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  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
  • ROBIN KAY VS. CHARLES NETTLES et al OTHER NON EXEMPT COMPLAINTS document preview
						
                                

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Ww n LAWRENCE C. YEE (84208) DANIELLE A. LEE (223675) OFFICE OF GENERAL COUNSEL THE STATE BAR OF CALIFORNIA EEee TReNieey. 180 Howard Street FILED San Francisco, CA 94105-1639 Supertor Court of Calffornia, Tel: (415) 538-2517 Coun ft San aneee Fax: (415) 538-2321 06/23/: 2015 Danielle.lee@calbar.ca.gov By Aede Pascua: Deputy Clerk Attorneys for Defendants CHARLES NETTLES, DANIELLE A. LEE, STARR BABCOCK, THE STATE BAR OF CALIFORNIA, BOARD OF TRUSTEES OF THE STATE BAR OF CALIFORNIA (erroneously sued as BOARD OF GOVERNORS OF THE STATE BAR OF CALIFORNIA), OFFICE OF CHIEF TRIAL COUNSEL OF THE STATE BAR OF CALIFORNIA, THE STATE BAR COURT OF THE STATE BAR OF CALIFORNIA (erroneously sued as the CALIFORNIA STATE BAR COURT), JAMES E. TOWERY, DONALD STEEDMAN, LUCY ARMENDARIZ, SCOTT J. DREXEL, ALLEN BLUMENTHAL, JEFF DAL CERRO, SUSAN I. KAGAN, and ARNE WERCHECK Exempt from Filing Fees Pursuant to Government Code Section 6103 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO, ROBIN KAY, et al., Case No. CGC-14-540524 Plaintiffs, EXHIBITS LL PART 3 OF 3 TONN TO v. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF STATE BAR CHARLES NETTLES, et al., DEFENDANTS’ DEMURRER TO COMPLAINT Defendants. RESERVATION # 06190806-07 DATE: August 6, 2015 TIME: 9:30 a.m. DEPT: 302 JUDGE: Hon. Ernest L. Goldsmith Action Filed: July 14, 2014 Trial Date: TBD RJN ISO STATE BAR DEFENDANTS’ DEMURRER TO COMPLAINT Case No, CGC-14-540524EXHIBIT LL.3fears, anxiety and other emotional distress, caused by UltraStar's conduct. (BAJI No. 12.88) The trial court defined the term "emotional distress" to mean "mental distress, mental suffering or mental anguish" including "all highly unpleasant mental reactions, such as fright, nervousness, grief, anxiety, worry, mortification, shock, humiliation and indignity, as well as physical pain." (BAJI No. 12.72.) The trial court also instructed the jury that there was no standard by which to fix reasonable compensation for emotional distress, that no witnesses needed to opine as to the amount of such reasonable compensation, that the argument of counsel was not evidence of reasonable compensation, that jurors must exercise their “authority with calm and reasonable judgment" and damages must be "just and . reasonable in the light of the evidence." (BAJI No. 12.88.) The parties agreed on the instructions regarding emotional distress damages and there is no argument on appeal that the instructions were inaccurate or incomplete. Nonetheless, the trial court granted the new trial motion because the evidence Plaintiffs presented did not met the threshold for recovery in that it was not "severe, substantial and enduring." The trial court, however, did not instruct the jury that in order to be compensable, the emotional distress Plaintiffs suffered had to reach a particular threshold. Moreover, while a plaintiff subjected to sexual harassment might suffer physical manifestations of emotional distress, seek medical or psychological help or suffer a disruption of her everyday activities, there is no authority to support the trial court's apparent conclusion that such evidence is required to support an emotional distress claim. Because the trial court relied on an erroneous legal principle, that portion of the order granting UltraStar a new trial on compensatory damages is - 000169reversed and the jury's awards as to each plaintiff are reinstated. (Conner v. Southern Pacific Co., supra, 38 Cal.2d at p. 637.) (Sexual harassment is considered to be "outrageous conduct" sufficient to constitute the outrageous behavior element of a cause of action for intentional infliction of emotional distress (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 618) and an essential element of such a claim is "severe" emotional distress suffered by the plaintiff (BAJI No. 12.70), with "severe" defined as "substantial or enduring as distinguished from trivial or transitory." (BAJI No. 12.73.) Plaintiffs, however, did not plead such a claim, nor was the jury so instructed.) Although we need not reach the issue, we note that even if the trial court had used the correct standard, we cannot state as a matter of law that the evidence does not support the damages awarded. Marcisz testified that Gustafson would "brandish [a knife at her] or any other girls" and he once grabbed her arm and placed a three or four inch knife blade against her throat for about 30 seconds. Marcisz was so scared by the incident that she could not move. Gustafson waived a knife in Hora's face, used it to clean his fingernails and stab the counters. He also scared Hora by holding-a knife blade to her throat and telling her that he could kill her. Although Jessica and Blair did not have a knife placed against their throats, Jessica testified that Gustafson frightened her by playing with a knife, jabbing at the counters and pointing it at people and Blair testified that Wooten and Gustafson scared and intimidated her by pointing at things with a knife. Gustafson also subjected all Plaintiffs to “restraint holds" where he would come up behind them, grab one of their arms, twist it behind their backs, forcing them to bend over to B 000170avoid the pain and press his hips into their rear ends. Although he did not do this often to Marcisz because she yelled at him, he did it "pretty frequent[ly]" to Hora and Blair stated that Gustafson placed “all the girls" working in the theater in restraint holds. Despite knowing that Marcisz had suffered an earlier shoulder injury, Gustafson dislocated her shoulder when he placed her in a restraint hold, causing her to experience "excruciating pain," fall off her stool and cry hysterically. Her mother took her to the emergency room and she ultimately required shoulder surgery. Plaintiffs variously stated that the restraint holds were "shocking," "very scary," "terrifying," "intimidating," "embarrassing," and "humiliating." Jessica was very nervous working with Gustafson after