Case Name: John S. Perkins v. Eileen Kempis, et al.
Case No.: 16-CV-290435

Currently before the Court is the motion by defendant and cross-complainant Richard Johnson (“Johnson”) for summary adjudication.

Factual and Procedural Background

This action arises out of a dispute over attorney fees. In early 2016, plaintiff and cross-defendant John S. Perkins (“Perkins”) filed a complaint against Johnson and defendant Eileen Kempis (“Kempis”) (collectively, “Defendants”), alleging that Defendants owed him attorney fees, costs, and expenses under the terms of a written fee agreement. The complaint alleged causes of action for: (1) breach of contract; (2) common count; (3) account stated; and (4) constructive trust.

A few months later, Johnson filed a cross-complaint against Perkins. According to the allegations of the cross-complaint, Kempis sought Perkins’ legal assistance in December 2010. (Cross-Complaint, ¶ 6.) Kempis “believed she owned one share of a cooperative housing development that allowed her to reside in the home in that development … .” (Ibid.) Kempis sought Perkins’ legal assistance “after she discovered a fraud perpetrated by her father and his second wife … that interfered with her ownership of the coop share and had resulted in a default and a foreclosure notice on the property by a lending institution.” (Ibid.)

At that time, Perkins learned that Kempis was unemployed and Johnson, Kempis’ boyfriend, was employed. (Cross-Complaint, ¶¶ 5-6.) Perkins prepared a fee agreement for two clients to sign and told Kempis that he would not agree to represent her unless Johnson also signed the agreement. (Id. at ¶ 7.) Kempis provided Johnson a copy of the agreement, which purported to make Johnson a client of Perkins. (Id., ¶ 8.) Johnson, subsequently, signed the agreement. (Id. at ¶¶ 8 and 16.) At no time did Perkins advise Johnson that “he would not do any legal work for [Johnson],” “the only case he was handling was one involving Kempis,” and “only Kempis would benefit from his representation.” (Id. at ¶ 9.)

Perkins worked on the case until October 2014, when he withdrew. (Cross-Complaint, ¶ 10.)

Johnson alleges that Perkins owed him fiduciary duties in light of their attorney-client relationship. (Cross-Complaint, ¶ 12.) Specifically, Perkins had an alleged “duty to disclose to [Johnson] all significant developments in the case and the representation” and “an ongoing duty to explain to [Johnson] that [Perkins] was not going to perform any legal work for [Johnson], that only Kempis would benefit from [Perkins’] efforts, that [Perkins] would nevertheless consider that [Johnson] had the obligation to pay [Perkins’] fees and the costs of Kempis’ case, and that [Perkins] had an obligation not to agree to collect, charge or collect an unconscionable fee.” (Ibid.) Perkins allegedly failed to advise Johnson of the foregoing. (Id. at ¶ 13.) Additionally, Perkins failed to advise Johnson in writing of “the conflict of interest that naturally existed by representing two clients … .” (Ibid.) Furthermore, Perkins failed to obtain Defendants’ written consent to “the conflicting representation” and “the arrangement whereby Kempis’ legal fees would be paid by another … .” (Ibid.)

Johnson relied on the nondisclosures and paid Perkins approximately $10,000 in fees and costs. (Cross-Complaint, ¶¶ 14, 16, and 20.) Johnson alleges that the fee charged and collected by Perkins was unconscionable because the fee agreement allowed Perkins to “collect a fee and costs for doing no work for [Johnson].” (Id. at ¶ 19.) In addition, Perkins allegedly converted the funds to his own use and for his own benefit. (Id. at ¶ 20.) Johnson alleges that Perkins “should be made to hold all money received from [him] in a constructive trust and then to disgorge all said money to [him].” (Id. at ¶¶ 20 and 23.)

Based on the foregoing allegations, Johnson alleges the following causes of action against Perkins: (1) fraud; (2) conversion and constructive trust; and (3) unfair business practices.

In mid-2017, Johnson moved for summary judgment of Perkins’ complaint. The court order granting Johnson’s motion for summary judgment of the complaint was filed on September 29, 2017.

On June 22, 2018, Johnson filed the instant motion for summary adjudication. Perkins filed papers in opposition to the motion on August 28, 2018. On September 4, 2018, Johnson filed a reply.

Discussion

Johnson moves “for summary adjudication of the following issue in his cross-complaint …: [w]hether … Perkins must disgorge all compensation paid to him by … Johnson on behalf of … Kempis in the underlying case due to Perkins’ failure to comply with the requirements of the California Rules of Professional Conduct, Rule 3-310, subdivision (F).” (Ntc. Mtn., p. 2:6-12; see Mem. Ps. & As., pp. 2:17-20 [“Johnson brings this motion as one for summary adjudication of the issue that Perkins must disgorge whatever sums he received from Johnson.”] and 12:10-13 [“Johnson urges the court to grant his motion for summary adjudication on the issue of whether Perkins must disgorge or refund all payments he received from Johnson for his representation of Kempis.”]; see also Sep. Stmt. UMF, p. 2:1-3.)

I. Requests for Judicial Notice

A. Johnson’s Request

Johnson asks the Court to take judicial notice of Perkins’ complaint and the court order filed on September 29, 2017, granting his motion for summary judgment of the complaint.

The subject court records are generally proper subjects of judicial notice under Evidence Code section 452, subdivision (d), which states that the court may take judicial notice of “[r]ecords of any court of this state.” The statute permits trial courts to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [courts] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455 (Woodell).) Consequently, Court will only take judicial notice of the existence of the subject documents and the truth of the results reached in the September 29, 2017 court order. The Court will not take judicial notice of the truth of hearsay statements in those documents.

