Magana Cathcart McCarthy v. Cb Richard Ellis, Inc.
| Decision Date | 21 May 2009 |
| Docket Number | No. B203777.,B203777. |
| Court | California Court of Appeals Court of Appeals |
| Parties | MAGAÑA CATHCART McCARTHY, Plaintiff and Appellant, v. CB RICHARD ELLIS, INC., Defendant and Respondent. |
Zimmermann, Koomer, Connolly, Finkel & Gosselin and Scott Z. Zimmermann for Plaintiff and Appellant.
Bingham McCutchen, Michael A. Sherman, Scott Vick, Robert W. Peyton and John T. Thornton for Defendant and Respondent.
Without filing a motion for summary judgment or mandatory separate statements of undisputed facts, and for the purpose of creating appellate review of pretrial rulings, the parties to an action in a complex litigation case stipulated that the court would have granted summary judgment based upon its ruling on certain "threshold issues" in favor of defendant. The stipulation also included a dismissal, without prejudice, of class action allegations.
We disapprove of the unauthorized procedure utilized to create appellate review without compliance with the mandatory requirements of a summary judgment, and reverse. The requirements of a motion for summary judgment and the supporting separate statements of undisputed facts are expressly mandated by statute and court rules. In the absence of such documents, the stipulated judgment cannot stand. The convenience of the parties in a complex litigation case, and their desire to be spared the expense of a summary judgment motion, do not warrant deviation from the procedural requirements of summary judgment applicable to litigants who do not have the benefit of appearing in the complex litigation court. In addition, the stipulated judgment in this case violates an express agreement between the parties and the trial court that rulings on the threshold issues would not be a substitute for a motion for summary judgment that complies with the Code of Civil Procedure. We also conclude there is nothing about this action that warrants an exception to the foregoing rules promulgated by the Legislature and Judicial Council in a case which, in its current posture, involves a potential penalty of $500 and treble damages.
Plaintiff and appellant Magaña Cathcart McCarthy (Magaña), as an individual law firm and on behalf of a class of others, filed a first amended complaint alleging that defendant and respondent CB Richard Ellis, Inc. (CBRE), engaged in a course of conduct sending hundreds of thousands of unsolicited faxes to persons and entities whose telephone numbers were contained in databases maintained by CBRE. It was alleged that a fax sent to Magaña on or about June 18, 2005, was representative of the faxes sent by CBRE. Magaña alleged CBRE's conduct violated the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227), as amended in 2005 by the Junk Fax Prevention Act of 2005 (JFPA). Magaña's action sought injunctive relief, statutory damages in the amount of $500 for each unsolicited fax, and treble damages as provided in the statute.
The cause of action was screened for the complex litigation court, but initially was not designated as a complex litigation case. (Super. Ct. L.A. County, Local Rules, rule 7.3(k)(2).) At a hearing on objections to the designation, counsel for Magaña orally advised the court "on information and belief" that "class members number well into the tens of thousands." Based upon that representation, the court designated the action as complex and a trial court was assigned.
With the assistance of the complex litigation court, the parties stipulated that it would be helpful to manage the litigation (see Cal. Rules of Court, rule 3.400(a)) by determination of three threshold issues: (1) the effective date of the opt-out provisions of the JFPA—either the date of enactment of the statute (July 9, 2005) or the date of the adoption of implementing regulations by the Federal Communications Commission (FCC) (Aug. 1, 2006); (2) whether the fax received by Magaña on its face complied with the opt-out notice requirements of the JFPA, including determination of issues of "materiality" and "substantial compliance" with the opt-out notice requirements; and (3) whether an express invitation or permission to send a fax may be given orally.
