[00:00:00] Speaker 01:
May I reserve five minutes for a bubble?

[00:00:02] Speaker 00:
Keep your eye on the clock.

[00:00:03] Speaker 00:
We'll try to help you.

[00:00:04] Speaker 00:
Thank you.

[00:00:05] Speaker 01:
May it please the court?

[00:00:06] Speaker 01:
Bill Boyce on behalf of Appellant Roach.

[00:00:09] Speaker 01:
Fred Trader induced Roach to invest in RBS based on the promise that there would be a 50% financial interest to be realized when RBS was sold.

[00:00:21] Speaker 00:
Let me ask you this.

[00:00:24] Speaker 00:
You're a lawyer.

[00:00:25] Speaker 00:
I'm sure a very skilled lawyer.

[00:00:26] Speaker 00:
Your client is a lawyer.

[00:00:29] Speaker 00:
I don't know what the rules are in Texas, but in California, rule 3-300 is very strict.

[00:00:37] Speaker 00:
If you're a lawyer and you're going to do business with a client, you've got to put it in writing, you've got to advise them that they can see another lawyer before, and then it's got to be fair, and if there's any problem, the burden is on the lawyer.

[00:00:56] Speaker 00:
I understand your client's position, he loans some money, the other guy says he will lend it back, but there is no writing.

[00:01:03] Speaker 00:
So how can we overturn what the district judge did here?

[00:01:07] Speaker 00:
The burden of proof is on you.

[00:01:08] Speaker 00:
Do you agree?

[00:01:10] Speaker 01:
The answer to your question, Judge, is that summary judgment is not

[00:01:15] Speaker 01:
appropriate in these circumstances because of multiple disputed fact issues.

[00:01:20] Speaker 01:
There are three disputed fact issues.

[00:01:22] Speaker 01:
Number one, whether Roach represented Sellers simultaneously while claiming an interest in Sellers.

[00:01:30] Speaker 01:
That's a question of who is the client and what is the timing of that.

[00:01:35] Speaker 01:
There are also questions of fact that preclude summary judgment with respect to whether the arrangement was fair

[00:01:43] Speaker 01:
whether there was any advantage taken and whether there was a breach of fiduciary duty.

[00:01:48] Speaker 01:
But may I set the stage a little bit?

[00:01:50] Speaker 01:
Because I think if you work your way through the district court summary judgment order, what you'll see is a very long chronology.

[00:01:59] Speaker 01:
at the beginning of it.

[00:02:00] Speaker 01:
And what it does is we at least have some bookends.

[00:02:04] Speaker 01:
We know that the RBS agreement, which was between Roach and Fred, arose in 2001.

[00:02:11] Speaker 01:
We know that any provision of attorney services ended in 2016.

[00:02:16] Speaker 01:
Those are our bookends.

[00:02:18] Speaker 01:
Between those bookends, what you see in the record are fact issues about who was represented when.

[00:02:27] Speaker 01:
And this is

[00:02:28] Speaker 01:
This is where some extra precision is very much needed, because the district court's opinion refers interchangeably to Fred and to Sellers and to RBS.

[00:02:44] Speaker 00:
The district court found that when you look at the total time period, including the time when your client received extra cases of wine and so on, and partial repayment of the loan and so on,

[00:02:57] Speaker 00:
How do we deal with that?

[00:02:58] Speaker 00:
I mean, basically, from the court's perspective, lower court, the book end, whichever client it is, they're both involved during that time period.

[00:03:07] Speaker 00:
Do you disagree with that?

[00:03:08] Speaker 01:
There are different involvements at different time periods, and the different time periods are crucial, and the different time periods give rise to the fact issues.

[00:03:17] Speaker 01:
Because here is the two important takeaways that I'd zero in on.

[00:03:23] Speaker 01:
Number one, it is undisputed that RBS is separate from sellers.

[00:03:30] Speaker 01:
Number two,

[00:03:32] Speaker 01:
Roach did not make any pleading or allegation or contention of having an interest in sellers until 2021.

[00:03:41] Speaker 04:
Council, I want to make sure I understand part of your position.

[00:03:46] Speaker 01:
Yes, sir.

[00:03:47] Speaker 04:
If we were to disagree with you about the representation issue,

[00:03:51] Speaker 04:
It's still your position, is it not, that there are still triable issues of fact as to whether the alleged oral agreement was fair, whether there was undue influence, whose idea it was, and whether or not your client had suggested that he have Pharrell look at the documents.

[00:04:12] Speaker 04:
Your view is even if we were to disagree with you on who is representing

[00:04:17] Speaker 04:
who, when, there are still triable issues that should not have been decided on summary judgment.

[00:04:22] Speaker 04:
Is that right?

[00:04:23] Speaker 01:
That is correct, Judge Bennett, and there are multiple issues with respect to fairness and with respect to whether there was undue influence.

[00:04:31] Speaker 01:
You've highlighted a couple of them.