he starting doing this and it was "really hard" to observe the other girls being treated this way. Gustafson also liked to tilt Marcisz, Jessica and Blair backwards as they sat in tall stools in the box office, threatening to drop them and forcing their bodies against his chest. He did this so frequently that Marcisz described the conduct as "a normal thing." Jessica described feeling frightened and unsafe, experiencing knots in her stomach and feeling as if Gustafson was trying to intimidate her by showing her that he had power over her and could hurt her any second. Gustafson also hit Jessica in the face three or four times with a money bag filled with money as she screamed at him to stop. Jessica went home crying after this occurrence and quit a week later because she felt unsafe knowing that Gustafson could hit her in front of Wooten and Wooten did nothing to stop the conduct. Wooten told sexual jokes to Plaintiffs, causing them to feel insulted, humiliated, embarrassed or disgusted. Gustafson bragged to Jessica and Blair that he liked to make all : 000174the girls that worked at the theater cry. Blair recalled a specific instance where Gustafson repeatedly hit another female employee in the face until she cried. Wooten and Gustafson used profanity to communicate, including such words such as “fuck," "cunt," "bitch," and “pussy." They also humiliated Marcisz by making her wear a name tag saying "ditz." Gustafson threatened to fire Marcisz if she did not wear the name tag and she was embarrassed when coworkers, customers and one of her teachers commented on the name tag. Similarly, Gustafson required Hora to wear a name tag saying “jar head." When she complained about this name tag, Wooten gave her another one saying "princess." In all, Plaintiffs suffered from frequent conduct that could be described as outrageous at best and criminal and terrorizing at worst. The jury could reasonably conclude that the individual defendants subjected Plaintiffs to this conduct, including the knife displays and restraint holds, because they were women. Compensable sexual harassment includes physical harassment (Cal. Code Regs., tit. 2, § 7287.6, subd. (b)(1)(B)) and the trial court cited no evidence to support its conclusion that Marcisz's shoulder injury and the emotional distress resulting from the knife displays were not compensable or that the jury reached the damage awards based on passion or prejudice. Although reasonable minds could certainly differ on the propriety of the compensatory damage awards, the record does not support the trial court's conclusion that different compensatory damages awards "clearly" should have been reached. (Code Civ. Proc., § 657.) » 000172B. Punitive Damages 1. Principles Regarding Punitive Damage Awards The purpose of a punitive damages award is to punish the defendant and deter the commission of similar acts. (Civ. Code, § 3294, subd. (a); Neal v. Farmers Ins, Exchange (1978) 21 Cal.3d 910, 928, fn. 13 (Neal).) Under California law, three factors are considered in reviewing whether a punitive damages award is excessive: (1) the reprehensibility of the defendant's conduct; (2) the injury suffered by the victims; and (3)the wealth of the defendant. (Neal at pp. 928-929.) "Because the important question is whether the punitive damages will have the deterrent effect without being excessive, an award that is reasonable in light of the first two factors ... may nevertheless 'be so disproportionate to the defendant's ability to pay that the award is excessive' for that reason alone. [Citation.]" (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 620.) The plaintiff bears the burden of producing "meaningful evidence" of a defendant's financial condition as a prerequisite for awarding punitive damages. (Adams v. Murakami (1991) 54 Cal.3d 105, 109, 123.) Ability to pay is the critical factor and “evidence of liabilities should accompany evidence of assets, and evidence of expenses should accompany evidence of income." (Baxter v, Peterson (2007) 150 Cal.App.4th 673, 680.) Ability to pay is usually proved by net worth, but a jury may consider other factors (Zaxis Wireless Communications, Inc. v. Motor Sound Corp. (2001) 89 Cal.App.4th 577, 583) and the ‘relevant time period for accessing the defendant's financial condition is the time of trial, not the time of the injury. (Dumas v. Stocker (1989) 213 Cal.App.3d 1262, 1267.) 16 000173Under California law, a trial court can grant a new trial motion on the ground of excessive damages (Code Civ. Proc., § 657) and it reviews a motion challenging the excessiveness of a punitive damages award similar to other motions for new trial. (Boeken v. Philip Morris Inc. (2005) 127 Cal.App.4th 1640, 1689; supra, section II, A, 1.) A punitive damage award can also be challenged on federal due process grounds as being constitutionally excessive, an issue that appellate courts determine independently. (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1187.) 2. Analysis As a preliminary matter, we reject Plaintiffs' assertion that the trial court based its tuling solely on constitutional excessiveness grounds and not on their failure to prove UltraStar's financial condition. The trial court found that the punitive damage awards were excessive in light of the evidence presented at trial, noting that the awards raised constitutional concerns and there was no special justification for the high ratios or "definitive evidence" of UltraStar's net worth and that the jury might have acted to punish UltraStar for changing its corporate structure and filing for bankruptcy. The trial court's statement that the awards were excessive in light of the evidence presented at trial was, in effect, a finding that the evidence of UltraStar's financial condition was insufficient to support the awards. (See Dell'Oca v. Bank of New York Trust Co., N.A., supra, 159 Cal.App.4th at p. 549.) We also reject Plaintiffs' contention that UltraStar waived any argument regarding the insufficiency of the financial condition evidence when it did not respond to their valid discovery requests because this contention is not supported by any references to the record showing that UltraStar failed to respond to a valid