Response ReplyCal. Super. - 6th Dist.March 9, 2015\OOOQQUIAUJNv-I NNNNNNNNNv-lr-dr-‘r-‘p-AHH-tv-I-A OONQUIAUJNHOCOOVONMAWNHO JAMES L. PAGANO, ESQ. (Cal. State Bar No. 098185) 5“ E L E D «$13? IAN A. KASS, ESQ. (Cal. State Bar No. 184480) I PAGANO &_ KASS, APC 2016 OCT 2! EH 10: Ub‘ 96 North Thlrd Street, Suite 525 San Jose, California 951 12 Telephone: (408) 999-5678 Facsimile: (408) 999-5684 Attorneys for Defendant, Pagano & Kass, PC ° To ’79 41MB IN THE SUPERIOR COURT OF THE STATE 0F CALIFORNIA IN AND FOR THE COUNTY OF SANTA CLARA DAVID MARKEVITCH, an individual, Case No. 1-15-CV-277789 Plaintiff, REPLY TO PLAINTIFF’S OPPOSITION TO MOTION FOR A JUDGMENT v. NOTWITHSTANDING THE VERDICT PAGANO & KASS, PC, a Professional Date: October 28, 2016 Corporation, and DOES 1 through 50, Time: 9:00 a.m. inclusive, Dept. 4 Judge: Hon. Derek Woodhouse Defendants. / COMES NOW, Pagano & Kass, PC (“P&K”), and, as and for a memorandum ofpoints and authorities in reply to the opposition submitted by Plaintiff, David Markevitch (“Plaintiff’), to P&K’s motion for a judgment notwithstanding the verdict (“The Motion”), it offers the following: I. INTRODUCTION In his Opposition,‘ Plaintiff takes issue with P&K’s view that the uncontroverted evidence at trial demonstrated that the Parties did not reach a legally enforceable understanding regarding the referral fee provision (see Trial Exhibit “2,” pp. 2-3) since there was no “meeting of the minds” as to material parts ofthat provision. Rather, Plaintiffcontends that the terms were properly interpreted by the jury, though resulting in a contract that bears no resemblance to what P&K intended. P&K disagrees. Initially, the authorities Plaintiffcites for the proposition that a contract was formed demonstrate that, where, as here, the material terms cannot be interpreted in a way that meets ' Titled, “Plaintiff s Opposition to Defendant’s Motion for Judgment Notwithstanding Verdict” (“Opposition”). REPLY TO PLAINTIFF’S OPPOSITION TO MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 1 \OWNQM-PUJNt-I NNNNNNNNNHr-‘v-tt-Ip-AHHHHH OONQUI-PWNHOKOOONQUIAUJNHO the Parties’ mutual intentions, as the evidence established that such mutuality did not exist here, no contract was formed. Moreover, even assuming contract formation, where, as here, the dispute centers upon disparate uncommum‘cated understandings of the contract terms, interpretation is not within the province of the jury, but is to be accomplished by the trial judge. Thus, to the extent the Court believes that a contract was, indeed, formed, the Court, itself, must undertake the task of interpreting the contract. With respect to the application of Professional Rules of Conduct, Rule 2-200, which, under the circumstances of this Case, requires that a judgment be entered in favor of P&K, Plaintiff, initially, asks the Court to consider a ruling that denied a motion for summary judgment. That request is improper, as a denial ofa summaryjudgment motion does not establish the merits or legal sufficiency of either party’s case, and a trial judge may direct a verdict in favor of the moving party despite the earlier denial of summary judgment. (FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1283.) Turning to the merits of P&K’s claim that Rule 2-200 precludes a judgment in Plaintiff’s favor, Plaintiff, initially, again offers entirely inapposite legal authority, the case of Anderson, McPharlin & Connors v. Yee (“Anderson”) (2005) 135 Cal.App.4th 129, where the Court determined that Rule 2-200 did not apply to the circumstances it considered since the contract there was not a “fee-splitting agreement,” but was, instead, a partnership agreement that provided a measure of damages should a departing partner take business that was developed by the firm. (See id., at pp. 133, 134.) Thus, Plaintiff s reliance upon Anderson is completely unhelpful. Thus, without supporting legal authority, Plaintiff contends that, though he was admittedly not P&K’s associate at the time that P&K earned and received its fees from the lawsuit it prosecuted on behalf ofLouis Morin, he meets the associate exception under Rule 2-200. However, according to the clear terms of that Rule, which requires an association with the fee splitting attorney at_the time the fee is paid, he does not. It follows