that could have been raised earlier. (JRS Products, Inc. v. Matshusita Electric Corp. of America (2004) 115 Cal.App.4th 168, 178.) Appellant’s attack on the trial court’s sanctions—via a rehashing of factual points to which appellant’s trial counsel conceded in the superior court—is tantamount to a forbidden ‘bait and switch.’” (Slip Opn., at p. 23.) Sanctions were found justified under the abuse of discretion review standard.
That was not the end of appellate saga for plaintiff or its counsel. Defendant filed a motion for imposition of sanctions against plaintiff and its counsel for bringing a frivolous appeal under Code of Civil Procedure section 907. Applying the factors set forth in In re Marriage of Flaherty, 31 Cal.3d 637 650 (1982) [one of our Leading Cases], Justice Levy found that the appeal was frivolous based on the “bait and switch” strategy, a selective recitation of only favorable facts, a failure to address the trial judge’s reliance on certain statutory provisions that were dispositive in nature, and omission of critical documents from the clerk’s transcript on appeal (which transcript is prepared at appellant’s direction). “An opening brief on appeal is not an appropriate vehicle for an attorney to ‘vent his spleen’ after sustaining a loss in the trial court …. An unsupported appellate tirade is more than just words on papers; it represents a real cost to the opposing party and the state. An appellate outburst, when committed to the pages of an opening brief, becomes an expensive proposition for all those concerned. Justice requires that those costs be borne by the person or persons who unreasonably caused them.” (Slip Opn., at p. 25.)
The inquiry then turned to the amount of sanctions to be imposed. The appellate panel considered such factors as the amount of respondent’s attorney’s fees on appeal; the amount of the judgment against appellant; the degree of frivolousness and delay; and the need for discouragement of like conduct in the future, citing Pierotti v. Torian, 81 Cal.App.4th 17, 33-34 (2000). Defendant introduced evidence in the sanctions motion indicating that it incurred appellate attorney’s fees and costs totaling $6,131.12. Given the reasonableness of the sanctions request, in tandem with the delay and high degree of frivolousness, the Fifth District imposed $6,131.12 in sanctions jointly and severally against plaintiff’s counsel. But it went even farther. Even though a 1992 study indicated that it cost about $6,000 for the state to process an average civil appeal (and these costs likely have risen higher in the last few years), the appellate panel believed that the sanctioned attorneys should also pay $3,000 to the clerk of the court as compensation for having to process a frivolous appeal. Lastly, the sanctioned attorneys were ordered to forward a copy of the opinion to the State Bar upon return of the remittitur. (The remittitur is the “finality” order issued after the time to seek review from the state supreme court expires or review is denied. See Cal. Rules of Ct., rule 8.272.)
BLOG OBSERVATION—In line with our Mission Statement, the PDM Steel panel reemphasizes that attorney’s fees are an important part of the process, but not just because they are receivables for the practicing attorney. It offered the following quote from International Industries, Inc. v. Olen, 21 Cal.3d 218, 224 (1978), which cogently complements our Mission Statement: “The purpose of litigation is to resolve participants’ disputes, not compensate participating attorneys. Our courts are sufficiently burdened without combat kept alive solely for attorney fees.” We hope our blog is offering everyone tips on how to litigate fee proceedings and is inspiring thought about fee entitlement/exposure at all stages of a particular matter.