[00:00:14] Speaker 01:
The United States Court of Appeals for the Ninth Circuit is now in session.

[00:00:23] Speaker 01:
Please be seated.

[00:00:25] Speaker 02:
This is the second session this morning for our court.

[00:00:29] Speaker 02:
First, I want to thank Judge Gilman for coming from the Sixth Circuit to be with us today.

[00:00:36] Speaker 02:
And I hope that you have very safe travels on your return.

[00:00:41] Speaker 02:
Thank you.

[00:00:41] Speaker 04:
I'm pleased to be here.

[00:00:42] Speaker 02:
Yes.

[00:00:43] Speaker 02:
And the first three cases have been submitted on the briefs, Williams v. Bondi, Jaramillo v. Bondi, and Hernandez v. Bondi.

[00:00:57] Speaker 02:
And we will take up Coy Design versus Marin Lawyers.

[00:01:03] Speaker 02:
All right, council, you may proceed.

[00:01:16] Speaker 03:
May it please the court?

[00:01:17] Speaker 03:
My name is Josh Epstein.

[00:01:19] Speaker 03:
I'm an attorney at McCarrum & Associates, and I'm representing Coy Design LLC.

[00:01:24] Speaker 03:
which is the appellant in appeal number 23-55704 and the appellee in the appeal filed by Mr. Douglas Mastroianni, which is 23-55724.

[00:01:35] Speaker 03:
I'd like to use about nine minutes of my time to discuss Coy's appeal, three minutes of my time to discuss Mr. Mastroianni's appeal, and I'd like to reserve three minutes of time for rebuttal.

[00:01:46] Speaker 02:
Right.

[00:01:47] Speaker 02:
Watch your clock.

[00:01:48] Speaker 03:
Thank you.

[00:01:52] Speaker 03:
Starting with Coy's appeal, I'd like to focus on three points in argument today.

[00:01:58] Speaker 03:
First, the district court should be reversed for granting Marin lawyers summary judgment on a ground not raised by Marin lawyers without providing Coy notice and a reasonable opportunity to respond.

[00:02:11] Speaker 03:
Two, the district court should be reversed for finding that Marin lawyers had met its initial burden with respect to the damages element of Coy's claims.

[00:02:20] Speaker 03:
And three, the district court should be reversed because there was a genuine dispute of material fact with respect to Coy's claim for intentional breach of fiduciary duty.

[00:02:31] Speaker 03:
Starting with the first point, that the district court should be reversed for granting summary judgment on a ground not raised by Marin lawyers without providing notice and an opportunity to respond.

[00:02:45] Speaker 03:
Causation and damages with respect to Coy's claim for legal

[00:02:51] Speaker 03:
legal malpractice are separate elements.

[00:02:53] Speaker 03:
Causations about approximate causal connection between the attorney's negligence and the injury, and damages is about whether that injury is cognizable damages under the law.

[00:03:06] Speaker 03:
And therefore, there were two conceptually distinct ways for Marin lawyers at summary judgment to attack Coy's ability to prove that Marin lawyers had caused Coy harm.

[00:03:18] Speaker 03:
One,

[00:03:18] Speaker 03:
was to assume that the default judgment was harm, but challenge Coy's ability to show that Marin had done anything to cause the default judgment.

[00:03:29] Speaker 03:
The second is to say, no matter what Marin lawyers did, the default judgment is not harm because even with competent counsel, Coy was going to lose terribly in the trademark litigation against SPI, such that a $5.2 million

[00:03:46] Speaker 00:
Judgment with troubled damages under the Lanham Act and no if Marin argued that its conduct didn't cause that harm Then how was koi not on notice?

[00:03:55] Speaker 03:
That it needed to address causation Your honor it thank you for the question.

[00:04:00] Speaker 03:
It's because there are two very distinct ways of Challenging koi's ability to show harm and one focuses one takes the harm for granted

[00:04:10] Speaker 03:
which is what Marin's briefing did.

[00:04:12] Speaker 03:
It focused on the default judgment as harm.

[00:04:16] Speaker 03:
Never said to Coy, you can't prove you would have done better than that.