court order to produce financial records. (Compare, 7 000174Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, 608-609 ["by failing to bring in any records which would reflect his financial condition, despite being ordered to do so, and by failing to challenge that ruling on appeal, defendant has waived any right to complain of the lack of such evidence"].) Turning to the trial court's rulings under state law, we conclude that the trial court did not abuse its discretion in granting a new trial on the ground that the punitive damages awards were excessive based on the evidence presented at trial. Plaintiffs' point out that UltraStar generated yearly revenues of over $20 million dollars over the five years prior to trial, but ignore other evidence regarding UltraStar's . overall financial condition. Roberta Jean Spoon, a certified public accountant, reviewed the financial statements for UltraStar for a four-year period, bank statements from January 2004 to February 2005, income tax returns for four years, the financial ledgers for each of the nine theaters for 2004 and a business evaluation conducted in November 2004. Spoon did a gross profit analysis and concluded that from 2000 to the end of November 2004, UltraStar's nine theaters generated $87.7 million in revenue and had a gross profit of about $50 million, but that was only one-half of the equation. ‘She explained that the other half of the equation was the cost to operate the company and that operating expenses of the company were larger than its gross profits. Spoon testified that the business posted a net loss of income each year, but that it was able to stay in business and still post a loss because some of its expenses were noncash expenses. As of the November 2004 appraisal, the company had a negative net worth of about $300,000. 7 000175Spoon also reviewed the February 2005 sale of asset documents from Movie Theatre Entertainment Group, Inc. dba UltraStar Cinemas to UltraStar Cinemas, Inc. She could not come to a conclusion as to the current value of UltraStar based on the documents she reviewed because she did not review any documents after the sale. Spoon had no conclusion regarding the financial condition of UltraStar and did not expect the jury to come to any conclusion. Based on this evidence, the $6 million punitive damages total far exceeded UltraStar’s ability to pay and the jury clearly should have reached a different verdict. (Code Civ. Proc., § 657.) Accordingly, the trial court did not abuse it discretion when it granted a new trial on the ground that the punitive damages awards were excessive. This conclusion moots Plaintiffs remaining arguments regarding the propriety of the punitive damages awards under federal constitutional law. Ul. Evidentiary Issues Plaintiffs contend that the trial court made numerous evidentiary errors during trial that resulted in a prejudicially incomplete record in deciding UltraStar's new trial motion, that the erroneous rulings should be reversed and the matter remanded for a new trial with instructions regarding the admission of certain evidence. To the extent Plaintiffs' arguments pertain to evidence relevant to the jury's liability findings and the compensatory damages awards, they are moot. Assuming, without deciding, that the trial court prejudicially adinitted or excluded certain evidence at trial so as to render the record incomplete on the punitive damages issue, the proper result would be to retry this issue, something that will already be done. We decline to provide an advisory opinion on these evidentiary matters. 19 000176DISPOSITION That portion of the new trial order granting a new trial on the amount of compensatory damages is reversed and the original compensatory damage awards are reinstated. That portion of the new trial order granting a new trial on punitive damages is affirmed and the matter is remanded for a new trial on punitive damages. Plaintiffs are ing entitled to their costs on appeal. NTYRE, J. WE CONCUR: Lrnbt- BENKE, Acting P.J. A Lig ora HOFFMAN, I. 20 000177EXHIBIT 10 000178Westlaw. Page 1 Not Reported in Cal.Rptr.3d, 2008 WL 4411656 (Cal.App. 4 Dist.) Nonpublished/Noncitable (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115) (Cite as: 2008 WL 4411656 (Cal.App. 4 Dist.)) Pp Only the Westlaw citation is currently available. California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts. Court of Appeal, Fourth District, Division 1, California. Dianne GOBER et al., Plaintiffs and Appellants, v. RALPHS GROCERY COMPANY, Defendant and Respondent. No. D0S0962. (Super.Ct.No. N72142). Sept. 30, 2008. APPEAL from an order of the Superior Court of San Diego County, Jacqueline M. Stern, Judge. Affirmed. 8 A. Bird, Luce, Forward, Hamilton & Scripps, San Diego, CA, John W. Dalton, Law Office of John W. Dalton, Solana Beach, CA, Philip Edward Kay, Law Offices Of Philip Edward Kay, Sanford Jay Rosen, Rosen, Bien & Galvan, LLP, San Francisco, CA, for Plaintiffs and Appellants. Karen M. Bray, Daniel J, Gonzalez Horvitz & Levy, Encino, CA, Helene Joy Wasserman, Littler Mendelson, Los Angeles, CA, for Defendant and Respondent. McINTYRE, J. *1 In 1996, Terrill Finton, Dianne Gober, Sarah Lang, Talma (Peggy) Noland, Suzanne Papiro and Tina Swann (collectively Plaintiffs) sued their employer, Ralphs Grocery Company (Ralphs), for sexual harassment. In their first appeal, we affirmed compensatory damages awards in their favor, but remanded the matter for a new trial on punitive damages. After a second jury awarded Plaintiffs substantial punitive damages, we reduced the award as constitutionally excessive and remanded the matter for entry of judgment. The trial court entered judgment and granted Plaintiffs' motion for an award of attomey fees. In this appeal, Plaintiffs contend the trial court erred in deciding their attorney fees motion when it declined to award a multiplier and failed to issue a statement of decision. We reject their contentions and affirm the order. FACTUAL AND PROCEDURAL BACKGROUND We incorporate by reference our prior opinion in Gober v. Ralphs Grocery Co. (2006) 137 Cal. App 4th 204 (Gober I). Accordingly, as the parties are fully familiar with the facts and procedural background as set