[00:04:32] Speaker 04:
So I want to, just to make sure we cover this, I want to pivot to a completely separate issue, which is the jury instruction.

[00:04:41] Speaker 04:
Yes, sir.

[00:04:44] Speaker 04:
It strikes me, and I'll talk to your friend about this, it strikes me that at least some of their allegations of their claim are clearly barred by the litigation privilege.

[00:04:57] Speaker 04:
But I'm having trouble understanding the exact instruction the magistrate judge gave, that is, if the gravamen of the complaint

[00:05:11] Speaker 04:
is from the Texas litigation then.

[00:05:15] Speaker 04:
Why would that be a proper instruction as opposed to simply telling the jury that there is a litigation privilege if these elements are met and in order to rule for the other side, they have to find a breach totally exclusive of that and damages totally exclusive of that.

[00:05:36] Speaker 04:
Why does the gravamen of the complaint

[00:05:40] Speaker 01:
Well, I think maybe an answer to your question, Judge Bennett, is to go to the description that opposing counsel told the jury, which was, and I'm paraphrasing here,

[00:05:54] Speaker 01:
In essence, if the California suit, if you believe we filed it, if it was retaliatory, then that's what that is going to.

[00:06:08] Speaker 02:
Mr. Boyce, the intent may or may not be an element, but isn't the scope of that privilege a question of law that the judge should have framed first?

[00:06:21] Speaker 01:
the Gravaman language attempts to do that.

[00:06:24] Speaker 01:
And this is really an amalgam of two different things.

[00:06:28] Speaker 01:
And maybe that makes it a little more challenging than an ordinary jury instruction.

[00:06:33] Speaker 01:
But this encompasses both the statutory California privilege and the separate Noor-Pennington doctrine to preclude it.

[00:06:42] Speaker 01:
One's immunity, one's privilege, it doesn't affect the fact that

[00:06:46] Speaker 01:
that those protections preclude the breach of fiduciary duty claim that Sellers was attempting to bring.

[00:06:53] Speaker 00:
Following up on my colleague's question, whether it's a California privilege or a North Pennington arguably anti-SLAPP language, why is this a question for the jury?

[00:07:08] Speaker 00:
This is a legal question, is it not?

[00:07:10] Speaker 00:
Why was the jury involved at all in that issue?

[00:07:14] Speaker 01:
Well, in the post-trial order and post-trial motions, the district court explained the basis for a fact finding here because .

[00:07:24] Speaker 00:
.

[00:07:24] Speaker 00:
.

[00:07:24] Speaker 00:
Say we disagree totally with the district judge about that.

[00:07:27] Speaker 00:
Just as a lawyer, why would the issue of the gravamen of the complaint be an issue for the jury?

[00:07:37] Speaker 00:
You only look at pleadings and things like that.

[00:07:39] Speaker 00:
that would be the judge's decision, not the jury's decision.

[00:07:42] Speaker 00:
They don't know anything about what the problem under the complaint is, do they?

[00:07:45] Speaker 01:
I think that the dispute that was appropriately to be submitted to the jury, we believed it was privileged as a matter of law, but the court

[00:07:57] Speaker 01:
submitted it to the jury, the notion was that there was a fact issue about the basis for the suit.

[00:08:04] Speaker 01:
Sellers took the position.

[00:08:05] Speaker 01:
Roach is making statements about ownership rights and sellers clouding our title, impacting our trademarks, things like that.

[00:08:18] Speaker 01:
And that's why we filed it.

[00:08:21] Speaker 01:
We had evidence that it was done.

[00:08:25] Speaker 01:
in a retaliatory fashion because of the first file Texas suit, which is still pending in Houston in Harris County.

[00:08:32] Speaker 00:
That's stayed pending the outcome of this litigation, correct?

[00:08:36] Speaker 01:
Correct.

[00:08:37] Speaker 01:
There's a trial setting on October 15th in the Harris County action.

[00:08:41] Speaker 01:
Most recently,

[00:08:42] Speaker 01:
the Harris County trial judge has abated it, not released the trial setting, but abated further arguing in that court till we see what the Ninth Circuit does.

[00:08:53] Speaker 00:
Can you tell me please, the Texas action, I've glanced at the pleading, but what is the claim in the Texas action?

[00:09:01] Speaker 01:
So the Texas action is Roach versus Constellation and Fred.

[00:09:08] Speaker 01:
individually.

[00:09:09] Speaker 01:
Sellers is not part of the Texas litigation.

[00:09:13] Speaker 01:
Although Sellers was invited to intervene and it declined to do so, instead it goes here and files the separate lawsuit.

[00:09:23] Speaker 00:
I'm sorry, say again.

[00:09:24] Speaker 00:
Fred's subject to the jurisdiction of the Texas court.

[00:09:27] Speaker 01:
He is for certain claims.