[00:04:19] Speaker 03:
Marin Lawyer's challenge at summary judgment was about saying all the bad stuff that happened that led to the default judgment, all of Mr. Mastroianni's misconduct, failure to follow court orders, failure to properly

[00:04:37] Speaker 03:
respond to discovery.

[00:04:39] Speaker 03:
That all happened after Marin lawyers had terminated him.

[00:04:42] Speaker 03:
So that's a very distinct challenge to the causation element of Coy's claims.

[00:04:47] Speaker 03:
It is not saying to Coy, you can't prove you would have done better than the default judgment at trial.

[00:04:54] Speaker 03:
And you can see this from Marin's moving papers.

[00:04:57] Speaker 03:
One of Marin's conclusions of law was all of the harm for which Coy seeks recovery in this action, the entry of default, the terminating sanctions, default judgment,

[00:05:07] Speaker 03:
was proximately caused by a course of conduct that occurred after Mr. Mastroianni left Marin.

[00:05:13] Speaker 03:
That is not saying, Takoi, come forward with all of your evidence to show that you had viable defenses to the trademark claims against you.

[00:05:24] Speaker 03:
It is not saying, Takoi, come forward with all of your evidence of costs to show that you would have been able to reduce the judgment against you and never land him back.

[00:05:32] Speaker 00:
You just said caused by Mr. Mastroianni after he left Marin.

[00:05:38] Speaker 00:
Hearing cause and causation in there, but I guess you're saying it was just not sufficient notice of causation.

[00:05:45] Speaker 00:
Is that right?

[00:05:46] Speaker 03:
Your Honor, I do believe that they're related elements of the cause of action, but they are distinct elements.

[00:05:52] Speaker 03:
And that's clear from Bud V. Nixon.

[00:05:54] Speaker 03:
Causation is about proximate cause of the alleged injury.

[00:05:58] Speaker 03:
Damages is about whether that injury is actual damages.

[00:06:01] Speaker 03:
And so, yes, I'm using the word causation, but they're conceptually distinct.

[00:06:07] Speaker 03:
And even if you view them as the same, this is a very different theory of causation, of which Coy did not have notice at summary judgment.

[00:06:15] Speaker 03:
Marin's attack on causation was about whether Mr. Mastriani did all of the bad stuff that led to the default judgment after he was terminated or before.

[00:06:27] Speaker 03:
That was the challenge to causation in Marin's moving papers.

[00:06:31] Speaker 03:
It was not, as I said, a challenge to Coy's ability to prove that it would have.

[00:06:35] Speaker 00:
Could we talk a little bit about the causation, just assuming that you had notice?

[00:06:46] Speaker 00:
Clearly, Mr. Mastroianni did a number of things while he was at Marin.

[00:06:50] Speaker 00:
that disadvantaged your client.

[00:06:55] Speaker 00:
But there was significantly additional activity that he did afterwards that also significantly harmed your client.

[00:07:02] Speaker 00:
How can we say that what he did at Marin was the but for cause of what has ultimately resulted in a judgment?

[00:07:13] Speaker 03:
Thank you for the question, Your Honor.

[00:07:14] Speaker 03:
I would say two things.

[00:07:16] Speaker 03:
One, if you look at the court's orders,

[00:07:20] Speaker 03:
entering term, or striking Coy's answer, terminating sanctions, default judgment against Coy, they all rely on stuff in part that happened while Mr. Mastroianni was employed by Marin.

[00:07:36] Speaker 03:
There's language like the conduct of counsel tainted the case from day one.

[00:07:42] Speaker 03:
reference to the complete failure to file a Joint Rule 26 report at the very outset of the litigation, failure to meet and confer with counsel before filing a Joint Rule 26 report.

[00:07:54] Speaker 03:
And so the orders that led to the harm against Coy reference conduct not just that happened after Mr. Mastroianni was terminated, but before.

[00:08:06] Speaker 03:
And the second point that I would raise, Your Honor, is to just say that it's clear from

[00:08:11] Speaker 03:
the declaration of Kathy Peterson, that if Coy had been notified by Marin lawyers, that Marin lawyers had terminated Mr. Mastroianni because he was not showing up to work, he was not communicating with the firm or with clients, he had been deemed to have abandoned his job and was a malpractice liability for the firm, if they had told Ms.

