Judge: Robert B. Broadbelt, Case: 22TRCV00054, Date: 2023-09-08 Tentative Ruling

Case Number: 22TRCV00054    Hearing Date: March 27, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Defendants Paul William Blake, Jr., and Armando Zenteno

RESPONDING PARTY:        Plaintiff Martin B. Canter

Motion for Summary Judgment

The court considered the moving and reply papers filed in connection with this motion.

The court did not consider the “Objection to the Defendant’s Entire Motion for Summary Judgment, and for the Judicial Notice be be [sic] Denied,” filed by plaintiff Martin B. Canter on March 12, 2024, because (1) the proofs of service attached thereto are incomplete since they do not (i) sufficiently describe which documents were served on counsel for the moving defendants, and (ii) state the email address to which service was made, and (2) the moving defendants have asserted that they were not served with the opposition papers filed with the court.  (Pl. Obj./Opp., pp. 19, 31, 46, 67 [proofs of service]; Def. Obj. fns. 1-5 [“Defense counsel never received anything from [plaintiff Martin B.] Canter”].)

EVIDENTIARY OBJECTIONS 

The court declines to rule on defendants Paul William Blake, Jr., and Armando Zenteno’s evidentiary objections to the evidence submitted by plaintiff Martin B. Canter, filed on March 22, 2024, because the objections are directed to evidence that is not material to the court’s disposition of this motion.  (Code Civ. Proc., § 437c, subd. (q).)

REQUEST FOR JUDICIAL NOTICE

The court grants defendants Paul William Blake, Jr., and Armando Zenteno’s request for judicial notice.  (Evid. Code, § 452, subd. (d).)

LEGAL STANDARD

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)  “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.”  (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)  A defendant or cross-defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.”  (Code Civ. Proc., § 437c, subd. (p)(2).)  “Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.”  (Code Civ. Proc., § 437c, subd. (p)(2).)  “If the plaintiff cannot do so, summary judgment should be granted.”  (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)  “When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.”  (Id. at p. 467; Code Civ. Proc., § 437c, subd. (c).)

DISCUSSION

Defendants Paul William Blake, Jr. (“Blake”) and Armando Zenteno (collectively, “Defendants”) move the court for an order granting summary judgment in their favor and against plaintiff Martin B. Canter (“Plaintiff”).  Plaintiff has alleged, in his First Amended Complaint, two causes of action against Defendants for (1) fraud, and (2) malpractice.[1]

Defendants contend that they are entitled to summary judgment because (1) the actual innocence rule bars Plaintiff from recovering any damages in this action; (2) Plaintiff has admitted that he cannot prove causation and damages; and (3) the unclean hands defense bars this action.

1.     Actual Innocence Rule

The court finds that Defendants have not met their burden of showing that the first and second causes of action for fraud and legal malpractice, respectively, have no merit because Defendants have not shown that the actual innocence rule bars both causes of action.

“In any action for legal malpractice against criminal defense counsel, the plaintiff, as the former criminal defendant, must necessarily allege and prove actual innocence of the criminal charges.”  (Genis v. Schainbaum (2021) 66 Cal.App.5th 1007, 1015; Wiley v. County of San Diego (1998) 19 Cal.4th 532, 534 [actual innocence is a necessary element of a cause of action for legal malpractice when alleged by a former criminal defendant].)  However, “[w]hen the primary rights asserted in the complaint are the rights to be billed in accordance with specific contractual provisions and to be free from unethical or fraudulent billing practices on the part of defense counsel, . . . a criminal defendant client need not allege actual innocence in order to state a cause of action for breach of contract, breach of fiduciary duty, fraud and money had and received.”  (Bird, Marella, Boxer & Wolpert v. Superior Court (2003) 106 Cal.App.4th 419, 421.)