[00:09:28] Speaker 01:
There's been an appellate battle going on in Texas over personal jurisdiction.

[00:09:35] Speaker 00:
And the bottom line is that... Was he ever in Texas?

[00:09:40] Speaker 01:
Was he in Texas?

[00:09:41] Speaker 01:
Yes.

[00:09:41] Speaker 01:
So the appellate result in Texas state court is that there is personal jurisdiction over Fred with respect to fraud claims.

[00:09:49] Speaker 01:
and there's appellate jurisdiction with respect to constellation over certain claims so they're still alive case in texas

[00:09:56] Speaker 01:
Fred and Constellation are still in it.

[00:10:00] Speaker 00:
Okay, now you're down to five minutes, 10 seconds, up to you.

[00:10:02] Speaker 00:
You can keep going or save your time for rebuttal, whatever you like, counsel.

[00:10:07] Speaker 01:
I would, pending any further questions from the panel, I'd like to have one more.

[00:10:11] Speaker 04:
Yes, one more question, sorry to add into your rebuttal time.

[00:10:14] Speaker 04:
Yes, sir.

[00:10:15] Speaker 04:
Correct me if I'm wrong, but you have not cross-appealed from the decision not to grant summary judgment with regard to the litigation privilege.

[00:10:27] Speaker 01:
We are appealing to uphold, advocating to the court to uphold the jury's verdict.

[00:10:36] Speaker 04:
The jury's verdict, but you haven't cross-appealed and said we should have gotten summary judgment.

[00:10:42] Speaker 04:
The judge erred in doing that.

[00:10:44] Speaker 01:
That is correct.

[00:10:45] Speaker 01:
What we're asking the court to do is to conclude.

[00:10:49] Speaker 01:
I guess whether it's characterized as a matter of law or a matter of fact, we prevail either way that the litigation privilege applies and it precludes seller's breach of fiduciary duty claims.

[00:11:01] Speaker 04:
All right.

[00:11:01] Speaker 04:
So you think your brief, and I'm not suggesting it hasn't, but you believe your brief would allow us to uphold the jury's verdict even if we found the instruction was wrong if the claim is a matter of law were barred by the litigation privilege?

[00:11:16] Speaker 04:
That is correct.

[00:11:17] Speaker 04:
All right.

[00:11:17] Speaker 04:
Thank you.

[00:11:18] Speaker 04:
Very well.

[00:11:19] Speaker 04:
Mr. Law.

[00:11:27] Speaker 03:
May it please the court?

[00:11:29] Speaker 03:
Where you're from, where I'm from, it's a privilege to be an attorney.

[00:11:33] Speaker 03:
It's a privilege to be here, but it's also a great responsibility.

[00:11:36] Speaker 03:
When you're an attorney, you always put your client's interests ahead of your own, and you always know that you're responsible for making sure both of you follow the law.

[00:11:44] Speaker 03:
And even in this case,

[00:11:46] Speaker 03:
At this level, Roach still refuses to abide by those responsibilities, still refuses to acknowledge that he was bound by 3300 to his clients.

[00:11:56] Speaker 03:
which he has pled and said in his testimony the entire time that he represented Fred Schrader.

[00:12:03] Speaker 03:
Part of the deal that he had with Fred Schrader was for his legal representation of Schrader sellers, yet he didn't get it in writing.

[00:12:10] Speaker 03:
He didn't do the three things you have to do.

[00:12:12] Speaker 00:
Counsel, let me ask you this.

[00:12:14] Speaker 00:
I, of course, am familiar with 3-300, and I know what the district court ruled.

[00:12:19] Speaker 00:
Your opposing learned counsel says that that's all well and good, but the district judge took some factual issues that are essential to deciding the result of the application of Rule 3-300, and that those really are material issues of fact that should be decided by the trier of fact, in this case the jury.

[00:12:47] Speaker 00:
What's your answer to that?

[00:12:49] Speaker 03:
I don't see how, with the undisputed facts that were in the record at that time, the undisputed fact that a material term of the deal was that Roach would provide legal representation to the Schrader sellers.

[00:13:01] Speaker 03:
And the discussion of 3300 makes clear that even if you're not previously representing a client, when you start representing them and it's part of a deal, you must follow 3300.

[00:13:11] Speaker 03:
There is no disputed material fact.

[00:13:13] Speaker 03:
Roach should not follow 3-300.

[00:13:15] Speaker 00:
So, I'm sorry.

[00:13:16] Speaker 00:
No, no.

[00:13:17] Speaker 00:
From your perspective, then, there are enough undisputed facts that Section 3-300 is undisputably made out, nothing further needed to be said, because it's an admitted fact that the elements of 3-300 are satisfied.

[00:13:36] Speaker 00:
Is that correct?

[00:13:37] Speaker 04:
That's correct, Your Honor.

[00:13:39] Speaker 04:
We said 30 years ago, and I can't now put my finger on the case, but that 3300 or its translation into the probate code is not an automatic voider.

