United Community Church v. Garcin

231 Cal. App. 3d 327, 282 Cal. Rptr. 368, 91 Cal. Daily Op. Serv. 4774, 91 Daily Journal DAR 7258, 1991 Cal. App. LEXIS 679

• Court: California Court of Appeal
• Decided: June 19, 1991
• Docket: B046856
• Status: Published

Opinions

Opinion

VOGEL, J.

Properly conceived and executed, motions for summary adjudication of issues encourage settlement, reduce trial time, save money for the parties and preserve limited judicial resources. Ill-conceived and improperly executed motions for summary adjudication have just the opposite effect— they waste time and money and, almost as certainly as night follows day, result in reversals and further litigation. This case presents a paradigm of the latter form of motion and we therefore reverse a judgment predicated on an earlier order adjudicating three issues in a legal malpractice action, finding that the issue of causation was neither summarily adjudicated nor proved at the subsequent trial.

Facts

Promising construction of a theological library, William S. McBirnie, the senior minister of United Community Church (UCC), borrowed money from two dozen individuals and signed promissory notes in his capacity as President of the Community Churches of America (CCA). He used the money for other purposes and refused to repay the loans.

Not surprisingly, the two dozen lenders sued McBirnie, CCA, UCC and several other entities for damages, an accounting, and imposition of a constructive trust, claiming McBirnie had diverted the borrowed funds to UCC and that UCC was CCA’s alter ego, formed expressly to protect McBirnie and CCA from liability on these loans. (Kendall v. Community Churches of America (Super. Ct. L.A. County, 1984, No. NCC 14282G).)

Robert W. Garcin, a partner in the law firm of Irsfeld, Irsfeld & Younger (collectively Garcin), communicated to Christ Troupis, counsel for the Kendall plaintiffs, that he was authorized to accept service on behalf of all of the Kendall defendants, including UCC. Copies of the summons and complaint were duly delivered to Garcin and Garcin, in turn, acknowledged receipt on behalf of UCC and the other defendants.

Garcin failed to respond to the Kendall complaint on behalf of any of the defendants and, at Troupis’s request, defaults were entered. A prove-up hearing was held, at which Troupis submitted evidence to prove, among other things, that UCC was the alter ego of McBirnie and CCA. The trial court entered judgment in favor of the Kendall plaintiffs and against all defendants in the amount of $1,234,045. The Kendall defendants’ subsequent motion to vacate the default judgment was denied, and their appeal from the judgment (based solely on the validity of service on Garcin) was unsuccessful. (Kendall v. McBirnie (Jan. 5, 1987) B015508 [nonpub. opn.].)

Predictably, UCC sued Garcin for damages for legal malpractice, alleging that Garcin was negligent in failing to file an answer or other responsive pleading in the Kendall action. Garcin answered, generally denying the allegations and raising affirmative defenses of comparative fault and failure to mitigate damages.

UCC moved for summary judgment or, in the alternative, summary adjudication of three issues. In the second part of the motion, UCC asked the trial court to adjudicate (1) that “the summons and complaint in the [Kendall action were] properly served upon [UCC] by service upon [Garcin], acting as its attorneys in that action;" (2) that Garcin’s action “in not filing an [a]nswer or other responsive pleading to the Kendall [c]omplaint . . . breached [Garcin’s] duty of care to [UCC], and was thereby negligent and below the standard of care;” and (3) that “as a proximate result of the actions of [Garcin] in not timely responding to the complaint in the Kendall action, default judgment in the amount of $1,234,045.00 was entered against [UCC].” (Italics added.)

In its accompanying separate statement of undisputed facts, UCC listed 12 facts to establish that UCC was sued in the Kendall action, that (with authority to do so) Garcin agreed to and did accept service on behalf of UCC, that such service was proper, that Garcin nevertheless failed to respond to the Kendall complaint, that default was thereafter requested and entered and a judgment rendered in the amount of $1,234,045 and, finally, that because Garcin failed to respond within 30 days, UCC “lost the case and its money and property was ordered to be taken without further warning from the court.”

Garcin opposed the motion, submitting substantial evidence and argument to show that even if an answer had been filed for UCC, it nevertheless would have suffered the same judgment because it had no legitimate defense to the Kendall action. Among other things, Garcin offered evidence to show that UCC was in fact the alter ego of McBirnie and CCA as found by the trial court at the default prove-up hearing in the Kendall action.