from the foregoing, as further discussed below, that the Court should grant P&K a judgment in this Case. / / / REPLY T0 PLAINTIFF’s OPPOSITION To MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 2 \OOOQQUIAUJN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. ARGUMENTS A. THE COURT SHOULD ENTER A JUDGMENT IN FAVOR OF P&K SINCE THE EVIDENCE AT TRIAL DEMONSTRATES THAT THE PARTIES DID NOT REACH A MUTUAL UNDERSTANDING REGARDING THE REFERRAL FEE PROVISION OF THE PARTIES’ AGREEMENT. In the Opposition, Plaintiffacknowledges the holding in Ladas v. California State Auto Assn. (1993) 19 Cal.App.4th 761, 771 , that where the material terms of an agreement are “not definite enough,” n0 contractual duty arises. (Opposition, p. 7:7-1 1.) Likewise, Plaintiff observes that the case of Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 815, stands for the proposition that where there is no agreement on a material term(s) to a contract, no contract is formed. (Opposition, p. 8:1-6.) These authorities demonstrate that, as noted in P&K’s moving memorandum, a judgment notwithstanding the verdict is appropriate. (See “Memorandum ofPoints and Authorities in Support ofMotion for a Judgment Notwithstanding the Verdict,” pp. 5: 1 0-1 0:6.) In thjs regard, the testimony at trial demonstrated that the Parties, Plaintiff, on the one hand, and P&K, on the other, had very different understandings ofthe material terms ofthe Referral Fee Provision oftheir agreement. (See id.) 1. Alternatively, the Court Should Independently Interpret the Referral Fee Provision. Though the jury’s verdict re-writes the Referral Fee Provision in a way that the uncontroverted evidence at trial demonstrated bears no resemblance to the one that P&K understood it was entering into with Plaintiff, he asks the Court to adopt the jury’s verdict. However, P&K reminds the Court that it is the Court’s responsibility, not the jury’s, to (1) determine whether the ageement, and its phrases, were ambiguous, and (2) to interpret those phrases that were ambiguous. As Witkin states in his treatise, Summary of California Law, regarding the respective roles of the judge and jury in contract interpretation: The trial court’s determination of whether an ambiguity exists in a contract is a question oflaw, subj ect to independent review on appeal. The trial court’s resolution of an ambiguity is also a question of law if no parol evidence is admitted or if the parol evidence is not in conflict. However, where the parol evidence is in conflict, the trial court’s resolution of that conflict is a question of fact and must be upheld if supported by substantial evidence. Furthermore, when two equally plausible interpretations of the language of a contract may be made, parol evidence is REPLY To PLAINTIFF’S OPPOSITION To MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 3 \OOONONUI-PUJN-n NNNNNNNNNn-In-It-Iv-dp-AHHy-np-np-a WVQUIAUJND-‘OOOONQUI-PWNHO admissible to aid in interpreting the agreement, thereby presenting a question of fact that precludes summary judgment if the evidence is contradictory. (WYDA Associates v. Merner (1996) 42 C.A.4th 1702, 1710, 50 C.R.2d 323; see Waller v. TruckIns. Exchange (1995) 11 C.4th 1, 18, 44 C.R.2d 370, 900 P.2d 61 9, ZSummary (10th), Insurance, § 277 [interpretation of Insurance policy 1s question of law]; Unetco Industries Exchange v. Homestead Ins. Co (1997) 57 C A.4th 1459, 1466, 67 C.R.2d 784 [determination as to whether particular matter falls within appraisal clause of 1nsurance policy ls question of law]. ) In accordance with aforementioned rules governing trial court interpretation, appellate review of that court’s interpretation of a contract or other writing is governed by three rules: (1) Where extrinsic evidence has been properly admitted and the evidence is in conflict, any reasonable construction by the trial judge will be upheld under the general rule of conflicting evidence. (2) Where n0 competent extrinsic evidence has been introduced, the interpretation is derived solelyflom the terms ofthe instrument, the question is one oflaw, and the appellate court will give the writing its own independent interpretation. (3) Where competent extrinsic evidence has been introduced but it is not in conflict, the trial judge’ s inferences from it are not binding on