forth in Gober II, we will not repeat them. On remand from Gober II, Plaintiffs (among other things) moved for an award of attorney fees for over ten years of litigation. They sought $6,945,916 as the lodestar amount for work performed on the merits of the case and $373,244.50 for work performed toward the recovery of fees (fees for fees). They also requested a 2.0 multiplier for the merits work, a 1.5 multiplier for the fees for fees work and that 2006 billing rates be used to calculate the award. Plaintiffs argued that the lodestar amount for merits work should be doubled based on case complexity, the excellent result obtained, counsel's inability to work on other cases and the fact they had little assurance of winning at the outset of the litigation. They pointed out the numerous factual issues they needed to prove to establish Raiphs's liability for compensatory and punitive damages. They also asserted that a 1.5 multiplier should apply to their fees for fees request because the history of the litigation was extensive and much of the work connected with the fee application was performed before they were assured of prevailing party status. In opposition to the motion, Ralphs did not contest Plaintiffs' right to an attorney fee award. Rather, it argued that the hourly rates Plaintiffs sought exceeded San Diego market rates, the amount of time worked was unreasonable, and that the requested multipliers should be denied. In summary, Ralphs argued that Plaintiffs’ suggested lodestar amount be reduced by $2,722,628.53. © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. 000179Page 2 Not Reported in Cal.Rptr.3d, 2008 WL 4411656 (Cal.App. 4 Dist.) Nonpublished/Noncitable (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115) (Cite as: 2008 WL 4411656 (Cal.App. 4 Dist.)) In a three-page tentative ruling, the trial court indicated that it had “carefully reviewed” all declarations submitted in connection with the motion. In determining the lodestar, the trial court awarded the 2006 fee rates requested by Plaintiffs’ counsel for all work performed since 1996 even though Plaintiffs had failed to submit evidence that the rates were reasonable for San Diego. It also reduced the number of hours requested and calculated the lodestar amount at $6,759,249.77 for merits work and $279,933.38 for fees work. *2 After considering all relevant factors, the trial court declined to allow any enhancements to the lodestar amounts. The trial court noted that the case was not “particularly novel or extraordinarily difficult,” the skill displayed by Plaintiffs' counsel had been taken into account in determining the lodestar, Plaintiffs‘ counsel had not demonstrated that the case has such an impact on their practices that they could not maintain their client base, and the contingent nature of the litigation did not justify enhancement “due to the fact the above lodestar figures fully compensate the attorneys for undertaking representation of Plaintiffs ‘at the risk of nonpayment or delayed payment, in an amount approaching the market rate for comparable legal services,’ “ The trial court also awarded interest on the fees award from the date of the judgment and declined to issue a statement of decision. After hearing oral argument and taking the matter under submission, the trial court affirmed its tentative ruling. Thereafter, Plaintiffs sought and obtained, a supplemental award of $444,248.77 for further fees for fees work. Plaintiffs appealed after Ralphs paid all the attorney fees and costs awarded. DISCUSSION 1, Legal Principles and Standard of Review In awarding attorney fees, the trial court must first establish a lodestar figure, calculated by multiplying the time spent by a reasonable hourly rate for private attorneys in the community conducting noncontingent litigation of the same type. ( Ketchum y. Moses (2001) 24 Cal.4th 1122, 1133 (Ketchum ).) After determining the lodestar figure, the trial court may exercise its discretion to increase or decrease the figure based on any number of factors, typically including: (1) the novelty and difficulty of the questions involved and the skill displayed in presenting them; (2) the extent to which the nature of the litigation precluded other employment by the attorneys; and (3) the contingent nature of the fee award, based on the uncertainty of prevailing on the merits or on the fee claim. ( Thayer v. Wells Fargo Bank (2001) 92 Cal.App Ath 819, 834.) Normally, a contingent fee is higher than a non-contingent fee because a contingent fee compensates the lawyer for the legal services rendered and for the loan of those services. ( Ketchum, supra, 24 Cal Ath at pp. 1132-1133.) The interest rate on that “loan” must be higher than on a conventional loan since a loss of the case will cancel the client's debt to the attomey. (/bid.) The trial court, however, is “not required” to enhance the basic lodestar figure and party secking the enhancement bears the burden of proof. (/d. at p. 1138, italics in original.) Additionally, to the extent the trial court has already considered such factors as attorney skill or contingent risk within the lodestar, these factors should not be considered when determining any appropriate enhancement. (Jd. at pp. *3 The trial judge is in the best position to evaluate the professional services rendered at trial and the amount of attorney fees to award is a matter within its sound discretion. ( PLCM Group, Inc. y. Drexler (2000) 22 Cal.4th 1084, 1095-1096.) We will not disturb that determination unless convinced that the trial court's judgment is clearly wrong. (/d. at p. 1095.) IL. Analysis A. Waiver Ralphs argues that Plaintiffs waived their right to challenge the lack ofa multiplier by accepting payment of the amounts awarded because their challenge to the lack of a multiplier necessarily implicated the lodestar determination. Plaintiffs assert their appeal from that part of the order denying any enhancement to the lodestar amounts is severable and that they merely accepted the lodestar amounts, a benefit of the order that was indisputably owed. Ralphs has the better argument. Asa general rule, a party who voluntarily accepts the benefits of a judgment or order may not appeal from the © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. 