In its reply, UCC for the first time suggested that it was not the alter ego of McBirnie or CCA. In neither its moving papers nor its reply did UCC address either of Garcin’s affirmative defenses nor did it prove or even argue that, but for Garcin’s failure to respond to the Kendall complaint, it had a meritorious defense that would have resulted in a judgment against the Kendall plaintiffs and in favor of UCC.

The trial court denied the motion for summary judgment but granted the motion for summary adjudication, adjudicating all three issues as requested by UCC. Thereafter, the trial court conducted a nonjury trial on the issue of damages. Although Garcin attempted to present evidence and argue causation—that the judgment would have been entered against UCC even if an answer had been filed on its behalf—the trial court expressly and unequivocally precluded the offered evidence and argument, and entered judgment in favor of UCC in the amount of $2,106,146.68. Garcin’s motion for a new trial was denied and this appeal followed.

Discussion

Garcin contends the judgment must be reversed because the motion for summary adjudication of issues was fatally defective and should have been denied. He asserts that UCC failed to demonstrate that, as a matter of law, it would have prevailed in the Kendall action had an answer been filed on its behalf. Alternatively, Garcin asserts that if the adjudicated issues are read narrowly to leave open the question of causation, the judgment must nevertheless be reversed because the trial court refused to hear evidence on that issue. Other issues are raised, but we do not reach them because we agree with Garcin that there is no proof of causation.

A.

The Statute

At the time of UCC’s motion, former section 437c of the Code of Civil Procedure provided, in subdivision (f), that a party could move for summary adjudication of issues (SAI), either by itself or as an alternative to summary judgment.¹ Then and now, subdivision (b) requires that a motion for SAI be supported by “a separate statement setting forth plainly and concisely all material facts which the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence. The failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denial of the motion. fi[]. . . The opposition papers shall include a separate statement which responds to each of the material facts contended by the moving party to be undisputed, indicating whether the opposing party agrees or disagrees that those facts are undisputed. The statement also shall set forth plainly and concisely any other material facts which the opposing party contends are disputed. . . .”²

B.

The Pyramid Game

Outside the investment arena, “pyramid” is not a dirty word. As Judge John Zebrowski of the Los Angeles Superior Court has explained, visualization of a motion for SAI as a pyramid directs both the drafter’s and the decisionmaker’s attention to the proper analysis. (Zebrowski, The Summary Adjudication Pyramid (Nov. 1989) 12 L.A.Law. 28.) Construction starts at the top and proper design builds a structure subject to demolition only by opposition establishing a triable issue of material fact and not by a procedural glitch.

At the top is the issue the moving party wants adjudicated. To justify adjudication of the issue, the moving party must show that it is supported by undisputed facts, a showing made by way of the next step down the pyramid, the separate statement of undisputed facts. At the base of the pyramid is admissible evidence supporting the facts listed in the separate statement. Upon descending to the base of the pyramid, the moving party shifts the burden to the opponent who must then, by use of a responsive separate statement and admissible evidence, establish that there are triable issues of material fact. (Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at pp. 29-30.)

C.

The Issues

As this case demonstrates, the manner in which an issue is framed is critical. To begin with, an issue should be phrased in language appropriate for adoption by the court if the motion is granted. (See, e.g., Super. Ct., L.A. County, Law and Discovery Policy Manual, 209(a).)³ If nothing else, this avoids debate about whether the language of the order properly reflects the issue actually adjudicated.

More importantly, the issue should be clear and unambiguous and its scope should be apparent. In this regard, UCC’s first two issues are reasonably clear—that summons and complaint were properly served on UCC by service on Garcin, acting as UCC’s attorney, and that Garcin’s failure to file a responsive pleading was a breach of his duty of care to his client, a negligent act below the standard of care in the community.

The third issue—that as a proximate result of Garcin’s actions “in not timely responding to the complaint in the Kendall action,” default judgment was entered against UCC—creates the problem. At best, the statement is ambiguous and the problem is that it was construed by UCC and the trial court to include a complete adjudication of the issue of causation.⁴ In other words, instead of reading it narrowly to mean merely that the failure to respond resulted in the entry of default, the trial court read it broadly (indeed, with great generosity) to mean that the failure to respond resulted in the entry of default which, in turn, resulted in a default judgment incorporating an implied finding that, had an answer been filed, the Kendall plaintiffs would necessarily have prevailed on the merits because UCC had no defense to the action.