the appellate court; as in the second situation, supra, the appellate court will make an independent determination of the meaning. (See Parsons v. Bristol Dev. C0. (1965) 62 C.2d 861, 866, 44 C.R. 767, 402 P.2d 839; Los Banos Gravel Co. v. Freeman (1976) 58 C.A.3d 785, 791, 130 C.R. 180; Medical Operations Management v. National Health Laboratories (1986) 176 C.A.3d 886, 891, 222 C.R. 455; New Haven Unified School Dist. v. Taco Bell Corp. (1994) 24 C.A.4th 1473, 1483, 30 C.R.2d 469 [following Parsons v. Bristol Dev. C0., supra, and holding that because interpretation did not turn on credibility of extrinsic evidence, it was function of appellate court] El Ca'on v. El Cajon Police Officers’ Assn. (1996) 49 C.A.4th 64, 70, 56 C.R.2d 723 [fol owing Parsons, and applying de novo review where evidence was undisputed and parties drew conflicting inferences], Los Angeles County Metropolitan Trans. Authority v. Shea-Kiewit-Kenny (1 997) 59 C.A.4th 676, 682, footnote 2, 69 C.R.2d 43 1, citing the text [following Parsons, and applying de novo review where extrinsic evidence was not in conflict]; Morey v. Vannucci (1998) 64 C.A.4th 904, 913, 75 C.R.2d 573 [following Parsons; interpretation of contract turned on assessment of conflicting extrinsic evidence, which trial court properly submitted to jury]; Lange v. TIG Ins. Co. (1998) 68 C.A.4th 1179, 1 185, 81 C.R.2d 39, quoting the text; 9 Cal. Proc., 4th, Appeal, § 374 et seq.) Interpretation 0f a written instrument is solely a judicial function unless interpretation turns 0n the credibility ofextrinsic evidence. (De Guere v. Universal City Studios (1997) 56 C.A.4th 482, 501, 65 C.R.2d 438, 6 Cal. Proc. (4th), Proceedings Without Trial, Supp., § 60 [referee exceeded scope of reference by deciding issues of contract enforceability].) (1 Witkin, Summary of California Law (lO‘h Ed. 2016), Contracts, §741 [italicized typeface represents emphasis added].) In this case, there was no competent extrinsic evidence offered at trial upon which the interpretation of an ambiguity may legitimately be based. In this regard, the only material conflict at trial was in the Parties’ purportedly disparate, and uncommunicated, understandings of the meanings of terms in the Referral Fee Provision, including (1) whether collection was required REPLY TO PLAINTIFF’S OPPOSITION TO MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 4 \OWNQM-PWNi-n NNNNNNNNNr-Ir-dHr-IHHy-Ap-dy-ny-A OONmUlb‘JJNHOOOONQM#WN'-‘O within the first 12-months ofthe “attorney-client relationship,” (2) what the phrase “attorney-client relationship” means, and (3) how the tiered rates for monthly fees collected would apply. Notably, the uncommunicated subjective belief of a contracting party as to the meaning of a term is not competent evidence to prove the meaning of the contract. (Stewart Title Co. v. Herbert (1970) 6 Cal.App.3d 957, 964.) P&K submits that the terms used in the Referral Fee Provision were not truly ambiguous and, even if they were, for the reasons stated in P&K’s Motion for a New Trial, Plaintiff’s purported understandings are not plausible. P&K further submits that there was no extrinsic evidence upon which the Court may rest its interpretation, i.e., the Parties’ purported uncommunicated understandings may not be considered. (Stewart Title C0. v. Herbert, supra, 6 Cal.App.3d at p. 964.) Therefore, it falls to the Court, not the jury, to interpret the Provision. It follows that Plaintiff’s reliance on the jury’s verdict is misplaced. Even upon applying the rules of interpretation to the Provision, as Plaintiff proposes, P&K believes the Court should enter a judgment in its favor. B. THE COURT SHOULD ENTER A JUDGMENT IN FAVOR OF P&K FOR THE ADDITIONAL REASON THAT TO D0 OTHERWISE WOULD VIOLATE PROFESSIONAL RULES 0F CONDUCT, RULE 2-200. 