Here, Plaintiff’s action is based, in part, on his claims that defendant Blake engaged in improper and fraudulent billing.  (FAC ¶¶ 1 [seeking, inter alia, “remuneration for . . . fraudulent bill-ing practices”], 14 [on December 30, 2019, Plaintiff was billed for 3.5 hours for reviewing documents but Blake “later admitted and it was proven that he reviewed nothing”], 15 [taking issue with other bills, including a one-hour bond discussion that “Never happened”], 18-19 [questioning whether certain bills were padded].)  Because Plaintiff has alleged claims asserting improper and fraudulent billing practices, the actual innocence rule does not apply to his entire action.  (Ibid.; Bird, Marella, Boxer & Wolpert, supra, 106 Cal.App.4th at pp. 421, 432.)

Thus, the court finds that Defendants have not met their burden to show that the actual innocence rule applies to and bars both of Plaintiff’s causes of action.  (Notice of Mot., p. 2:7-10 [moving for summary judgment on the ground that “the actual innocence rule . . . bars [Plaintiff] . . . from recovering any damages in this action”] [emphasis added]; Mot., p. 11:5-8 [Plaintiff’s “entire action fails because his claims against Defendants arise out of the Underlying Criminal Matter” and therefore he must plead and prove his actual innocence] [emphasis added].)

2.     Elements of Causation and Damages

The court finds that Defendants have not met their burden of showing that the first and second causes of action for fraud and legal malpractice, respectively, have no merit because they have not shown that the elements of causation and damages cannot be established.  (Not. of Mot., p. 2:7-9, 10-11 [moving for summary judgment on the ground that Plaintiff has “admitted [his] inability to prove causation and damages”] [emphasis in original omitted].)

First, although Defendants have moved for summary judgment on the ground that both of Plaintiff’s causes of action fail due to Plaintiff’s “admitted inability to prove causation and damages[,]” Defendants did not, in their moving papers, clearly set forth argument contending that Plaintiff cannot establish those elements in connection with his claims for legal malpractice.  (Not. of Mot., p. 2:7-9, 10-11 [internal emphasis omitted]; Mot., pp. 13:25-17:9 [arguing that Plaintiff cannot prove causation and damages under the motion heading “Canter’s Purported Fraud Cause of Action Fails”] [emphasis in original omitted], 14:8-9 [Plaintiff lacks evidence to prove fraud], 16:15 [stating that Plaintiff’s “fraud claim fails” because he cannot assert tort-based disgorgement of fees], 16:18 [Plaintiff’s “fraud cause of action also fails because he cannot prove causation”], 17:8-9 [Plaintiff cannot prove fraud].)

The court notes that, in one statement made by Defendants under their heading “Canter’s Purported Fraud Cause of Action Fails,” Defendants have asserted that Plaintiff cannot assert damages caused by Defendants’ alleged overbilling “for the legal malpractice or fraud causes of action” in the First Amended Complaint.  (Mot., p. 15:4-6.)  This appears to be the only argument regarding the elements of either causation or damages that refers to the legal malpractice cause of action.  However, the court finds that this argument is insufficient to show that Plaintiff cannot prove damages in connection with his legal malpractice and fraud causes of action because (1) although the court recognizes that, in some circumstances, “an overpayment for services is contract damages[,]” (2) Plaintiff has not merely alleged overpayment, but has instead alleged the existence of “fraudulent bill-ing practices,” including by alleging that Plaintiff was charged for services not rendered.  (Herrington v. Superior Court (2003) 107 Cal.App.4th 1052, 1060; FAC ¶¶ 1, 10 [“An arraignment charge 1 hour, stated met with me for 2 hours”], 14 [“On 12/30/2019 a billing of 3.5 hours for ‘reviewing’ documents and discovery of materials, documents and reports submitted by the Plaintiff that [Blake] later admitted and it was proven that he reviewed nothing”].)  Thus, the court finds that this argument does not show that Plaintiff cannot establish the element of damages in connection with his fraud and legal malpractice causes of action as a matter of law.