The parties stipulated that consideration of these issues prior to class certification was an efficient means of narrowing the litigation. In addition, "The parties recognize that the Court's determination of these issues is not meant as a substitute for any future summary adjudication motions as to specific facts" and if any party wished to use the court's ruling on threshold issues, "an appropriate [motion] may be made in accordance with the Code of Civil Procedure and any future Case Management Orders by this Court." (Italics added.) The trial court orally stated: "This is not in lieu of a motion for summary judgment or in lieu of summary adjudication of issues."
Simultaneous briefs on the merits were filed by the parties on the threshold issues. In addition, Magaña filed a motion to strike factual assertions in CBRE's briefs, arguing the parties had agreed to seek "a pure legal determination" of the threshold issues, but that CBRE raised multiple factual issues in its brief.1
The trial court resolved the threshold issues as follows: (1) the opt-out notice provisions of JFPA became effective only when the FCC promulgated regulations on August 1, 2006, and prior to that, entities with an established business relationship with fax recipients could not be held liable for failure to adhere to the opt-out notice requirements; (2) substantial compliance is a defense to a claim of failure to comply with the opt-out mechanisms of the statute; and (3) express permission to receive a fax under the JFPA need not be in writing. The court denied Magaña's motion to strike but did not consider the factual assertions of CBRE.
After the trial court's resolution of the threshold issues, Magaña petitioned for writ relief in this court, which was summarily denied. (Magaña Cathcart McCarthy v. Superior Court (June 20, 2007, B197675).)
After denial of the writ petition, the parties and the trial court discussed resolution of the action. The court again noted the parties' stipulation that its rulings on threshold issues would not be in lieu of a motion for summary judgment. The court suggested the issues be tendered as a demurrer or motion for judgment on the pleadings, which the court would grant. Instead, the parties entered into a stipulation for judgment.
I. The Stipulation for Judgment
In a document entitled "Stipulation for Judgment," the parties stipulated to the following facts:
(1) CBRE sent a fax advertisement to Magaña on July 18, 2005, a copy of which was attached to the complaint. At that time, Magaña had an established business relationship with CBRE pursuant to the TCPA (2) On March 14, 2006, Magaña commenced this action for violation of the TCPA, as amended by the JFPA, asserting an individual claim for receipt of the fax and claims on behalf of a putative class of similarly situated fax recipients;
(3) No motion for class certification had been made and discovery had been stayed;
(4) On January 24, 2007, the trial court issued its ruling on the threshold issues and found "[a]mong other things," that the FCC regulations recognized an established business relationship exception to unsolicited faxes, applicable to the fax received by Magaña, the exception applied to both business and residential telephone subscribers, and the opt-out notice requirements of the JFPA were not in effect on the date Magaña received the fax;
(5) The trial court's order was issued pursuant to a written stipulation of the parties that the ruling would not substitute for a summary adjudication motion, and if a party wished to file a subsequent motion applying the court's ruling, it would do so in accordance with the Code of Civil Procedure. Since the court issued its ruling, Magaña has not requested leave to file an amended complaint;
(6) A petition for writ of mandate, filed by Magaña challenging the trial court's rulings, was summarily denied by the Court of Appeal;
(7) The parties ; and
(8) Neither Magaña nor Magaña's counsel received any consideration in connection with the stipulation, including the dismissal of the claims of the putative class.
The parties further stipulated that if CBRE brought a motion for summary judgment on Magaña's individual claim, the trial court would grant summary judgment because the JFPA's opt-out notice requirements were not in effect on the date CBRE sent the fax, CBRE had an established business relationship with Magaña, and as a result of that relationship, Magaña is deemed to have invited or given permission to CBRE to send the fax.
Because the trial court ruled on these threshold issues, The judgment resolves all claims in the first amended complaint between Magaña and CBRE, and if affirmed on appeal, the judgment shall be final as to all claims of Magaña as an individual.
In addition, Magaña voluntarily dismissed without prejudice all claims in the first amended complaint on behalf of the putative class. The dismissal does not prejudice the putative plaintiffs as to class certification, or CBRE's position that class certification is improper. Magaña intends to appeal the judgment...
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