Proof of legal malpractice requires proof not only of negligence by the lawyer but also of causation, a trial within a trial to establish that, but for the lawyer’s negligence, the client would have prevailed in the underlying action. Although Garcin concedes he was negligent in failing to respond, that concession is merely the first step in determining whether Garcin will ultimately be liable to UCC. UCC can recover from Garcin only upon proof that, but for his negligence, UCC would not have had an adverse judgment rendered against it in the Kendall action because it had a valid defense to the claims asserted against it. (Lysick v. Walcom (1968) 258 Cal.App.2d 136,153 [65 Cal.Rptr. 406, 28 A.L.R.3d 368] [the question is one of what would have happened if the lawyer had acted otherwise].)

The question about what would have happened had Garcin acted otherwise is one of fact unless reasonable minds could not differ as to the legal effect of the evidence presented. (258 Cal.App.2d 136, 153.) Arguably, reasonable minds could not differ about the direct effect of Garcin’s failure to respond to the complaint—default was entered. But by no stretch of the imagination can it be said, based on the straight language of the issue framed by UCC, that all reasonable minds would agree that, had an answer been filed, the Kendall plaintiffs could not have prevailed against UCC.⁵ For this reason, we must turn to UCC’s separate statement of undisputed facts.

D.

Separate Statements

Separate statements are required not to satisfy a sadistic urge to torment lawyers, but rather to afford due process to opposing parties and to permit trial courts to expeditiously review complex motions for SAI and summary judgment to determine quickly and efficiently whether material facts are disputed.

Although section 437c gives the trial court discretion to grant or deny summary judgment or SAI based upon a failure to file a separate statement (§ 437c, subd. (b); Gilbertson v. Osman (1986) 185 Cal.App.3d 308, 315-316 [229 Cal.Rptr. 627]), the prevailing view is that it is only in the truly exceptional case involving a single, simple issue with minimal evidentiary support that a court will consider the merits of a motion unaccompanied by a separate statement. (Blackman v. Burrows (1987) 193 Cal.App.3d 889, 893-894 [238 Cal.Rptr. 642].) The failure to file a responsive separate statement usually results in a continuance of the motion to permit the filing of proper papers and an award of fees and costs as a condition of the continuance for purposes of complying with the statute. (§ 437c, subd. (b); LDPM, par. 207.)

As the court explained in Blackman v. Burrows, supra, 193 Cal.App.3d at pages 894-895, it is no answer to say the facts set out in the supporting evidence or memoranda of points and authorities are sufficient. “Such an argument does not aid the trial court at all since it then has to cull through often discursive argument to determine what is admitted, what is contested, and where the evidence on each side of the issue is located. . . . [][] A properly prepared separate statement, in contrast, can materially ease the trial court’s burden. While it is not required [by the statute], it is preferable that the statement be in a separately bound or filed document not physically attached to the memorandum of points and authorities. . . .[⁶] Thus, the moving party should present papers labeled, ‘Separate Statement of Undisputed Facts.’ That statement should list in numbered paragraphs without argumentation each material fact necessary to entitle the moving party to summary judgment. And, as required by subdivision (b) [of section 437c], immediately following each fact so stated there should be a reference to the supporting evidence . . . .”⁷

“A party opposing [the] motion must file a similar separate statement labeled as such. . . . [T]he opposing separate statement should list, and preferably quote each of the facts set forth in the moving papers. If the opposing party admits any of the statements set forth in the moving separate statement, the admission should be clearly listed. . . . [¶] And, just as is the case with the moving party’s separate statement, the opposing party is required by the statute, in connection with each fact which the opposing party disputes, to follow the statement of that fact by reference to the evidence which creates the dispute.”⁸ (Blackman v. Burrows, supra, 193 Cal.App.3d at pp. 895-896.)

The due process aspect of the separate statement requirement is self-evident—to inform the opposing party of the evidence to be disputed to defeat the motion. This is because the trial court is required to determine whether the facts presented, standing alone and if true, legally require a favorable ruling on the legal issue presented. (Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at p. 29.) As Judge Zebrowski explains, all material facts must be set forth in the separate statement. “This is the Golden Rule of Summary Adjudication: if it is not set forth in the separate statement, it does not exist. Both the court and the opposing party are entitled to have all the facts upon which the moving party bases its motion plainly set forth in the separate statement.” (Ibid., italics in original; see also Department of General Services v. Superior Court (1978) 85 Cal.App.3d 273, 284 [147 Cal.Rptr. 422] [“because of the drastic nature of the remedy” of summary judgment and SAI, the moving party “is held to strict compliance with the procedural requisites”].)