Second, the court notes that Defendants have presented other arguments that they contend show that Plaintiff cannot establish the elements of causation or damages in connection with Plaintiff’s cause of action for fraud.  However, Defendants did not move for summary adjudication on the fraud cause of action in the alternative, and the court therefore does not rule on whether Defendants have met their burden to show that Plaintiff cannot establish those elements as to the fraud cause of action.  (Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 244 [“‘[I]t is improper to grant summary adjudication absent a motion therefor’”] [internal citations omitted].)

3.     Defense of Unclean Hands

The court finds that Defendants have not met their burden of showing that the first and second causes of action for fraud and legal malpractice, respectively, have no merit because they have not shown that the defense of unclean hands bars Plaintiff’s action.

“The defense of unclean hands does not apply in every instance where the plaintiff has committed some misconduct in connection with the matter in controversy, but applies only where it would be inequitable to grant the plaintiff any relief.  [Citations.]  The court must consider both the degree of harm caused by the plaintiff’s misconduct and the extent of the plaintiff’s alleged damages.  [Citations.]  Whether the defense applies in particular circumstances depends on the analogous case law, the nature of the misconduct, and the relationship of the misconduct to the claimed injuries.  [Citations.]”  (Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 446-447 [internal citations omitted].)  

In their moving papers, Defendants have not identified any misconduct committed by Plaintiff (1) in connection with the matter in controversy in this action, and (2) that was directed to Defendants. 

“To deny relief to a party under the unclean hands doctrine, the improper conduct must be ‘in the particular transaction or connected with the subject matter of the litigation that is a defense.’”  (Brown v. Grimes (2011) 192 Cal.App.4th 265, 282 [internal citation omitted].)  “‘If he [the wrongdoer] is not guilty of inequitable conduct toward the defendant in that transaction, his hands are “as clean as the court can require.” ’”  (Id. at p. 283 [internal citation omitted].)  Here, Defendants contend that Plaintiff is barred from recovering damages against them in this action “because his alleged damages arise out of his illegal conduct in defrauding the U.S. Government.”  (Mot., p. 17:11-12.)  The court disagrees.

First, although the court recognizes that Defendants have produced evidence establishing that Plaintiff pleaded guilty to one count of “Conspiracy to Pay and Receive Illegal Remunerations for Health Care Referrals in violation of 18 U.S.C. § 371[,]” Defendants have not shown that this misconduct was (1) committed “‘in the particular transaction’” alleged in the First Amended Complaint, or (2) “‘connected with the subject matter of the litigation that is a defense.’”  (Brown, supra, 192 Cal.App.4th at p. 282;  Def. Compendium of Exhibits, RJN Ex. 5, p. 1 [Judgment and Probation / Commitment Order].)  Plaintiff’s misconduct in the underlying criminal action is not connected with his pending claims against Defendants for their alleged malpractice and perpetuation of a fraudulent billing scheme.

Second, Defendants have not shown that Plaintiff was “guilty of inequitable conduct toward [Defendants] in” the underlying criminal action.  (Brown, supra, 192 Cal.App.4th at p. 283 [emphasis added].)  Instead, Defendants base their uncleans hands argument on Plaintiff’s acts in “defrauding the U.S. Government.”  (Mot., p. 17:11-23.)  Thus, as to this action, Plaintiff’s “‘hands are “as clean as the court can require.” ’”  (Brown, supra, 192 Cal.App.4th at p. 283.)

The court therefore finds that Defendants have not met their burden to show that the unclean hands defense bars Plaintiff’s action against them.

4.     Conclusion

For the reasons set forth above, the court finds that Defendants have not met their burden to show that (1) the actual innocence rule bars Plaintiff’s entire action; (2) Plaintiff cannot prove the elements of causation and damages in connection with both his legal malpractice and fraud causes of action; and (3) the unclean hands defense bars Plaintiff’s entire action.

The court therefore denies Defendants’ motion for summary judgment.

ORDER

            The court denies defendants Paul William Blake, Jr., and Armando Zenteno’s motion for summary judgment on plaintiff Martin B. Canter’s First Amended Complaint.

The court orders plaintiff Martin B. Canter to give notice of this ruling.

IT IS SO ORDERED.

DATED:  March 27, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court