[00:13:54] Speaker 04:
Isn't that correct that it establishes a presumption which can be overcome by evidence?

[00:14:01] Speaker 03:
In N. Ray Kirsch, Your Honor, this court did observe that any section of CPRC, including 3300, might not itself establish liability.

[00:14:11] Speaker 03:
But the California Supreme Court in 2018 and the Shepard Mullins case made clear that when you violate 3300 or similar provisions, that renders the contract unenforceable.

[00:14:23] Speaker 04:
I read the cases as saying that there is still a test.

[00:14:28] Speaker 04:
Are you saying that the California Supreme Court has said that the language in the probate code 16004, which says that this is a presumption affecting the burden of proof, that there are no facts that can overcome it, and so it's really an irrefutable presumption?

[00:14:53] Speaker 03:
It is related to Roach's attempts to enforce his unethical agreement, so what was decided at the summary judgment.

[00:15:00] Speaker 03:
As far as it goes to the fiduciary duty breach, which is established by 16004, Roach then has the burden to prove

[00:15:07] Speaker 03:
that the terms were fair and reasonable and fully disclosed to his client.

[00:15:11] Speaker 04:
So would you agree and I know you don't agree that the facts show this even in the light most favorable to Roach but would you agree that if the facts in the light most favorable to Roach showed that the terms were fair and reasonable that Fred understood them

[00:15:29] Speaker 04:
and that Fred knew he could have Forello look to come up with an agreement and that he in fact defrauded Roach pursuant to the terms of the alleged oral agreement that if those were facts which in the light most favorable to Roach that we could find them or a jury could find them.

[00:15:50] Speaker 04:
Would it be your view that still that doesn't overcome the presumption?

[00:15:54] Speaker 03:
Well, first, Your Honor, I don't agree with that those facts were presented as described or no, I'm giving you a hypothetical.

[00:16:01] Speaker 03:
If the terms of the agreement were so clearly and the Kersh case is a good case to explain how that happens.

[00:16:10] Speaker 03:
In that instance, the clients admitted they knew what the terms of the deal were.

[00:16:14] Speaker 03:
There's been no such admission by Mr. Schrader.

[00:16:16] Speaker 04:
But we're looking at the facts in the light most favorable to Roach.

[00:16:19] Speaker 04:
So would you agree totally as a hypothetical that if the facts as I laid out in the light most favorable to Roach that a jury could find all those facts, would you agree that that would overcome the presumption hypothetically?

[00:16:32] Speaker 03:
I don't, Your Honor, and the reason why I don't is because I believe that even in that hypothetical, there's not full disclosure of the terms of the agreement.

[00:16:42] Speaker 03:
There may be questions of fairness, but the actual disclosure in this case is definitely uncontested.

[00:16:50] Speaker 00:
As I understand your position on this in response to my colleague, they never pled that.

[00:16:59] Speaker 00:
They never pled that he was told to consult another lawyer.

[00:17:02] Speaker 00:
They never pled that this was fair and just.

[00:17:05] Speaker 00:
And you have to establish those elements.

[00:17:07] Speaker 00:
So those aspects are not materially in dispute.

[00:17:11] Speaker 00:
And without each of those being found, you can find the contract voidable.

[00:17:16] Speaker 00:
Is that your position?

[00:17:17] Speaker 03:
Absolutely, Judge Smith.

[00:17:18] Speaker 03:
And that's also what the district court observed on summary judgment is.

[00:17:22] Speaker 04:
Why would you have to plead it, counsel?

[00:17:24] Speaker 04:
Why wouldn't you just have to plead you have a contract?

[00:17:27] Speaker 04:
I have an oral contract, and here are the terms.

[00:17:30] Speaker 04:
And then in response to your motion that under the statute, under the professional responsibility code and the probate code, this is voidable and void, why wouldn't you just be able, at summary judgment, to allege those facts?

[00:17:44] Speaker 04:
Why would you have to plead as an element

[00:17:46] Speaker 04:
of your oral contract, all of these things, as opposed to just pleading what the terms were and that there was consideration, et cetera, and then deal with the rest of it in affidavits and depositions.

[00:17:59] Speaker 03:
Perhaps it's maybe how Roach pled deaths in 70, 80 pages or basically pled himself out of court.

[00:18:05] Speaker 03:
He pled that he didn't disclose the terms by virtue of everything he lays out in that extensive set of counterclaims.

[00:18:12] Speaker 03:
That's the problem.

[00:18:13] Speaker 03:
But the bigger problem is when it got to summary judgment, there's no doubt it would have been his burden to prove fairness and disclosure.

[00:18:20] Speaker 03:
And the trial court observed that he didn't even try.

[00:18:24] Speaker 03:
summary judgment to come forward with evidence.

[00:18:26] Speaker 04:
Well, I saw the trial court saying that.

[00:18:28] Speaker 04:
I don't understand that, because I'm looking at his declaration.