1. The Pretrial Ruling on P&K’s Motion for Summary Judgment May Not be Considered by the Court. In the Opposition, Plaintiff asks the Court to adopt a ruling 0n a motion for summary judgment that P&K brought pre-trial. (Opposition, pp. 10:1 1-1 1 :2.) That request is improper. A denial of a summary judgment motion does not establish the merits or legal sufficiency of either party’s case, and, in fact, a trial judge may direct a verdict in favor of the moving party despite the earlier denial of summary judgment? (FLIR Systems, Inc. v. Parrish, supra, 174 Ca1.App.4th at p. 1283; see also, Weil & Brown, California Practice Guide, Civil Procedure Before Trial (The Rutter Group 201 6), Summary Judgment, 111 0:364.) It follows that the Court should independently consider the issues raised by P&K on this Motion. / / / 2 Notably, the “law ofthe case” doctrine a plies only to a decision ofan appellate court in the same case. (9 Witkin, California Procedure (5 Ed. 2016) Appeal, §460.) And an earlier ruling in the same action cannot be resjudicata. (Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758, 770.) REPLY TO PLAINTIFF’S OPPOSITION TO MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 5 \OOONONUIth 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. The Clear Language of Rule 2-200 Precludes a Fee Split With a Former Associate Without the Client’s Informed Written Consent. While P&K does not take issue with the notion that, during an association, a law firm and its employee-associate need not disclose a fee sharing arrangement to the client, for fees received by the firm afier the employment ends, Rule 2-200 is very specific: “A member shall not divide a fee for legal services with a lawyer who jg not a partner of, associate of, or shareholder with the member . . . .” (Rule 2-200(A) [bold and underscored typeface represents emphasis added].) In interpreting a statute or rule, a court begins with its language, giving the words their plain, common sense meaning. (People v. Traylor (2009) 46 Cal.4th 1205, 1212.) Ifthe language ofthe rule is not ambiguous, the plain meaning controls and resort to extrinsic sources to determine its intent is unnecessary. (Id) By its terms, Rule 2-200 addresses the point in time when the fee is divided - when it is received and, thus, payable to the law firm and the referring attorney? And the Rule provides that a member shall not divide the fee with a lawyer who “i_s” - i.e., presently - “not a partner of, associate of, or shareholder with the member.” (Rule 2-200(A) [bold and italicized typeface and underlining represent emphasis added].) If division with a former associate was permitted without the informed written consent of the client, the Rule would state it so, e.g., “A member shall not divide a fee for legal services with a lawyer who [had not been] a partner of, associate of, or shareholder with the member [when the fee split agreement was made] . . . .” The present tense requirement of association at the time of the fee division is fatal to Plaintiff’s contention that a former associate may receive a fee division so long as the referral fee agreement is entered during the association. Any other application of the Rule to the facts in this Case would be nonsensical. In this respect, under the referral fee agreement, the fee split was based on the fees billed and collected by P&K, not upon any labor, work, or service by Plaintiff. (Trial Exhibit “2.”) The jury’s verdict awarded a fee split based upon professional services by P&K that were partially worked after 3 Consistently, the Agreement provides that Plaintiff would not be entitled to receive a referral fee until such a fee is collected. (Trial Exhibit “2.”) Thus, Plaintiff had no entitlement to a fee until, at the earliest, the date P&K received the fee, on January 23, 2012, well after his employment relationship with P&K had ended. REPLY TO PLAINTIFF’S OPPOSITION TO MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 6 \DOOVONUI-PUJNH NNNNNNNNNHHb-Iu-tt-tr-nu-np-tp-nu-t WNONUI-wav-‘OOOONONUI-bWN-‘O Plaintiffwas no longer associated with it (from March 16, 201 1 through May 28, 201 1), and which were entirely billed - through an attorneys’ fees motion brought to the District Court on September 2 1 , 201 1 (see, e.g., Trial Exhibit “7”) - and collected (January 23, 2012) only after he was no longer P&K’s employee. In fact, P&K did not earn any fee to split until the District Court’s awarded it fees in the Morin Case on December 7, 201 1. (Trial Exhibit “6.”) With no entitlement to a fee split until after he was no longer associated with P&K, Rule 2-200 certainly applies. 