Amis v. Greenberg Traurig LLP

• Decision Date: 18 March 2015
• Docket Number: B248447
• Citation: 185 Cal.Rptr.3d 322,235 Cal.App.4th 331
• Court: California Court of Appeals
• Parties: John AMIS, Plaintiff and Appellant, v. GREENBERG TRAURIG LLP et al., Defendants and Respondents

235 Cal.App.4th 331

185 Cal.Rptr.3d 322

John AMIS, Plaintiff and Appellant

v.GREENBERG TRAURIG LLP et al., Defendants and Respondents

B248447

Court of Appeal, Second District, Division 3, California.

Filed March 18, 2015

Roger L. Stanard, Woodland Hills, for Plaintiff and Appellant.

Gaims Weil West, Alan Jay Weil and Steven S. Davis, Los Angeles, for Defendants and Respondents.

KITCHING, Acting P.J.

INTRODUCTION

In this opinion we again acknowledge our Supreme Court's near categorical prohibition against judicially crafted exceptions to the mediation confidentiality statutes and hold a malpractice plaintiff cannot circumvent mediation confidentiality by advancing inferences about his former attorney's supposed acts or omissions during an underlying mediation.

Plaintiff John Amis (Amis) appeals from a summary judgment in favor of his former attorneys Greenberg Traurig, LLP, Naoki Kawada and John M. Gatti (collectively, GT). Amis's operative complaint alleges GT committed attorney malpractice by “caus[ing]” him to execute a settlement agreement that converted his company's corporate obligations into Amis's personal obligations without advising Amis that he had little to no risk of personal liability in the underlying litigation. GT moved for summary judgment citing Amis's undisputed admission that all advice he received from GT regarding the settlement agreement was given during a mediation. Based on this undisputed fact, GT argued Amis could not obtain evidence to support his claims, and GT could not produce evidence to defend itself, because the disclosure of such evidence was barred by the mediation confidentiality statutes. The trial court agreed on both counts and entered summary judgment for GT. We affirm.

FACTS¹ AND PROCEDURAL BACKGROUND

1. The Path Litigation

Amis was a minority shareholder and officer of Pacific Marketing Works, Inc. (Pacific), a company that exported women's clothing apparel to Japan. In 2006, Pacific sued Path Productions, LLC, and its principals (collectively, Path) alleging Path breached a 2002 contract to design apparel for Pacific. Path responded with a cross-complaint against Pacific, Amis and other Pacific shareholders, alleging, inter alia, breach of contract, fraud and alter ego liability (the Path Litigation).

In June 2007, while the Path Litigation was pending, Pacific entered into a proposal for acquisition with a Japanese entity, Sojitz Corporation, which had expressed interest in purchasing Pacific's assets. GT represented Sojitz in the proposed transaction. One of the proposal's terms required “favorable settlement or resolution” of the Path Litigation.

Until September 2007, Amis and his co-cross defendants were represented in the Path Litigation by two law firms—Miller Barondess and Radcliff & Saiki. When those firms withdrew, Amis and company engaged GT to represent them in the Path Litigation, and Sojitz agreed to pay GT's fees for the representation. GT obtained a written conflict waiver from all interested parties, which included a declaration that its “representation of [Pacific] and its [shareholders] in the [Path Litigation] will not be compromised or adversely affected by our representation of Sojitz in connection with [the Pacific acquisition].”

2. The Path Litigation Is Settled at Mediation

Shortly after GT took over Amis's representation in the Path Litigation, the parties engaged in two separate rounds of mediation in October and November of 2007. Amis attended both mediations. At the November 2007 mediation, the parties negotiated and executed a written settlement agreement and mutual general release.

Under the settlement agreement, Amis and the other Pacific parties agreed, jointly and severally, to pay $2.4 million to Path on an agreed payment schedule beginning on December 26, 2007, in exchange for dismissals with prejudice of each side's claims and mutual releases. The parties further agreed to a stipulation for entry of judgment in the amount of $2.4 million (less any payments made) in favor of Path if the Pacific parties failed to make the agreed payments when due.

3. Amis's Complaint Against GT

Shortly after the parties executed the mediated settlement agreement in the Path Litigation, Sojitz decided not to acquire Pacific's assets, leaving Amis and the other Pacific shareholders without sufficient funds to make the scheduled settlement payments. In January 2008, Path declared a default and successfully moved for entry of the stipulated judgment pursuant to the settlement agreement. When Path attempted to enforce the judgment, Amis and the other Pacific parties declared bankruptcy.