[00:18:32] Speaker 04:
I'm looking at the various depositions.

[00:18:38] Speaker 04:
And it certainly seems to me that whether it meets the burden or not, that there is evidence that this was fair.

[00:18:46] Speaker 04:
There's evidence that things were disclosed.

[00:18:48] Speaker 04:
And there was evidence, at least in the light most favorable,

[00:18:51] Speaker 04:
to Roach that Fred tried to defraud him but knew everything that was going on.

[00:18:57] Speaker 04:
So, I mean, I didn't really understand the magistrate judge's determination that he didn't even try because I'm looking at all this evidence.

[00:19:07] Speaker 03:
Well, Your Honor, maybe it is a distinct between Fred and Schrader Sellers, but how in the world could this agreement have been fair to Schrader Sellers?

[00:19:15] Speaker 03:
Granted, he wrote them a check, two checks for $135,000, and then claims they're not part of the deal when it serves his interests.

[00:19:23] Speaker 03:
but they paid them back with interest.

[00:19:25] Speaker 03:
But Schrader Sellers' RBS was always made, produced, sold, all the taxes paid, everything by Schrader Sellers.

[00:19:32] Speaker 03:
And for him to come back 16 years later and say he owned that wine is not fair to Schrader Sellers.

[00:19:38] Speaker 03:
He's claiming to have been in the position of a equity holder at the same time he is a loner.

[00:19:44] Speaker 03:
In other words, had Schrader Sellers went belly up back then, he would have been a creditor.

[00:19:48] Speaker 03:
But no, because he got paid back with interest in a check that said final payment loan

[00:19:52] Speaker 03:
Now, all of a sudden, he gets a piece of the action just because he says so.

[00:19:57] Speaker 03:
All that evidence you're talking about, Your Honor, is from his mouth, but that's what 3300 is designed to prevent, because attorneys are very good at knowing how to prove their case, especially if they can control the evidence themselves.

[00:20:10] Speaker 03:
We're relying on a guy who can tell you what happened in 2001 with perfect knowledge, but it also seems to change when it serves his interest.

[00:20:22] Speaker 00:
In the evidence that my colleague referred to, is there anywhere where Mr. Roach claimed to have told Fred or Sellers that they should consult or could consult with another lawyer to review the fairness of the deal?

[00:20:36] Speaker 03:
Absolutely not.

[00:20:37] Speaker 00:
I didn't see that either.

[00:20:38] Speaker 00:
So if that's true, and he didn't tell them that, then notwithstanding all the material issues of fact, he loses, right, under 3300?

[00:20:48] Speaker 03:
Absolutely.

[00:20:48] Speaker 03:
And it's worse than that, Judge Smith.

[00:20:51] Speaker 03:
Roach received an engagement letter from that Pharrell firm saying, you're the client only.

[00:20:56] Speaker 03:
And they also gave him explicit legal advice about what the arrangement he was proposing be done would mean for Fred and how Fred would probably want certain things.

[00:21:05] Speaker 03:
Roach admitted in his own testimony he didn't disclose a single word of that to Schrader sellers or to Fred.

[00:21:11] Speaker 03:
He kept that information.

[00:21:13] Speaker 03:
And his theory about, oh, I give you a check and if you deposit it and use it as you please, then I get a piece of your company.

[00:21:19] Speaker 03:
He didn't disclose that either.

[00:21:21] Speaker 03:
And over a period of 10 years when he claims the deal changes over and over and over again, he had 16 years or 15 years to disclose or give some sort of advice to his clients, and he never did.

[00:21:33] Speaker 03:
And so this was the quintessential case of an attorney not only breaching his obligations from day one, but day

[00:21:41] Speaker 03:
15 years later, continuously.

[00:21:43] Speaker 02:
Mr. Lowe, if the violation of the California rule has a remedy of the transaction being voidable, and I've heard unenforceable, but it looks like voidable, has Fred elected to void it, and where would we find that in the record?

[00:22:04] Speaker 03:
The problem, Your Honor, is I think there are two deals here.

[00:22:08] Speaker 03:
And there's a deal my client claims exists, and there's his deal.

[00:22:11] Speaker 03:
So avoiding a deal that didn't exist in the first place, I guess, is where my mind gets messed up.

[00:22:16] Speaker 03:
Shepard Mullin says the deal's unenforceable, regardless.

[00:22:20] Speaker 03:
So whether or not you have to take an affirmative action to enforce it.

[00:22:23] Speaker 03:
Remember, our clients had standing to adjudicate who owns their assets.

[00:22:29] Speaker 03:
They also had standing to defend the counterclaims where Roach claimed that he was enforcing this.

[00:22:34] Speaker 03:
an ethical agreement against them.

[00:22:36] Speaker 03:
And so I don't think it required anything more than that.

[00:22:38] Speaker 03:
Enforcing the deal, as Shepard Mullen says, would cause you to conflict with California public policy and California law.