[00:08:40] Speaker 03:
Peterson that,

[00:08:41] Speaker 03:
Coy would have immediately terminated Mr. Mastroianni and found competent counsel.

[00:08:46] Speaker 03:
And therefore, with competent counsel, it's reasonable to infer that competent counsel would not have failed to respond to discovery, ignored court orders, failed to notify Coy at all that terminating sanctions had been entered against it.

[00:09:04] Speaker 03:
So that's how I would respond to that question, Your Honor.

[00:09:06] Speaker 04:
And one of your big problems is, though, that there's been no evidence in the record

[00:09:10] Speaker 04:
ever had a real defense to the basic trademark infringement action.

[00:09:16] Speaker 03:
Your Honor, that actually goes to lack of notice, because that's not what this motion was about at summary judgment.

[00:09:23] Speaker 03:
It was not about whether Koi could prove that it had viable defenses on the merits, but even if you assume that Koi was going to lose on the merits, there's a huge difference between a loss on the merits that reduces a judgment for the cost associated with sales of an allegedly infringing product.

[00:09:42] Speaker 02:
With respect to your lack of notice claim, didn't Koi itself argue in opposition to

[00:09:50] Speaker 02:
Marin's motion for summary judgment the correct standard that the but for standard that it had to meet and yet it didn't make any effort to meet it.

[00:10:02] Speaker 02:
So it argued that the site er 1, 8, 8, 8, 4 is where in the opposition quite stated the exact standard it had to meet but made no effort to meet it.

[00:10:17] Speaker 03:
Your Honor, reciting the governing legal standard does not show that Coy had noticed that it needed to come forward with all of its evidence to show that it would have obtained a better outcome.

[00:10:29] Speaker 02:
How could it be reasonable for an attorney to be aware of the correct governing standard and the burden that it placed on the plaintiff to approve as to the Bedford causation and not bring forward evidence to meet that burden?

[00:10:47] Speaker 03:
The argument that Coy made in opposing summary judgment was that Marin lawyers had failed to meet the initial burden on the issue of damages.

[00:10:57] Speaker 03:
So Coy was raised.

[00:10:58] Speaker 03:
This is the legal standard that would govern that trial on which Coy would have the burden of persuasion.

[00:11:04] Speaker 03:
There's no doubt about that.

[00:11:05] Speaker 03:
But at summary judgment, Coy doesn't have to come forward with any of its evidence on a particular element of its cause of action until Marin lawyers has met its initial burden with respect to that element.

[00:11:15] Speaker 03:
And Coy pointed out,

[00:11:17] Speaker 03:
the legal standard that would govern at trial, and also that Marin Lawyers had failed to meet its initial burden with respect to its damages.

[00:11:24] Speaker 03:
So Coy's opposition brief, in my view, again reflects the lack of notice.

[00:11:30] Speaker 03:
Coy is saying, Marin Lawyers, you have failed to even shift the burden to Coy on the issue of whether Coy could have obtained a better outcome.

[00:11:37] Speaker 02:
Well, did Coy have defenses to the trademark claims that were brought against it?

[00:11:44] Speaker 03:
Your Honor,

[00:11:46] Speaker 03:
I would say that the analysis of whether there was a likelihood of confusion, which is one of the principal analyses under

[00:11:57] Speaker 03:
the Lanham Act was not super developed in the record because again, there wasn't notice to Coy on that issue.

[00:12:06] Speaker 03:
But I will say that it's easier, there's more in the record with respect to damages, which again, even if Coy was gonna lose on the merits of the Lanham Act claim, the $5.2 million default judgment against Coy was the worst case scenario.

[00:12:21] Speaker 03:
Trebled damages and no reduction for costs.

[00:12:23] Speaker 03:
Normally under the Lanham Act,

[00:12:25] Speaker 03:
The plaintiff proves revenues of the allegedly infringing product, and then the other side has an opportunity to show, hey, we actually incurred a lot of cost selling those products, and therefore... But Coy eventually settled with SPI for three and a half mil, right?

[00:12:42] Speaker 03:
Yes, Your Honor, that's correct.

[00:12:43] Speaker 04:
So, I mean, they ended up actually settling for a lot less than that default judgment.

[00:12:49] Speaker 03:
That's true that they settled for less than the default judgment, Your Honor, but this is also after Coy had filed for bankruptcy.