000180Page 3 Not Reported in Cal.Rptr.3d, 2008 WL 4411656 (Cal.App. 4 Dist.) Nonpublished/Noncitable (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115) (Cite as: 2008 WL 4411656 (Cal.App. 4 Dist.)) judgment or order because the two acts “are wholly inconsistent, and an election to take one is a renunciation of the other. [Citations.]” ( Afativs v. Turner (1956) 46 Cal.2d 364, 365.) An exception to the general rule “exists where the appellant is concededly entitled to the benefits which are accepted and a reversal will not affect the right to those benefits. [Citations.]” ([bid.) Here, the trial court stated that the contingent nature of the litigation did not justify enhancement because the lodestar amounts fully compensated the attorneys for undertaking Plaintiffs’ representation at the risk of nonpayment. Should we decide that the trial court erred in taking the contingent nature of the litigation into consideration when calculating the lodestar amounts and that contingent risk had to be compensated by means of a multiplier, the entire fee award would need to be reversed because the trial court would need to recalculate the lodestar amounts without considering contingent risk. Nevertheless, we decline to dismiss the appeal on this basis because Plaintiffs’ arguments lack merit. B. Compensation for Contingent Risk As a threshold matter, we reject Plaintifis' assertion that we should conduct a de novo review of the trial court's findings because the trial court failed to apply the proper principles of law in exercising its discretion and the facts relevant to this appeal are undisputed. Nothing about the fee motion was undisputed except for Plaintiffs’ right to recover attorney fees. Rather, Ralphs contested the hourly rates (taking into consideration the function, skills and expertise of each timekeeper), the amount of time worked (including time expended on unsuccessful issues and alleged duplicative work and excessive conferencing) and the requested multipliers. Additionally, as discussed below, the trial court applied the proper principles of law in exercising its discretion. Plaintiffs assert that the trial court erred by refusing to apply a multiplier because the use of multipliers for contingent risk is mandated. Simply put, Plaintiffs are wrong. ( Ketchum, supra, 24 Cal.4th at p. 1138 [“the trial court is not required to include a fee enhancement to the basic lodestar figure for contingent risk”); accord, Nichols v. City of Taft (2007) 155 Cal. App. Ath 1233, 1240-1241; Horsford_v. Board of Trustees of California State University (2005) 132 Cal.App 4th 359, 395: Greene v. Dillingham Construction, Ine. (2002) 101 Cal. App. 4th 418, 426-427. *4 Plaintiffs concede that the substantial lodestar amounts compensated counsel for delayed payment, their skill, the difficulty, duration and intensity of the litigation and the preclusion of other employment. They assert, however, that the trial court did not compensate counsel for contingent risk. The trial court, however, retained discretion on the use of a multiplier; thus, any refusal to award a multiplier is not error absent a showing that the trial court abused its discretion. In any event, the trial court here did not refuse to consider contingent risk or state that counsel was not entitled to an adjustment for contingent risk; rather, it stated that the lodestar amounts “fully compensate[d] the attorneys ... ‘at the risk of nonpayment or delayed payment...’ “ A fair reading of this order indicates that the trial court took the contingent nature of the litigation into consideration when it set the lodestar amounts. ( Horsford v. Board of Trustees _of California State University, supra, 132 Cal.App Ath at p. 395 [The contingency adjustment may be made at the lodestar phase of the court's calculation or by applying a multiplier to the noncontingency lodestar calculation (but not both)”].) Thus, the question is whether the trial court abused its discretion when it determined that the lodestar amounts adequately compensated counsel for contingent risk. We conclude that the court's decision on this matter was well within the ambit of its discretion based on the nature and extent of the contingency. While it is beyond dispute that Plaintiffs’ counsel incurred contingent risk when they took this case, that risk erided in August 2000 when the California Supreme Court denied their petition for review of our decision upholding the jury's finding of liability for compensatory and punitive damages. Thereafter, the only uncertain issue was the amount of punitive dama; On this issue, the trial court could consider Plaintiffs’ limited success after four of the Plaintiffs refused to consent to a punitive damage award equal to 15 times their compensatory damage recovery in July 2002. ( Sekolow v. County of San Mateo (1989) 213 Cal.App.3d 231, 248 [degree of success must © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. 000181Page 4 Not Reported in Cal .Rptr.3d, 2008 WL 4411656 (Cal.App. 4 Dist.) Nonpublished/Noncitable (Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115) (Cite as: 2008 WL 4411656 (Cal.App. 4 Dist.)) considered in determining amount of award].) By this comment we do not imply that the work of Plaintiffs’ counsel after July 2002 was unnecessary or unreasonable. We simply note that the decision of four Plaintiffs to decline a punitive damage award equal to 15 times their compensatory damage recovery appears to have been a turning point in the litigation that the trial court may have taken into consideration in deciding whether to enhance the fees awarded to compensate Plaintiffs‘ counsel for their work, Moreover, the trial court awarded the 2006 rates requested for all timekeepers despite its finding that Plaintiffs failed to demonstrate the reasonableness of the rates. The award of high 2006 rates more than adequately compensated Plaintiffs’ counsel for any delay in payment and it was within reason for the trial court to conclude that the award also adequately compensated counsel for the risk they undertook in prosecuting this litigation. *5 Finally, we reject Plaintiffs’ contention that because a fee award is discretionary (Gov.Code: § 12965, subd. (b)), it was uncertain whether the trial court would award them any fees. This assertion ignores case law establishing that a plaintiff prevailing in an anti-discrimination action “ ‘should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust.’ “ ( Christiansburg Garment Cov. E.£.O.C. (1978) 434 U.S. 412, 416-417. quoting Newman uv. Piegie Park Enterprises (1968) 390 U.S. 406, 402; accord, Stephens v. Coldwell Banker Commercial Group, Inc, (1988) 199 Cal.App.3d_1394, 1405, overruled on other grounds in White v. Ultramar, Inc. (1999) 21 Cal.4th 563,574, fn. 4. In summary, the trial court acted within its discretion in setting the fee award in this case after considering all proper factors. C. Statement of Decision Plaintiffs argue that they timely requesteda statement of decision and the trial court erred by failing to make findings on all contested facts. They assert we should “require” that trial courts issue written orders with findings when making attorney fee awards and that if a party has requested findings, the trial court must issue them regardless of whether the technical requirement for a statement of decision applies under Code of Civil Procedure section 632. Code of Civil Procedure section 632 governs statements of decision and “[c]ases decided under [this section] generally have held that a statement of decision is not required upon decision of a motion.” ( Maria P. v. Riles 1987) 43 Cal.3d 1281, 1294 [statement of decision not required on motion for attorney fees]; Ketchum, supra, 24 Cal.4th at p. 1140 [“The superior court was not required to issue a statement of decision with regard to the fee award”); Jn re Marriage of Feldman (2007) 153 Cal.App.4th 1470, 1497[“[W]e find no basis in statute or case law for a rule requiring the trial court to exercise its discretion to issue a statement of decision in instances where Code of Civil Procedure section 632 does not require it”].) Since a statement of decision was not required, the trial court did not err by failing to issue one and we decline to create a new rule of law requiring a statement of decision when deciding attorney fee motions, In any event, Plaintiffs have failed to explain why the written order issued by the trial court was inadequate to provide for meaningful appellate review as it touched upon the controverted issues noted by Plaintiffs in their request for a statement of decision. D. Judicial Notice Ralphs requests that we take judicial notice of various documents from prior appeals and a related appeal that is currently pending. The request is denied because Ralphs has not shown that the documents are relevant to the resolution of this appeal. ( Mangini v. RJ. Reynolds Tobacco Co. (1994) 7 Cal. 4th 1057, 1063 [only relevant matters may be judicially noticed], overruled on another point in Ja re Tobaceo Cases 1! (2007) 4) Cal. Ath 1257, 127 DISPOSITION *6 The order is affirmed. Ralphs is entitled to its costs on appeal, Plaintiffs shall bear their own attorney fees on this appeal. WE CONCUR: HUFFMAN, Acting P.J., and McDONALD, J. © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. 000182Page 5 Not Reported in Cal.Rptr.3d, 2008 WL 4411656 (Cal.App. 4 Dist.) Nonpublished/Noncitable (Cal, Rules of Court, Rules 8.1105 and 8.1110, 8.1115) (Cite as: 2008 WL 4411656 (Cal. App. 4 Dist)) Cal.App. 4 Dist.,2008. Gober v. Ralphs Grocery Co. Not Reported in Cal.Rptr.3d, 2008 WL 4411656 (Cal.App. 4 Dist.) END OF DOCUMENT © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. 000183EXHIBIT 11 000184O02 YD nH Bw HY we o Philip E. Kay 736 43" Avenue FILED San Francisco, California 94121 (415)387-6622 (415)387-6722 (fax) [In pro per] JUN 18 201 STATE BAR COURT CLERK'S OFFICE SAN FRANCISCO THE STATE BAR COURT HEARING DEPARTMENT - SAN FRANCISCO In the matter of ) Case No. 11-O-11364 ) PHILIP EDWARD KAY ) RESPONDENT PHILIP E. KAY’S ) RESPONSE, MOTION TO DISMISS ) AND/OR ABATE NOTICE OF ) DISCIPLINARY CHARGES In the Matter of Kay Response, Motion Dismiss 000185co OP IY Dw BR WwW WD INTRODUCTION Pursuant to Rules 5.43, 5.50 and 5.124 of the State Bar Rules of Procedure (SBRP), respondent Philip E. Kay (Kay) responds and moves to dismiss and/or abate the Notice of Disciplinary Charges (NDC). The NDC seeks to compel compliance with the probation provisions of the Order of Suspension, which is void ab intio and unenforceable. Therefore, compliance with the void Order of the Suspension cannot be compelled in the State Bar venue or any article VI court, which is why the State Bar has not sought to enter and enforce the void Order of Suspension as a judgment in the Superior Court and/or move for an order of contempt, pursuant to Rule of Court (CRC) 9.20 and State Bar Act (Act)! - §6086.10. The void Order of Suspension is subject to collateral attack, requiring dismissal of the NDC with prejudice. (See In re Pyle, 3 Cal. State Bar Ct. Rptr. 929 (1998).) In the alternative, there is a pending related Superior Court action, which was filed prior to the NDC. (See Ex. 1, Verified Complaint, San Francisco Superior Court case no. CGC-11-510717.) The Complaint seeks declaratory and injunctive relief, pursuant to in Canatella v. State Bar of California, 304 Fed.3d 843 (9th Cir. 2002), against the void Order of Suspension. The NDC should be abated until that proceeding is final. Morever, Kay has an order from the San Diego Superior Court that he is not required to comply with the void Order of Suspension. (See Ex. 2, Order tentative ruling’ granting motion to withdraw as counsel in Marcisz v. UltraStar Cinemas, San Diego Superior Court, case no, GIC 820896, which states: “The California State Bar Decision, as published on its website, indicates the decision is “pending.” Accordingly, it appears Kay has not yet been officially ordered to comply with CRC 9.20(a).” The State Bar seeks to “have its cake and eat it too,” by claiming it can enforce the Order of Suspension, when it knows that it is void and cannot be entered as a judgment or enforced in the Superior Court, pursuant to CRC 9.20 and §6068.10 . ' Section references are to the Act - Bus. & Prof. Code §§6000, et seq. ’ The tentative ruling granting the Motion Withdraw as Counsel was adopted