[00:22:47] Speaker 03:
There's no reason to avoid it.

[00:22:48] Speaker 02:
Well, I guess as I understand the logic of the, I'll take another look at the relation of Shepard Mullen and some of the earlier cases that speak to voidability, is that the rule itself allows a client to ratify

[00:23:02] Speaker 02:
transaction that would otherwise be problematic under the rule.

[00:23:05] Speaker 02:
And I guess I'm just trying to find where in the record, whether it's Sellers or Fred or where did they repudiate or void the deal if they had that option.

[00:23:18] Speaker 03:
Sure, Your Honor.

[00:23:18] Speaker 03:
I think the most obvious place is by bringing this lawsuit and plating the declaratory judgment action that was pled.

[00:23:24] Speaker 03:
And Fred testified, has testified from day one consistently.

[00:23:29] Speaker 03:
It was a loan.

[00:23:29] Speaker 03:
He was loaned $135,000.

[00:23:32] Speaker 03:
He paid back with interest.

[00:23:34] Speaker 03:
He paid a yearly retainer of wine for attorney's fees.

[00:23:37] Speaker 03:
And when he got sued and now Trader Seller's got sued for violating a different deal with Equity Kicker, at that point, that's where our clients say,

[00:23:47] Speaker 03:
Okay, you not only have caused us damage by clouding title, but we're entitled to the equitable remedy of disgorgement, which comes from voiding the real deal, which is the original deal of the loan.

[00:24:02] Speaker 03:
I would say where on the record is our claims avoiding it.

[00:24:06] Speaker 00:
Let me ask you this.

[00:24:07] Speaker 00:
Arguendo, if we were to agree with the district court regarding the 3-300 issue,

[00:24:14] Speaker 00:
And we were arguing, though, to think that the jury should have had no role in determining the gravamen of the complaint.

[00:24:26] Speaker 00:
I assume your position is we would send this back for a new trial, is that right?

[00:24:30] Speaker 03:
That's correct, Your Honor.

[00:24:30] Speaker 00:
Now, can you comply with the statute of limitations on your claim at that point, and if so, why?

[00:24:37] Speaker 03:
Absolutely, and the jury found we had the statute of limitations as a question then.

[00:24:42] Speaker 03:
The reason why is the damage to Schrader sellers came from the clouding of title, causing Schrader sellers to have to employ new counsel to take steps to remedy the old counsel Roach's problem.

[00:24:54] Speaker 03:
That occurred within a year of filing suit.

[00:24:56] Speaker 03:
Now, the second remedy of disgorgement does not have a statute of limitations problem because that's only triggered upon a finding of liability.

[00:25:04] Speaker 03:
My clients are consistent.

[00:25:06] Speaker 03:
The original deal was not harmful to them.

[00:25:08] Speaker 03:
It's the clouding of title and claiming equity that caused the harm.

[00:25:12] Speaker 03:
So we believe the only question to go back on are the question of damages and then the question of then equitable relief.

[00:25:19] Speaker 02:
But Mr. Lowe, if the privilege is a question of law, why would not the district court have the opportunity to decide that question prior to any retrial?

[00:25:28] Speaker 03:
I, it's a good question, Judge Johnson.

[00:25:31] Speaker 03:
I think it did.

[00:25:32] Speaker 03:
The district court found that there was a breach of fiduciary duty and explained that the reason for the breach was not following 3-300.

[00:25:39] Speaker 03:
That's all it takes.

[00:25:41] Speaker 03:
That's the gravamen of the claim.

[00:25:43] Speaker 02:
If the concern is the jury should... So where would we... It's a little bit like the voiding of the contract.

[00:25:50] Speaker 02:
Where would we look to find the district court holding that the privilege applied given that the court put it to the jury?

[00:25:59] Speaker 03:
Well, the substance of the district court finding the fiduciary duty breach is in the jury instructions themselves to the jury.

[00:26:07] Speaker 03:
That's why those instructions make no sense then to later say, but if you find the Gravamans not the breach,

[00:26:13] Speaker 03:
of 3,300 something else, then you can find privilege.

[00:26:16] Speaker 03:
That's why it never made sense to me.

[00:26:18] Speaker 02:
But as I understood your argument, at least one alternative argument is that there are at least two different vehicles for the privilege to obtain.

[00:26:29] Speaker 02:
One is the lawsuit, and the other is Mr. Roach's out of court statements of ownership.

[00:26:35] Speaker 02:
It strikes me that, again, where should I look to find that the district court actually did decide that so that we could remand for our new trial?

[00:26:43] Speaker 03:
Yes, Your Honor.

[00:26:44] Speaker 03:
I believe the district court decided it whenever it found the breach of fiduciary duty, both even at summary judgment, but here by finding that there was adequate grounds irrespective of the lawsuit.