[00:12:54] Speaker 03:
incurred over a million dollars of professional fees in bankruptcy and has considerable costs associated with that bankruptcy that are ongoing.

[00:13:05] Speaker 04:
Now, Coy also received over a million dollars from the Bloom law firm, is that correct?

[00:13:10] Speaker 03:
Yes, Your Honor.

[00:13:11] Speaker 04:
And that was where Vastraiani went after he left Marin and did most of the harm that resulted in the default judgment.

[00:13:20] Speaker 03:
Well, Your Honor, I would disagree that he did most of the harm there.

[00:13:26] Speaker 03:
Again, if Marin lawyers at the very outset had said, we are firing Mr. Mastroianni because he's abandoned his job and notified Coy that that was the reason that it was firing Mr. Mastroianni, Coy would have had an opportunity to hire competent counsel and avoid all of the harm that happened after that.

[00:13:50] Speaker 00:
Why didn't COI submit its cost and deduction spreadsheet in its summary judgment briefing or its motion for clarification briefing?

[00:14:01] Speaker 00:
And if you didn't submit it, can we even consider it?

[00:14:06] Speaker 03:
Your Honor, this again goes to lack of notice.

[00:14:11] Speaker 03:
The reason it wasn't part of the original summary judgment record is because none of the facts in Marin's

[00:14:17] Speaker 03:
statement of additional facts could be disputed by showing that COI would have done better than the final outcome of the SPI litigation.

[00:14:28] Speaker 03:
Why didn't COI submit the evidence after that?

[00:14:33] Speaker 00:
You talked about it in a number of places, but then never just attached it as an exhibit.

[00:14:40] Speaker 00:
For example, your motion for clarification says, well, we had this 9,000 page spreadsheet, but it didn't attach it.

[00:14:47] Speaker 03:
Yes, Your Honor.

[00:14:48] Speaker 03:
Well, it actually wasn't Coy's motion for clarification.

[00:14:51] Speaker 03:
It was Merrin Lawyer's.

[00:14:52] Speaker 03:
And in opposing that motion, Coy pointed out to the court that there was additional evidence that it could have submitted.

[00:14:59] Speaker 03:
And Your Honor, I would argue that the question that you're asking goes to whether or not Coy was prejudiced.

[00:15:07] Speaker 03:
And I think that the case Costello, which is a

[00:15:12] Speaker 03:
I believe that it's a Seventh Circuit case is persuasive authority on this because in that case a trustee had sued borrowers on a promissory note and the borrowers raised an illegality defense.

[00:15:26] Speaker 03:
to that lawsuit, and the trustee moved for summary judgment.

[00:15:31] Speaker 00:
But can we consider it if it's not in the record?

[00:15:34] Speaker 00:
I mean, just representing that you have it, that you could have introduced it, but if you never did, can we consider it?

[00:15:41] Speaker 03:
I think you can, because I think what it shows, and what's actually already in the record in COI's interrogatory responses,

[00:15:48] Speaker 03:
to Marin's interrogatories is that Coy incurred costs.

[00:15:52] Speaker 03:
And it's not unreasonable to infer that.

[00:15:55] Speaker 03:
There were costs and that Coy could have submitted evidence of those costs to dispute the principle argument, the principle theme of Marin's moving papers, which is, sorry, excuse me.

[00:16:08] Speaker 00:
Is that in the record for this appeal?

[00:16:11] Speaker 03:
The interrogatory responses, yes.

[00:16:13] Speaker 00:
What's the site for that?

[00:16:15] Speaker 03:
If you give me a moment, Your Honor, I can tell you.

[00:16:18] Speaker 00:
Or you can tell us on rebuttal.

[00:16:21] Speaker 00:
You can tell us on your rebuttal so you can take more time.

[00:16:47] Speaker 05:
Good morning, Your Honors.

[00:16:50] Speaker 05:
Randy Miller for Defendants and Appellees, Marin Lawyers, APC.

[00:16:57] Speaker 05:
And thank you for the opportunity to address the panel this morning and welcome Justice Gilmour to California.

[00:17:03] Speaker 05:
Just a judge.

[00:17:03] Speaker 04:
Gilman.