as the order of the court. In the Matter of Kay 1 Response, Motion Dismiss 000186Only Orders or Judgments, which Can be Enforced, Are Valid Under the Law Since the State Bar and its counsel have stated that they do not want to enter the judgment in the only court [Superior Court], which can enforce the order and/or judgement, they have admitted the Order of Suspension has no legal effect. (See Armstrong v. Armstrong (1976) 15 Cal.3d 942, 950 [Collateral attack is proper to contest [a judgment void on its face for] lack of personal or subject matter jurisdiction or the granting of relief which the court has no power to grant [citation omitted].") It has long been held that no court has the authority to validate a void order. (U.S. v. Throckmorton, 98 U.S. 61 (1878); Valley v. Northern Fire & Marine Co., 254 USS. 348, 353-354 (1920). If the underlying order is void, the judgment based on it is also void. (Austin v. Smith, 312 Fed. 2d 337, 343 (1962).) The State Bar wants to shield the void order from review, while at the same time using it as a sword against Kay in this proceeding, in which constitutional - due process rights and privileges will again be denied and the record and law will have no meaning. However, until the order is submitted to the Superior Court, [an actual article VI trial court, which is the only court with original jurisdiction to enter and enforce the order] for the determination, this proceeding should be dismissed and/or abated. RELEVANT FACTS The Superior Court Complaint (see Ex. 1), which is incorporated herein in response to the NDC, establishes the original jurisdiction of the Superior Court, pursuant to Canatella, supra, 304 Fed.3d 843, for the claims for declaratory and injunctive relief and damages, which requires abatement of this proceeding, based on the clear intent of the State Bar to violate Kay’s constitutional - due process rights and privileges. Incredibly, this proceeding has been assigned to the very administrative hearing judge [Hon. Lucy Armendariz], who orchestrated this denial of constitutional rights and abuse of process. (See Ex. 3, Motion to Disqualify Hearing Department Judge Lucy Armendariz Under Rule 5.46 of the State Bar Rules of Procedure and Verified Statement, which is incorporated herein in response to the NDC.) The trial in the Hearing Department before Judge Armendariz started mn March 2009. Kay appeared and testified for eleven days. During his testimony, as required by §6068(e)(1) and Response, Motion Dismiss In the Matter of Kay 2 000187Cm IY DA HW Rw 10 Rule of Professional Conduct (RPC) 3-100(A), Kay objected to repeated questioning about his clients’ communications and litigation actions on attorney-client and work-product grounds. Although none of his clients had ever complained against Kay or otherwise waived these privileges, Judge Armendariz demanded that Kay waive the privileges and, when Kay refused, illegally admitted the unanswered questions into evidence as admissions of culpability. (BAJI 1,02; Wegner et al., Civil Trials & Evidence (Rutter 2009), §8:202 et seq.) Since a refusal to comply with a trial subpoena is contempt (Code Civ. Proc. §1991), Kay requested Judge Armendariz comply with §§6049, 6050 and 6051 and former SBRP 152(b) and 187, and pursue contempt proceedings in the Superior Court, where the article VI court would be required under Jacobs v. State Bar (1977) 20 Cal.3d 191 to review the validity of her rulings on his objections. “The State Bar accordingly urges us to hold that the superior court's jurisdiction is limited to cases in which enforcement of subpoenas is sought.” (Jacobs, at 196.) “Section 6051, upon which Jacobs primarily relies, clearly seems restricted to contempt proceedings initiated by the State Bar to enforce compliance with its subpoenas.” (id, at 197.) “we construe the use of the word “shal!” as directory in this context, for certainly the Legislature did not intend to foreclose the State Bar or local committee from exercising its discretion in determining whether or not to enforce a subpoena.” (/d., at 197.) “we hold that, unless and until the State Bar seeks to enforce its subpoena, superior courts have no jurisdiction to review the validity thereof.” (/d,, at 198.) (Emphasis.) The State Bar both acknowledged and requested this legal holding in its petition for review to the Supreme Court in the Jacobs case. In its petition to the Supreme Court in Jacobs, the State Bar argued: While the State Bar is under a duty to report contempt of its subpoenas to the appropriate superior court pursuant to section 6051, State Bar subpoenas may be issued at the request of respondent attorneys as well as State Bar examiners or staff attorneys. (Petition, pg. 2, It is evident from this original language of the State Bar Act that the Legislature did not intend the State Bar to have power to enforce its own subpoenas. Instead, the Legislature intended that the contempt powers of the superior courts be used to enforce State Bar subpoenas and limited the State Bar's role to reporting the fact of contempt of a State Bar subpoena to the appropriate superior court. (/d., 14.) (Emphasis.) In the Matter of Kay 3 Response, Motion Dismiss 000188SOM IY AH B® wD RB RPP PNR NN YB Be ewe we EB Ser ryavrserR Bn eKH SE ewe UF ARTHAS (See Ex. 4, State Bar Verified - Petition for Review, Appellate Brief, and Request for Modification in Jacobs v. State Bar, supra, executed by former OCTC prosecutor and State Bar Court judge Ronald Stovitz.) Jacobs affords the State Bar two options: (1) refer enforcement of the subpoena to the Superior Court or (2) waive enforcement. There is no third option allowing issuance of terminating sanctions by default. State Bar administrative hearing judges have no authority or power to enforce subpoenas or to cite (charge), adjudicate, and/or sanction respondents and litigants appearing before them for contempt. (Former SBRP 152(b) and 187; §§6049, 6050 & 6051; Jacobs, supra; Matter of Lapin (Rev.Dept. 1993) 2 Cal. State Bar Ct.Rptr. 279, 295.) Regardless, the State Bar Court judge [Armendariz] claimed non-existent judicial “inherent” authority and constitutional contempt powers to enforce the subpoena by entering an illegal void