UCC’s separate statement falls far short of the mark. The closest fact to the causation issue is fact No. 12: “That because within 30 calendar days after the summons in [the Kendall action] was served on [Garcin, he] did not file a typewritten response at the court, [UCC] lost the case and its money and property was ordered to be taken without further warning from the court.” Aside from the fact that this is a mere conclusion and not an evidentiary fact (§ 437c, subd. (b)), it omits any reference to the merits of the underlying case and does not address causation. The purported “proof” for this “fact” similarly fails to explain what would have happened if Garcin had filed an answer in the Kendall action.⁹

To belabor the obvious, there isn’t a word about what defense, if any, UCC would have presented had Garcin filed a timely response, nor is there anything to suggest a defect in the Kendall plaintiffs’ case that would have precluded a judgment against UCC had it appeared and defended the action. We therefore do not discuss the base of the pyramid, the sufficiency of the evidence offered to support the facts presented in the separate statement. As Judge Zebrowski explains, if the facts presented in the moving party’s separate statement, even if true, do not require or permit the desired ruling, the motion will be denied without further analysis. It is only if the facts stated, if true, require the desired ruling that the court examines the sufficiency of the evidentiary support and, if it is sufficient, looks to the opposing papers to determine whether there is a triable issue of material fact. (Zebrowski, The Summary Adjudication Pyramid, supra, 12 L.A. Law. at p. 30 [“SAI Flow Chart”].)

Accordingly, it is clear that UCC’s SAI motion failed to resolve the issue of causation or anything else about the underlying Kendall action.

E.

The Burden of Proof

In opposition to UCC’s motion for SAI, Garcin wisely admitted the first eleven facts and limited the dispute to fact No. 12, in response to which he asserted that UCC was the alter ego of McBirnie and CCA and in support of which he offered evidence to prove his point. In his supporting memorandum, he explained that UCC had failed to prove that it had a valid defense to the Kendall action and argued that even if UCC had filed an answer, it would nevertheless have been found to be CCA’s alter ego and suffered the same judgment entered on default.

Finally, in its reply, UCC addressed the alter ego issue by way of supplementary declarations. By this time, however, it was too late.

On a motion for summary judgment or SAI, the burden is always on the moving party to show there is no triable issue of material fact.¹⁰ (Vesely v. Sager (1971) 5 Cal.3d 153, 169 [95 Cal.Rptr. 623, 486 P.2d 151].) When the moving party is the plaintiff, the burden is to prove every element necessary to establish its right to the relief it seeks and to disprove every affirmative defense asserted against it. Until this is done, the defendant has no burden to produce opposing evidence or to disprove anything at all. (Hayward Union etc. School Dist. v. Madrid (1965) 234 Cal.App.2d 100, 120 [44 Cal.Rptr. 268]; see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (1990) § 10:233, p. 10-52.) It is immaterial that at trial the burden to prove an affirmative defense or some other fact might be on the defendant. On a plaintiff’s motion for summary judgment or SAI, the burden is on the plaintiff, not the defendant. (Hayward Union etc. School Dist. v. Madrid, supra, 234 Cal.App.2d at p. 120.)

Accordingly, it is irrelevant that Garcin opposed UCC’s motion by presenting evidence to show that UCC would have lost even if it had responded to the Kendall complaint. By failing to meet its initial burden, UCC should have lost the motion even in the absence of any opposition at all. (Leyva v. Superior Court (1985) 164 Cal.App.3d 462, 469, 475 [210 Cal.Rptr. 545].) The fact that Garcin chose to explain to the trial court that he did indeed have an arguable defense to the malpractice action is not a reason to impose upon him a burden he did not have. (Hayward Union etc. School Dist. v. Madrid, supra, 234 Cal.App.2d at p. 120.)

F.