[00:17:04] Speaker 04:
Just a judge.

[00:17:04] Speaker 04:
Gilman.

[00:17:05] Speaker 05:
And Gilman.

[00:17:06] Speaker 05:
Thank you.

[00:17:09] Speaker 05:
One of the things that's unusual about the legal malpractice case

[00:17:14] Speaker 05:
is that we had the same judge who was the judge in the trier of fact in the underlying case as we did in the legal malpractice case.

[00:17:21] Speaker 05:
So as a baseline, it is important to this case and this appeal that Judge Hatter was the judge assigned to the underlying case, SPI versus Coy, and that Magistrate Judge Standish was assigned

[00:17:39] Speaker 05:
and made various findings, important findings in the underlying case, and that each of Magistrate Judge Standish's orders were adopted by Judge Hatter.

[00:17:53] Speaker 05:
Given that Coy was continuing as a party from the underlying case to the legal malpractice case,

[00:18:00] Speaker 05:
Coy was directly aware of each and every one of those orders.

[00:18:03] Speaker 05:
They were not secretive.

[00:18:04] Speaker 05:
They were a party to the order.

[00:18:06] Speaker 05:
They were bound by the order.

[00:18:07] Speaker 05:
They were bound by the consequences of those orders and findings.

[00:18:11] Speaker 00:
Can I tell you what is of concern to me?

[00:18:12] Speaker 00:
As I look at these emails between Paul Marin and other of the counsel in his firm, and clearly the Marin law firm was aware of Mr. Mastrione's incompetence and malpractice.

[00:18:26] Speaker 00:
Just there's a lot of email.

[00:18:27] Speaker 00:
He needs minders.

[00:18:28] Speaker 00:
He's dropping the ball.

[00:18:29] Speaker 00:
He's missing deadlines and it is a little unsettling that when Marin's client, I know you're trying to distance yourself and say, no, this was Mr. Mastroni's client.

[00:18:41] Speaker 00:
When Marin's client asked, why is Mastroni leaving the firm?

[00:18:46] Speaker 00:
Is there any reason for concern?

[00:18:49] Speaker 00:
Marin withheld the information.

[00:18:51] Speaker 00:
It's really, I find that pretty unsettling because

[00:18:55] Speaker 00:
That is the firm's client and there should be some candor there and there wasn't.

[00:19:01] Speaker 05:
No question that there were some issues with Mr. Mastroianni and there were some internal discussions at Merrin Law about Mr. Mastroianni's handling of certain claims.

[00:19:13] Speaker 05:
We submitted an expert declaration of Mark Tuft, T-U-F-T, as part of our moving papers and the motion for summary judgment talking about that issue and whether it violated the duty of CANDOR or violated a duty of reporting

[00:19:30] Speaker 05:
significant issues under the rules of professional conduct or any other standards, and expert tough found that Mr. Mastroianni and the firm had complied with all those obligations.

[00:19:43] Speaker 02:
Well, what if we don't think so?

[00:19:45] Speaker 02:
Because I, like Judge Coe, find this to be a serious breach of the duty of CANDOR, and I'm just wondering what impact

[00:19:57] Speaker 02:
that had the failure to put Coy on notice and give Coy the opportunity to get different representation had on the ultimate outcome of the lawsuit.

[00:20:08] Speaker 02:
I'm not sure there's a full record on that.

[00:20:12] Speaker 05:
There is a pretty full record.

[00:20:13] Speaker 05:
So starting with Mr. Mastroianni had been counsel for Coy for seven years and a number of matters.

[00:20:20] Speaker 05:
That was not a new relationship.

[00:20:22] Speaker 02:
While he was working at Marin.

[00:20:24] Speaker 02:
So, Coy was seven years Marin's client?

[00:20:29] Speaker 05:
No, he was, Coy was only Marin's client for about six months or so.

[00:20:37] Speaker 05:
Mr. Mastroianni was the one who was a 35-year experienced lawyer at that point in time, ran his own law firm.

[00:20:46] Speaker 00:
It doesn't matter.

[00:20:46] Speaker 00:
You were on notice that at that moment, he was incompetent.

[00:20:51] Speaker 00:
I mean, you look at all of these emails,

[00:20:54] Speaker 00:
It doesn't matter in the past, he may not have had whatever issues he had at this time, but Marin was on notice.