default, with Kay’s Answer on file and having appeared personally and through counsel, in compliance with former SBRP 201, and testified at trial. (See Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 863 ["Where a defendant has filed an answer, neither the clerk nor the court has the power to enter a default based upon the defendant's failure to appear at trial, and a default entered after the answer has been filed is void"]; Wilson v. Goldman (1969) 274 Cal.App.2d 573, 576-578 [where answer filed, default order based on failure to appear at trial is “void on its face” and thus subject to direct or collateral attack at any time]. (See also Matter of Frazier (Rev.Dept. 1991) 1 Cal. State Bar Ct.Rptr. 676, 697; In re Pyle, supra, 3 Cal. State Bar Ct. Rptr. 929.) Instead of the constitutional - due process to be afforded in the Superior Court, ultra vires terminating sanctions were entered against Kay, denying him a trial on the merits, de novo appeal and a considered written opinion, as required by In re Rose, 22 Cal.4th 430, 439, 456-458 (2000). This seminal arrogation of subject matter jurisdiction is the lynch-pin to the unlawful taking of Kay’s property interest in his professional license and assessment of a criminal fine. (See Neblett v, State Bar (1941) 17 Cal.2d 77, 81 ["the right to practice law is a valuable one which should not be taken away or cancelled under circumstances that have even the slightest tendency to suggest any possible unfairness or disadvantage"); Findley v. State Bar of California, 59 Fed.3d 248 (2010) [State Bar costs In the Matter of Kay 4 Response, Motion Dismiss 000189have been determined to be a criminal fine (punishment) and non-dischargeable in bankruptcy].) Instead of providing this constitutional - due process, on May 11, 2009, claiming a non-existent "inherent" authority to control the proceeding, and despite Kay's filed answer and active appearance at trial, Judge Armendariz granted the State Bar's improper oral motion (see former SBRP 200, 201) and in violation of §6088 [the only permitted circumstances in which to enter a default] to enter Kay's "default," deeming the NDC charges admitted, and precluding Kay from participating further in the proceedings. On June 17, Judge Armendariz denied Kay's motion for reconsideration, rejecting his entitlement under §§6051and 6088 to purge himself of the sanction because his representations that he had recanted and would testify were not under oath, which Kay immediately cured to no avail. Additionally, although her May 11 - Default Order [see Ex. 5] had explicitly declined to strike Kay's answer (rendering the default fatally defective), Judge Armendariz, without notice, struck Kay's answer sua sponte. Based solely on the wltra vires - void default, Judge Armendariz issued a Decision (Ex. 6), which found all the unproven charges true, while denying Kay an opportunity to contest the charges (except, ironically, the incompetent representation charges), found the State Bar had proved all its charges by clear and convincing evidence, and recommended suspending Kay for five years, with three years actual suspension and five years probation. Kay timely petitioned the Review Department for review of the Decision. (Former SBRP 301.) Because Kay's default had been entered, the Review Department [clerk] rejected and returned the petition. Thus, without a trial on the merits in the Hearing Department or de novo review in the Review Department, [which the Supreme Court held in Jn re Rose, supra, 22 Cal.4th at 457 was essential to providing constitutional - due process in the State Bar], the void Decision was filed on February 17, 2010, as the Bar’s recommendation to the Supreme Court. The Supreme Court then summarily denied Kay’s Petition for Review. However, the summary denial of the petition does not render the void Decision In the Matter of Kay 5 Response, Motion Dismiss 000190CD me YN DUH Bw Hw valid.’ The central finding in the Decision found Kay guilty of the no longer existent common law crime of “obstruction of justice” - depriving the Gober and Marcisz defendants of a fair trial. California outlawed the use of “common-law” crimes in 1872, when it adopted the Penal Code. Obstruction of justice has to be prosecuted and pled through statutory law - not common-law terms of art. Moreover, the Bar cannot allege statutory violations for obstruction of justice, because the required elements [e.g., violation ofa valid order] don’t exist. (See In the Matter af Mapps (1990) 1 Cal. State Bar Ct. Rptr. 19, 24 [an attorney cannot be disciplined for uncharged Penal Code violations].) This ultra vires finding is irreconcilable with the only final orders and judgments in those cases, which rejected defendants' charges of attorney misconduct. Both cannot be true. In fact, the former is true; whereas, the latter is a lie about the former. In other words, lying about the record does not make it so. The Falsification of the Article VI Court Record in the Decision None of this fabricated misconduct actually occurred. If it had, the trial and/or appellate courts would have reversed the approximate $40 million in verdicts based on misconduct in new trial orders, pursuant to Code Civ. Proc. §657(1). (See e.g., Ex. 7, Order Granting Defendant Bae Systems San Francisco Ship Repair, Inc’s Motion for New Trial, San Francisco Superior Court case no. CGC-09-488061, which is replete with the required record cites by the trial court documenting the existence of attorney misconduct.) Contrary to the State Bar’s trumpeted “big lie” - no such orders exist. Contrary to the Decision, no court, including those in the underlying cases for which Kay* was found 2 US. v. Throckmorton, supra, 98 U.S. 61 (1878); Valley v. Northern Fire & Marine Co., 254 USS. at 353-354; Austin v. Smith, supra, 312 Fed. 2d at 343.) ‘ Kay has practiced law in California for almost 30 years, spending most of his career fighting for and vindicating the workplace rights of women, minorities and whistleblowers, acting as lead counsel in civil rights cases resulting in the largest non-class action sexual harassment verdicts in the nation and the four largest California sexual harassment verdicts, including Weeks v. Bake