[00:26:55] Speaker 03:
The prior conducts the basis of the lawsuit, not the subsequent filing of a suit.

[00:27:01] Speaker 03:
That's California law saying you can't reverse immunize.

[00:27:04] Speaker 03:
So I just think there's no legally sufficient evidence of privilege.

[00:27:07] Speaker 03:
And so if you determine that, the district court would need to revisit that again.

[00:27:12] Speaker 00:
Your time is up, let me ask my colleagues additional questions.

[00:27:15] Speaker 00:
All right, thank you very much for your argument.

[00:27:18] Speaker 00:
Mr. Lowe, Mr. Voice, you have some rebuttal time.

[00:27:23] Speaker 01:
I'd like to start by following up on my answer to Judge Bennett.

[00:27:28] Speaker 01:
I would direct you on the question of our requesting application of the privilege as a matter of law.

[00:27:34] Speaker 01:
I have a briefing site for you, page 46 of our third brief.

[00:27:41] Speaker 01:
I would start with that.

[00:27:43] Speaker 01:
Judge Johnstone, I think that the order regarding privilege, which appears in volume

[00:27:53] Speaker 01:
one of the excerpts of record, pages 60 through 61, gives you the trial courts thinking about the privilege issue and what it was trying to accomplish.

[00:28:05] Speaker 01:
But I don't want to lose sight

[00:28:07] Speaker 01:
of the larger picture, which is question of law or question of fact, we think the privilege is applicable.

[00:28:14] Speaker 01:
We don't think a remand for a retrial on seller's breach of fiduciary duty claim is warranted for that reason, but we do think- Let's just say, arguendo.

[00:28:25] Speaker 00:
If the court were to conclude that the issue of the gravamen of the complaint or the case was a matter of law, what should we do?

[00:28:36] Speaker 01:
I think this court has the authority to reverse and render in Roach's favor on that, with respect to... The jury decided in his favor, what would we be reversing based on your position?

[00:28:52] Speaker 01:
I guess it would be that the jury finding was immaterial.

[00:28:55] Speaker 01:
Either the jury finding was consistent with a matter of law ruling, or it was immaterial because it's a question of law.

[00:29:02] Speaker 01:
And what's your position?

[00:29:04] Speaker 00:
Your opponent says that the trial judge actually decided to grab him an issue by virtue of his ruling regarding essentially Rule 300.

[00:29:12] Speaker 00:
What's your position on that?

[00:29:15] Speaker 01:
So I would invite the court to review the summary judgment order and then review the jury instructions.

[00:29:23] Speaker 01:
So the summary judgment order starts at page 75 of volume 1.

[00:29:29] Speaker 01:
The jury instructions start at page 24.

[00:29:34] Speaker 01:
And what you're going to see is that in the summary judgment order, the trial court

[00:29:39] Speaker 01:
said, I believe Rule 3-300 applies.

[00:29:44] Speaker 01:
I believe it was not complied with.

[00:29:46] Speaker 01:
The contract is voidable.

[00:29:49] Speaker 01:
But the summary judgment order does not say, and therefore, there was a breach of fiduciary duty.

[00:29:56] Speaker 01:
The instructions say that.

[00:29:58] Speaker 01:
The jury instructions say that.

[00:29:59] Speaker 01:
And so that is, we believe, an extrapolation from the summary judgment order.

[00:30:03] Speaker 00:
Council does it, again, based on the

[00:30:08] Speaker 00:
fundamental basis of 3300, when you violate that, isn't that per se a violation of a fiduciary duty?

[00:30:17] Speaker 01:
Kersh and multiple authorities say that standing alone a violation of the disciplinary rules does not establish civil liability.

[00:30:28] Speaker 01:
It may be evidentiary of a claim for fiduciary duty.

[00:30:32] Speaker 00:
Don't lawyers have a fiduciary duty with their clients?

[00:30:35] Speaker 01:
Again, the purpose of the disciplinary, the answer to your question is yes, they owe a fiduciary duty.

[00:30:41] Speaker 00:
And our UNO, if Mr. Roach violated that duty by failing to comply with 3300, isn't there, by definition, a breach of fiduciary duty?

[00:30:52] Speaker 01:
a jury gets to decide whether the failure to comply with 3300 because Kersh and multiple cases say that the rules do not exist to establish civil liability.

[00:31:05] Speaker 01:
They exist for disciplinary purposes.

[00:31:08] Speaker 01:
It may be disciplinary of it, but you may well have a situation which we believe is present here

[00:31:13] Speaker 01:
where it's not a situation of a faithless attorney who takes advantage of the client, but the other way around.

[00:31:21] Speaker 04:
You concede, though, that the cases show that you move to the probate code and there is a rebuttable presumption.

[00:31:30] Speaker 01:
There is a rebuttable presumption, and we proffered evidence to rebut it in our summary judgment briefing.

[00:31:37] Speaker 01:
And I can offer you individual sites.