[00:21:01] Speaker 00:
And then what's compounding, unsettling, is you're now getting to use that failure to disclose as your argument to say there's no causation.

[00:21:12] Speaker 00:
Because Coy kept Mr. Mastroianni when he went to the Bloom law firm,

[00:21:16] Speaker 00:
That's the cause for all of the harm to Coy.

[00:21:21] Speaker 00:
But you caused that by not giving the disclosure so they could have actually hired competent counsel.

[00:21:27] Speaker 00:
So it's a little bit unsettling that you're now using the lack of candor.

[00:21:34] Speaker 00:
as the defense to say, well, everything that happened happened after he left.

[00:21:39] Speaker 00:
We got rid of him.

[00:21:39] Speaker 00:
We knew he was incompetent.

[00:21:41] Speaker 00:
We wanted him off our books.

[00:21:43] Speaker 00:
And so we just sent him off and never told our client that we had malpractice concerns with him.

[00:21:49] Speaker 05:
Well, thank you.

[00:21:51] Speaker 05:
Not sent him off.

[00:21:52] Speaker 05:
Mr. Mastroianni moved and took the case on his own.

[00:21:55] Speaker 00:
Oh, he got a termination letter.

[00:21:56] Speaker 00:
So you're saying he wasn't terminated?

[00:21:58] Speaker 05:
Yeah, Mr. He had already essentially stopped working on the case before then, the resignation letter or the letter to him for termination.

[00:22:07] Speaker 00:
All these letters, I'm sorry, all these emails from Paul Marin of Marin Law Firm say, can we fire Doug?

[00:22:13] Speaker 00:
Be subtle about the termination.

[00:22:16] Speaker 00:
I mean, anyway, I don't want to quibble on that point, but what about the bigger point?

[00:22:22] Speaker 00:
You're using the fact that you failed to disclose incompetence and malpractice of the attorney to your client, and now that is your defense to causation.

[00:22:33] Speaker 05:
Well, I think the defense to causation is not using that at all.

[00:22:38] Speaker 05:
The defense to causation is the consequential actions that were taken by Mr. Mastroianni that actually caused the damage

[00:22:45] Speaker 05:
that Coy is asserting in the legal malpractice case happened to occur after the fact.

[00:22:52] Speaker 00:
So why isn't that a jury question?

[00:22:54] Speaker 00:
Your opposing counsel is right.

[00:22:56] Speaker 00:
I guess as Judge Standish's order says, from the very beginning, they failed to do a Rule 26 plan.

[00:23:03] Speaker 00:
They failed to meet and confer.

[00:23:05] Speaker 00:
So why isn't that a jury question to parse out exactly what was the cause of the harm pre and post Marin?

[00:23:14] Speaker 05:
That was Coy's obligation in the motion for summary judgment.

[00:23:18] Speaker 05:
We put it to Judge Hatter to say, here are the facts, here are the timing of those facts.

[00:23:24] Speaker 05:
It was raised.

[00:23:25] Speaker 05:
Everything that you addressed, Justice Coe, was raised by Coy in response to the motion for summary judgment.

[00:23:32] Speaker 05:
There's all these bad acts and neglect by Mr. Mastroianni, and there was some recognition of that behind the scenes by the law firm, and then the relationship ended.

[00:23:42] Speaker 05:
You know, Mr. Mastroianni moved on.

[00:23:44] Speaker 05:
All of that was before the Judge Hatter in the underlying case.

[00:23:48] Speaker 05:
What we focused on on causation, which is a somewhat different element, it is a separate element of each and every of the claims that Coy brought in the legal malpractice case,

[00:23:59] Speaker 05:
that those damages did not take place or the acts that promulgated those damages did not take place until after Mr. Mastroianni left the Marin Law Group.

[00:24:13] Speaker 05:
So that's a fact and he adopted that exact finding

[00:24:18] Speaker 00:
Which may not have happened but for Marin's failure to disclose the incompetence and malpractice of their associate, Mr. Mastroianni.

[00:24:27] Speaker 05:
They had another year with Mr. Mastroianni where this was when he left to go to the Bloom Law Firm.