3. Plaintiff Relies Entirely on Inapposite Authority. In Opposing P&K’s Motion, Plaintiff relies entirely on the case ofAnderson, McPharlin & Connors v. Yee, supra, for the proposition that Rule 2-200 does not apply to a former employee. (Opposition, pp. 11:7-13z23.) However, that Court did not so hold. In Anderson, the Court considered an attorney partnership agreement wherein the parties, acknowledging “that the firm had invested a substantial amount ofmoney in generating business and that the firm would lose money if [a departing partner] left and took clients with him,” agreed that a departing partner would pay the firm damages based on a percentage ofthe income received from those clients, “. . . according to a formula spelled out in the partnership agreement.” (Anderson, supra, 135 Ca1.App.4th at p. 13 1.) Fees from a client were not at issue, except tangentially. In Anderson, a partner left the firm, taking more than two dozen clients with him. (A nderson, supra, 135 Ca1.App.4th at p. 13 1 .) The departed partner challenged the partnership agreement under Rule 2-200, contending that, because the fees earned for the clients taken, and the payment of a part ofthose to the firm, would necessarily occur only after the dissociation ofthe departing partner from the partnership, division of the fees earned by the departed partner would occur only post- partnership; as a result, he argued that Rule 2-200 required the clients’ consent for the agreement, itself, to be enforceable. (Id., at pp. 13 1 , 132.) The Court disagreed; in concluding that Rule 2-200 did not apply in the circumstances ofthat case, the Court reasoned that the agreement did n_0t provide for the splitting of fees for a referral (id., at p. 134) but set forth the measure 0f damages to compensate the firm for moneys it spent to generate the business that was taken from it and which, thereafter, netted fees to the departed partner. (Id., at pp. 133-134.) Thus, the exception provided within Rule 2-200 for a partner was not pertinent to the Court’s ruling. REPLY TO PLAINTIFF’S OPPOSITION T0 MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 7 ©00NONM¥WNH NNNNNNNNNt-ap-Av-‘g-‘n-a-np-v-ln-Ir-d WVOMhWN!-‘O\OOONO\M#WNHO It follows that the Anderson case is of no moment in the analysis of the narrow issue before the Court here - whether fees billed, earned, and received, post-association, may be divided with a former associate without the client’s informed written consent and the District Court’ s approval. The Anderson case does not purport to address this issue.4 Indeed, there does not appear to be anypublished and, thus, citable legal authority addressing this issue. P&K suspects that is because, as noted hereafter, the clear language of Rule 2-200 is dispositive - the present tense used in that Rule requires the association at the time of the division ofthe fee. (Rule 2-200(A).) The evidence at trial was uncontroverted that P&K did not receive any fees for the Morin Case until January 23, 2012, long after Plaintiff” s employment ended. III. CONCLUSIONS For the reasons stated, the Court should grant the Motion and order a judgment notwithstanding the verdict for P&K. Dated: October 21, 2016 PAGANO & KASS, APC 44 flféefj IAN A. KASS, ESQ., V Attorneys for Defendant, Pagano & Kass, PC 4 See also, “Memorandum of Points and Authorities in Support of Motion for a Judgment Notwithstanding the Verdict,” at pp. 13:14-15:6. REPLY TO PLAINTIFF’S OPPOSITION TO MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 8 \OOONQKfl-fiWNp-n NNNNNNNNNh-‘t-‘v-‘b-l-Ir-‘r-tv-nr-nn-n ”NOMAWNWOOWNONM(\5:NHO Re: David Markevitch, etc., Plaintiff, v. Pagano & Kass, PC, etc., et aL, Defendants, Santa Clara County Superior Court, case no. 1-15-CV-277789 PROOF 0F SERVICE I declare under penalty of perjury that the following facts are true and correct. I am over the age of 18 years, and not a party to or interested in the within entitled action. My business address is 96 North Third Street, Suite 525, San Jose, California 951 12. On October 21, 2016, I served the following document: REPLY TO PLAINTIFF’S OPPOSITION T0 MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT on all interested parties in said cause, by serving the same documents, via facsimile transm‘l'ésion on Kevin R. Allen, Esq., at his facsimile number, (925) 334-7477. Executed on October 21, 2016, at San Jose, California. flmH:/// REPLY TO PLAINTIFF’S OPPOSITION TO MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT 9