[00:31:39] Speaker 01:
I suspect the court already knows where those are.

[00:31:43] Speaker 01:
There's been some contention.

[00:31:45] Speaker 01:
There was some contention by the district court that we hadn't done that and we did raise it.

[00:31:51] Speaker 01:
I see the red light.

[00:31:52] Speaker 01:
May I finish my answer?

[00:31:53] Speaker 00:
Answer his question, please.

[00:31:54] Speaker 01:
Okay, so this was fairness, the rebuttal of the presumption was expressly raised in our summary judgment briefing.

[00:32:07] Speaker 01:
I would direct the court to volume four of the excerpts of record 659,

[00:32:12] Speaker 01:
to 660.

[00:32:14] Speaker 01:
It was also discussed during the court hearing at pages 552 through 553, where we expressly said to the court, fairness is a jury issue.

[00:32:25] Speaker 01:
And then we raised evidence pertaining to fairness, which I can tick through very quickly.

[00:32:30] Speaker 01:
Fred obtained benefits from the agreement.

[00:32:32] Speaker 01:
Fred misrepresented the agreement to Roach.

[00:32:35] Speaker 01:
Fred required that there be no written agreement.

[00:32:37] Speaker 00:
But counsel, Fred's not the lawyer.

[00:32:40] Speaker 00:
It's not his obligation to disclose these things.

[00:32:43] Speaker 00:
It's not his obligation to establish the bona fides of the contract.

[00:32:48] Speaker 00:
It's your client.

[00:32:49] Speaker 00:
He's the lawyer.

[00:32:50] Speaker 00:
It seems like you're putting Fred on trial here, as if he were the lawyer, that he's the one that had to explain everything.

[00:32:59] Speaker 00:
That's backwards, isn't it?

[00:33:00] Speaker 01:
I would respectfully submit that a jury gets to look at all of the facts and circumstances, just like, you know, the circumstances that are outlined in Kersh, and decide if there is a rule violation, does that necessarily get you to the next step?

[00:33:18] Speaker 01:
Important to remember that Fred is separately represented as well.

[00:33:22] Speaker 01:
Fred's own law firm

[00:33:23] Speaker 01:
said that the circumstances favored Fred.

[00:33:26] Speaker 01:
That appears at page 10 of the excerpts of record 1799.

[00:33:29] Speaker 01:
And in answer to the question that you had raised, Judge Smith, about advising Fred about the limits of representation or the circumstances,

[00:33:41] Speaker 01:
I would direct you to volume four of the excerpts of record page 683-84 and 766-68 wherein they reflect that Roach told Fred that Roach would not opine on California law that he was going to have to get a California lawyer to do things like that.

[00:34:00] Speaker 01:
So my point is we respectfully submit that there is at least enough to raise a fact issue

[00:34:08] Speaker 01:
on the issues that were decided by summary judgment.

[00:34:13] Speaker 00:
My colleague has an additional question here.

[00:34:15] Speaker 02:
Yes, sir.

[00:34:16] Speaker 02:
Since the jury's verdict on the privilege issue was predicated on the breach of fiduciary duty, would you agree that if you succeed in getting a retrial as to the breach issue,

[00:34:30] Speaker 02:
the district court would have to revisit the privilege issue after, based on the facts found by the prior verdict.

[00:34:38] Speaker 02:
In other words, if you get a retrial, the privilege issue has to come up again and be decided over again.

[00:34:50] Speaker 01:
I do not agree with that, and let me state it positively.

[00:34:54] Speaker 01:
I think this court has the authority, and it would be appropriate to affirm the jury verdict and reverse the summary judgment.

[00:35:02] Speaker 01:
Essentially, the way I think about this is this case has two different buckets.

[00:35:08] Speaker 01:
There's the bucket of seller's breach of fiduciary duty claim against us, which is knocked out by the privilege.

[00:35:15] Speaker 01:
That does not need to be retried.

[00:35:17] Speaker 01:
Then there is the separate bucket.

[00:35:19] Speaker 01:
of Roach's ownership claims, the declaratory judgments relating to ownership of interest in the wine in RBS.

[00:35:30] Speaker 01:
And I think that can be reversed.

[00:35:34] Speaker 01:
The summary judgment should be reversed.

[00:35:35] Speaker 01:
It would be remanded for further proceedings consistent.

[00:35:38] Speaker 01:
perhaps a trial.

[00:35:42] Speaker 01:
So I think the decision tree has two different branches there.

[00:35:48] Speaker 01:
I don't think it necessarily follows one or the other.

[00:35:51] Speaker 01:
And our focus is the bucket that has Roach's claims for ownership were improperly determined by summary judgment, and those do need to go back.

[00:36:03] Speaker 00:
Other questions?

[00:36:03] Speaker 00:
All right, thank you very much.

[00:36:05] Speaker 00:
Thank you both for your argument.

[00:36:07] Speaker 00:
That case just argued is submitted.