Legal Ethics Corner

Ethics Corner is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.

Beware the Frivolous Appeal

In the recent decision Personal Court Reporters Inc. v. Rand, et al.,___Cal.Rptr.3d___, 2012 WL 1372196, (2nd. Dist., April 20, 2012), the Court of Appeal imposed severe monetary sanctions against an attorney for filing a frivolous appeal, failing to cite to pertinent authority, and proffering boilerplate arguments in their appellate briefs.  This is the second decision in the last six months to harshly criticize a party for its questionable litigation and appeal tactics and to impose significant monetary sanctions for such conduct; this should serve as both a reminder and a warning to attorneys that just because you have the ability to file an appeal, that does not mean you should. (C.f., Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App. 4th 267.)

Personal Court Reporters Inc. involved a breach of contract claim brought by a court reporting service against defendant attorneys for non-payment of invoices.  Defendants had “protested” the amount of the court reporter’s fees and refused to pay.  Defendants filed an anti-SLAPP motion, asserting that because the bills were incurred in the course of litigation their protest and non-payment of those bills were part of “official proceedings.”  Therefore, Defendants argued, the lawsuit was designed to chill a “protected activity”, triggering the anti-SLAPP statute.

The trial court disagreed and denied defendants’ anti-SLAPP motion, concluding that Plaintiff’s claims did not arise from a “protected activity” and, therefore, Defendants had not met the threshold requirement. The Court of Appeal agreed; affirming that the nonpayment of overdue invoices in this circumstance was not a “protected activity” within the meaning of the anti-SLAPP statute.   

More importantly, however, is the Court of Appeal’s treatment of Defendants’ conduct on appeal. The Court noted the same Defendants—with the same appellate counsel—had previously filed a similar appeal asserting a nearly identical claim that had been “clearly rejected”. That prior appeal was also taken after the denial of the Defendants’ anti-SLAPP motion and involved very similar underlying facts; the non-payment of a medical lien after a settlement, which Defendants asserted was unreasonable and refused to pay. 

The Personal Court Reporters Inc. Court noted that “[d]espite the clear rejection of Rand’s position in the prior case, he presented a startlingly similar argument here.”  The Court continued: “[w]here, as here, a party appeals and merely repeats an argument that was soundly rejected by another appellate panel, we have little difficulty concluding that the party lacked good faith in pursuing the appeal.”  The Court also noted that Defendants had failed to bring the prior decision to the Court’s attention.

The Court concluded the appeal was without merit and brought solely for an improper purpose; ultimately imposing a $22,000 sanction against appellants and notifying the State Bar.

California Business and Professions Code § 6068 requires attorneys to “maintain just causes” and prohibits attorneys from seeking to mislead the court in any fashion.  (See also, Cal. Rule Prof. Conduct 5-200.)  Attorneys are well advised to thoroughly consider the arguments they make and the basis for those arguments. The penalties for failing to do so can be severe. 

– Patrick Kearns

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**