Accordingly, the request for judicial notice is GRANTED as to the existence of the subject court records and the truth of the results reached in the September 29, 2017 order.

B. Perkins’ Request

Perkins asks the Court to take judicial notice of: various documents filed in Kempis’ bankruptcy case (In re Eileen Kempis, United States Bankruptcy Court Northern District of California, Case No. 17-51357 MEH); a transcript of proceedings in Kempis’ bankruptcy case; and documents filed in connection with Perkins’ opposition to Johnson’s motion for summary judgment of the complaint.

The subject court records are generally proper subjects of judicial notice under Evidence Code section 452, subdivision (d). (See Evid. Code, §452, subd. (d) [permitting judicial notice of court records]; see also Woodell, supra, 17 Cal.4th at p. 455 [courts may “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [courts] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact”]; Kumaraperu v. Feldsted (2015) 237 Cal.App.4th 60, 65 [taking judicial notice of a hearing transcript].) Consequently, Court will take judicial notice of the existence of the subject documents and the truth of the results reached in any orders. The Court will not take judicial notice of the truth of hearsay statements in those documents.

Accordingly, the request for judicial notice is GRANTED as to the existence of the subject documents and the truth of the results reached in any order.

II. Evidentiary Objections

In connection with his reply, Johnson submits objections to some of the evidence offered by Perkins in opposition to the motion.

As an initial matter, the objections are procedurally improper because Johnson failed to provide the Court with a proposed order for his evidentiary objections. (See Cal. Rules of Ct., rule 3.1354(c) [a party must provide a proposed order that complies with one of the formats described in the rule].)

Additionally, the evidentiary objections are not material to the disposition of Johnson’s motion because the motion fails on procedural grounds, as explained below. (See Code Civ. Proc., § 437c, subd. (q) [in granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion].)

Because Johnson’s evidentiary objections do not comply with the California Rules of Court and are not material to the disposition of the motion, the Court declines to rule on the objections. (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only have duty to rule on evidentiary objections presented in proper format]; see also Hodjat v. State Farm Mut. Auto. Ins. Co. (2012) 211 Cal.App.4th 1, 8 [trial court is not required to rule on objections that do not comply with California Rules of Court, rule 3.1354 and is not required to give objecting party a second chance at filing properly formatted papers]; Code Civ. Proc., § 437c, subd. (q) [“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion.”].)

III. Procedural Issue

As a threshold issue, though not addressed by the parties, Johnson’s motion for summary adjudication is procedurally improper. As previously stated, Johnson moves for summary adjudication of the issue of whether Perkins must disgorge all compensation paid to him by Johnson. (See Ntc. Mtn., p. 2:6-12; see also Mem. Ps. & As., pp. 2:17-20 and 12:10-13; Sep. Stmt. UMF, p. 2:1-3.)

Generally, a party may only move for summary adjudication as to the following:

[O]ne or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.

(Code Civ. Proc., § 437c, subd. (f)(1).)

As framed, Johnson’s motion does not seek summary adjudication of one or more of the causes of action alleged in the cross-complaint, an affirmative defense, a claim for damages as specified in Civil Code section 3294, or one or more issues of duty. Johnson does not set forth, or otherwise discuss, any of the elements of his claims for fraud, conversion and constructive trust, and unfair business practices. Johnson makes no attempt to demonstrate that there is no triable issue of material fact as to each element of any of his causes of action. (See Paramount Petroleum Corp. v. Super. Ct. (2014) 227 Cal.App.4th 226, 241 (Paramount) [where a plaintiff moves for summary judgment or adjudication, the plaintiff bears the initial burden of showing that there is no defense to a cause of action by proving each element of the cause of action].) Similarly, Johnson does not assert, or otherwise establish, that the issue presented for summary adjudication—whether Perkins must disgorge all compensation paid to him—disposes of his claims in their entirety. Additionally, Johnson does not present any argument regarding an affirmative defense or damages under Civil Code section 3294. Finally, Johnson does not ask the Court to summarily adjudicate whether Perkins owed a legal duty for purposes of a tort claim or a contractual duty. (See Linden Partners v. Wilshire Linden Associates (1998) 62 Cal.App.4th 508, 517-19 and Paramount, supra, 227 Cal.App.4th at p. 243 [summary adjudication of “issues of duty” refers to whether a defendant owed a legal duty for purposes of a tort claim, such as negligence, or a contractual duty].)

Rather, Johnson seeks to summarily adjudicate the general issue of whether he is entitled to the remedy of disgorgement. (See Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1521-22 [disgorgement is a remedy, not an element of a cause of action].) This issue does not fall within the scope of Code of Civil Procedure section 437c, subdivision (f)(1). (See Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1136 [summary adjudication of general “issues” is prohibited].)

Consequently, the issue identified by Johnson is not a proper subject for summary adjudication absent compliance with the procedures set forth in subdivision (t) of Code of Civil Procedure section 437c. Under subdivision (t), a party may move for summary adjudication of a legal issue or a claim for damages (other than punitive damages), if the following requirements are met before the filing of the motion:

• the parties stipulate that such a motion may be brought;
• the parties each file a declaration justifying the filing of the motion on the ground “that the motion will further the interest of judicial economy by decreasing trial time or significantly increasing the likelihood of settlement”; and
• the court determines that the motion may be filed.

(Code Civ. Proc., § 437c, subd. (t)(1)- (2).)

None of the foregoing actions occurred here and, therefore, Johnson is not entitled to summary adjudication of issue set forth in his notice of motion. Consequently, Johnson’s motion for summary adjudication is DENIED.