Trial of the Remaining Issues

If the trial court had construed the issue narrowly, simply to eliminate from the actual trial the issue whether it was the failure to file a responsive pleading that resulted in the entry of default, the problem could have been cured by permitting Garcin to try the issue of causation. Unfortunately, the trial court precluded evidence and argument on that issue, conducting a trial on damages only and omitting the trial within the trial of the underlying action. Accordingly, the issue of causation was never determined and the judgment must be reversed. (Lysick v. Walcom, supra, 258 Cal.App.2d at p. 153.)

Disposition

The judgment is reversed and remanded with directions to the trial court (1) to vacate the judgment in its entirety and (2) to vacate that portion of the order summarily adjudicating issues insofar as issue No. 3 is concerned. The first two issues were undisputed and were not challenged on appeal and shall therefore stand as summarily adjudicated. Appellants Robert W. Garcin and Irsfeld, Irsfeld & Younger are to recover their costs on appeal.

Ortega, J., concurred.

1 Subdivision (f) of section 437c was amended in 1990 (Stats. 1990, ch. 1561, § 2) to limit a motion for SAI to attacks on one or more causes of action, affirmative defenses, claims for specified damages, and to the issue whether one or more defendants owed a duty to the plaintiff. (See also Stats. 1990, ch. 1561, § 1 [“It is . . . the intent of this legislation to stop the practice of adjudication of facts or adjudication of issues that do not completely dispose of a cause of action or a defense”]; and see Lewin & Vogel, Summary Judgment’s Abused Step-Child: Motions for Summary Adjudication of Issues (Fall 1988) 2 Cal. Litigation 3.)

All section references are to the Code of Civil Procedure.

2 Although it was understood, prior to the 1990 amendment, that the separate statement requirement applied to motions for SAI as well as motions for summary judgment (see Haskell v. Carli (1987) 195 Cal.App.3d 124, 130 [240 Cal.Rptr. 439] [“motions for summary adjudication are governed by the language of subdivisions (b) and (c)”]), subdivision (f) of section 437c now expressly requires that an SAI motion “shall proceed in all procedural respects as a motion for summary judgment . ...” In the case at bench, both parties filed separate statements.

3 References to LDPM are to the Law and Discovery Policy Manual of the Los Angeles County Superior Court.

4 To be more precise, the trial court acted under a mistaken belief that UCC did not have to prove causation and that Garcin was not entitled to prove that UCC would have lost the Kendall action even if an answer had been filed. As we explain below, the trial court was wrong.

5 Although the 1990 amendment to subdivision (f) of section 437c, which if applied to this motion would require the issue to address the entire cause of action for legal malpractice, might make framing the issue easier, it does not change the separate statement requirements or the burden of proof issues discussed below.

6 See LDPM, $ 207, which requires the filing of a separate document so that it can be compared, side by side, with the responding separate statement. (See also Shadle v. City of Corona (1979) 96 Cal.App.3d 173, 177 [157 Cal.Rptr. 624] [“Local court rules and policies have the force of procedural statutes, so long as they are not contrary to legislative enactments”].)

7 See LDPM, 5 207, for the format required in Los Angeles:

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It is not a coincidence that the facts stated in the LDPM’s example are evidentiary in nature rather than conclusory. Evidentiary facts are required by subdivision (b) of section 437c and by commonsense consideration of the fact that summary judgment and SAI are substitutes for an actual trial or part thereof, thus requiring the same type of evidence required at a trial.

8 LDPM, ¶ 207, requires the opposing separate statement to quote each of the moving party’s claimed undisputed facts in the following format:

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9 Here is the “proof,” in its entirety:

“The Court File in [the Kendall action], which contains no answer or other timely responsive pleading. The court is requested to take judicial notice of this filé which is a part of its files and records.

“The Request to Enter Default in the Court File in [the Kendall action], filed August 16, 1984 with default entered on that date, a true and correct copy of which is appended hereto as Exhibit 3.

“The judgment signed in [the Kendall action] on May 13, 1985, under the signature of the Honorable Florence-Marie Cooper, a true and correct copy of which is appended hereto as Exhibit 7.

“The opinion of the Court of Appeal in [the Kendall action], a true and correct copy of which is appended hereto as Exhibit 2.” (This was the appeal that upheld service on Garcin.)

10 Weiss v. Chevron, U.S.A., Inc. (1988) 204 Cal.App.3d 1094, 1098-1099 [251 Cal.Rptr. 727], cited in the concurring opinion, post, does not address the burden of proof issue.