[00:24:34] Speaker 05:
There was another year of that relationship between Coy and Mr. Mastroianni where he continued to make mistakes that actually were the mistakes that resulted in the damage.

[00:24:45] Speaker 02:
And had the Marin firm

[00:24:48] Speaker 02:
put Coy on notice that Mastroni was being fired for malpractice and incompetence, then he wouldn't have been around to make those further errors when he was at the Bloom firm.

[00:25:05] Speaker 05:
There was a long relationship between Coy and Mr. Mastroni.

[00:25:08] Speaker 02:
I don't think that answers it.

[00:25:09] Speaker 02:
It doesn't answer it because they may have had a long relationship, but this behavior

[00:25:17] Speaker 02:
Certainly, the Marin firm was well aware of this incompetent behavior, but Coy was not aware of it.

[00:25:25] Speaker 02:
They thought they were getting full representation.

[00:25:29] Speaker 05:
Well, Magistrate Judge Standish also found that Coy had failed to manage or monitor the litigation to check up on Mr. Mastroianni to determine what the status was.

[00:25:43] Speaker 05:
and Judge, Magistrate Judge Standish was very critical of their failure to do that.

[00:25:50] Speaker 02:
I know, I mean, you know, I practiced law for 16 years.

[00:25:53] Speaker 02:
It was at O'Malveny Myers as a partner.

[00:25:55] Speaker 02:
I don't remember my clients.

[00:25:58] Speaker 02:
My clients trusted me to handle their affairs competently, and I don't recall them wanting to know the deadlines for the World 26 meeting, conference.

[00:26:08] Speaker 02:
I mean...

[00:26:10] Speaker 02:
I mean, I was managing the litigation.

[00:26:14] Speaker 02:
They weren't managing the litigation.

[00:26:17] Speaker 05:
McCoy had discovery.

[00:26:21] Speaker 05:
They had to sign declarations responsive to requests for production of documents.

[00:26:26] Speaker 05:
They had to find and produce the documents.

[00:26:29] Speaker 05:
They were actually involved in the process of the case, and they were signing declarations that

[00:26:34] Speaker 05:
the information that they were providing was true and correct.

[00:26:37] Speaker 02:
So it wasn't as though they were oblivious to what was... Were there any findings that anything they said was true and correct was not true and correct?

[00:26:45] Speaker 05:
There was some criticism of that by Judge Standish.

[00:26:49] Speaker 02:
Any findings?

[00:26:51] Speaker 05:
I know it was noted as a basis for the early finding on default.

[00:27:02] Speaker 05:
what Judge Standish said is that Coy was in a position to have monitored and I think the phrase that Judge Standish used was they put their

[00:27:16] Speaker 05:
proverbial head in the sand and refused to monitor anything about the case, yet at the same time they were responding to discovery, they were collecting documents, they were working with counsel, yet they didn't inquire as to what was going on in the case at all.

[00:27:35] Speaker 02:
Do we have anything on the merits as to the meritoriousness or not of the case, SPI versus Coy?

[00:27:48] Speaker 05:
As to the merit?

[00:27:49] Speaker 02:
Anything as to the merits, the defenses?

[00:27:53] Speaker 05:
Well, sadly no, but that was the issue that we put before Judge Hatter on summary judgment and that is, is there a consequential or provable loss here such that Coy had the opportunity to establish that they would have done better or that they would have had a better outcome of the underlying case.

[00:28:18] Speaker 05:
But there was already findings by Judge Standish, adopted by Judge Hatter

[00:28:23] Speaker 05:
that both were very dubious of whether Coy had any defenses at all.

[00:28:28] Speaker 05:
So to answer your question, Justice Wardlaw, the answer is there appear to be no defenses to the underlying case.

[00:28:36] Speaker 05:
There were disclosures made to trade organizations where they indicated or admitted that there was significant confusion between the marks.

[00:28:48] Speaker 05:
So I think that's exactly why both Judge Standish and Judge Hatter inquired as to whether there was any merit to their defense at all.

[00:28:58] Speaker 05:
But in the context of the summary judgment, Coy had the opportunity to put all that evidence on.

[00:29:03] Speaker 05:
I mean, happy to go back and talk about this notice issue that they weren't on fair notice that causation was going to be raised, but they had the opportunity to cede the record with all of that.