In November 2009, Amis filed the instant action against GT. The operative first amended complaint asserts three causes of action for breach of fiduciary duty, attorney malpractice and breach of the conflict waiver. In support of the claims, Amis alleges GT (1) “failed [to] advise [him] of the risks involved for his personal liability under the proposed settlement agreement”; (2) “drafted, structured, and caused to be executed a settlement agreement and stipulated judgment converting the corporate obligations of [Pacific] into [Amis's] personal obligations”; and (3) breached the conflict waiver by “failing to negotiate a settlement that was contingent on Sojitz's purchase of [Pacific's] assets in an amount sufficient to fund the settlement.”

4. GT's Motion for Summary Judgment

GT deposed Amis in advance of its motion for summary judgment. At his deposition, Amis admitted that all “discussions,” “explanations,” and “recommendations” that he had with or received from GT regarding the settlement agreement occurred during the mediation.² Amis also admitted that all his claimed damages resulted from executing the settlement agreement at the mediation.

Based on the foregoing undisputed facts, GT moved for summary judgment. Because Amis alleged GT caused him to execute the settlement agreement without advising him of the implications for his personal liability, and all GT's discussions with Amis regarding the settlement agreement occurred during the mediation, GT argued “[b]oth sides must necessarily rely on communications made in connection with that mediation in order to prove or rebut [Amis's] claims.” However, since the mediation confidentiality statutes barred each side from offering evidence of such communications, GT argued Amis could not prove an essential element of his claims, nor could it effectively defend itself against his allegations. Under either circumstance, GT maintained it was entitled to summary judgment.

Amis opposed the motion with his own declaration and declarations from other attorneys in the Path Litigation, including Path's attorney, Douglas Dal Cielo, and the Pacific parties' former attorney, Eric H. Saiki. With his declaration, Amis sought to establish that he never would have attended the mediation, nor would he have agreed to be jointly and severally liable for Pacific's liabilities, had he been advised prior to mediation that he had little to no risk of being held personally liable on Path's claims. Dal Cielo and Saiki each declared that if the Path Litigation had gone to trial, Amis would not have been found personally liable.

Amis also submitted the declaration of his proffered legal malpractice expert, Robert C. Baker. Baker opined that GT's conduct fell below the standard of care and there was “no advice [GT] could have given to John Amis during mediation that would justify making John Amis personally liable for payment of $2,400,000.” Setting aside any communications that might have occurred during the mediation, Amis argued all the evidence, when taken together, permitted a reasonable inference that GT's misconduct caused him to execute the settlement agreement and incur personal liability that he otherwise would have avoided had the Path Litigation gone to trial.

5. The Summary Judgment Ruling

The trial court granted GT's summary judgment motion. The court agreed that Amis could not establish an essential element of his claims, because it was undisputed that any act or omission by GT that purportedly caused Amis to execute the settlement agreement occurred during the mediation. The court also refused to entertain an inference that GT caused Amis to execute the settlement agreement during mediation, because the mediation confidentiality statutes effectively barred GT from defending itself against such an inference.

DISCUSSION

1. Standard of Review

“On appeal after a motion for summary judgment has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334, 100 Cal.Rptr.2d 352, 8 P.3d 1089.) We “ ‘consider all of the evidence’ and ‘all’ of the ‘inferences' reasonably drawn therefrom [citation], and must view such evidence [citations] and such inferences [citations], in the light most favorable to the opposing party.” (Aguilar, supra, 25 Cal.4th at p. 843, 107 Cal.Rptr.2d 841, 24 P.3d 493.) We make “an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.” (Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222, 38 Cal.Rptr.2d 35.)

A defendant is entitled to summary judgment upon a showing that the plaintiff's action has no merit. (Code Civ. Proc., § 437c, subd. (a).) The defendant meets this burden with respect to each cause of action by establishing undisputed facts that negate one or more elements of the claim or state a complete defense to the cause of action. (Id. subd. (p)(2).) Alternatively, “a defendant may meet its burden of showing that an essential element of the plaintiff's claim cannot be established [by] present [ing] evidence that the plaintiff ‘does not...