[00:29:15] Speaker 05:
A competent lawyer would have said, okay, I've seen all these rulings from the underlying case.

[00:29:20] Speaker 05:
That's troublesome.

[00:29:21] Speaker 05:
They're claiming that nothing that Marin did or that Mastroianni did while he was at Marin was a consequence.

[00:29:29] Speaker 00:
Why is that?

[00:29:30] Speaker 00:
They had an order to show cause for failure to answer the complaint.

[00:29:34] Speaker 00:
That's extreme.

[00:29:36] Speaker 00:
As a district judge, if I had to issue an order to show cause for someone to fail to answer the complaint, that automatically tells me incompetence.

[00:29:44] Speaker 00:
Okay?

[00:29:45] Speaker 00:
I mean, they failed to do the discovery plan, failed to do rule 26 conference.

[00:29:49] Speaker 00:
They didn't file a notice of interested parties.

[00:29:52] Speaker 00:
They did not add the paralegal to get ECF notifications.

[00:29:56] Speaker 00:
I mean, Hendrix told Peterson at Coy, there's this discovery deadline coming up because you all knew that they were going to miss the deadline.

[00:30:08] Speaker 00:
Mr. Hendrix was on notice of Mr. Mastroianni's incompetence.

[00:30:13] Speaker 00:
So I guess you're saying nothing of consequence happened.

[00:30:16] Speaker 00:
Really, how many of Marin's clients get OSCs for failure to answer the complaint?

[00:30:20] Speaker 00:
I'd really like to know that because if you think that's nothing of consequence, I kind of agree with Judge Wardlaw.

[00:30:28] Speaker 00:
Does Marin do client development by saying you have to keep track of all your own deadlines, you have to monitor our work for incompetence, you have to be on watch, make sure we're not committing malpractice?

[00:30:38] Speaker 00:
I would really like to see if that's how the Marin law firm operates.

[00:30:41] Speaker 00:
with its other clients?

[00:30:44] Speaker 05:
Let me address your remarks on whether these were acts of Mr. Mastroianni that were consequential.

[00:30:51] Speaker 05:
I use consequential with respect to whether there was some harm or result or loss from those.

[00:30:58] Speaker 05:
These things happen every day with law firms.

[00:31:00] Speaker 05:
Something doesn't get miscalendered or something that's... Does that happen all the time with Marin Law Firm?

[00:31:04] Speaker 00:
Do you get OSCs all the time because they fail to answer complaints on behalf of their clients?

[00:31:09] Speaker 05:
No.

[00:31:10] Speaker 05:
And that's why there was certainly a cause for some internal concern.

[00:31:17] Speaker 00:
But the burden- But Magistrate Judge Standish says, quote, beginning with Coy's failure to participate in the required Rule 26 conference of counsel, like that immediately makes an impression with the judge about what kind of case this is and who these parties are.

[00:31:33] Speaker 00:
And subjects you to strict scrutiny.

[00:31:35] Speaker 00:
Once you start screwing up like this, people know, OK, these are probably not competent lawyers.

[00:31:41] Speaker 02:
Can I ask another question?

[00:31:44] Speaker 02:
So Doug Mastroianni is a party to this case, right?

[00:31:53] Speaker 05:
He is a party to the legal malpractice case.

[00:31:56] Speaker 05:
He never appeared and he's the subject of a different appeal that I'm not arguing today.

[00:32:01] Speaker 02:
There's a different, because I'm wondering why he's not here.

[00:32:05] Speaker 05:
We did not represent him in the legal malpractice case.

[00:32:09] Speaker 05:
I believe he never responded or appeared in the legal malpractice case.

[00:32:15] Speaker 05:
He's made certain applications with respect to some matters that happened in the underlying case, but he's not an appeared operative party in this case.

[00:32:27] Speaker 02:
So you're saying the underlying case is also being appealed?

[00:32:31] Speaker 05:
There's an aspect that related to Mr. Mastroianni, and I'm not all that keen on exactly how Mr. Mastroianni has approached it, but I think the contention is that he has an appealable issue with respect to the sanctions that were awarded or that were imposed against him in the underlying case.

[00:32:51] Speaker 02:
Okay.

[00:32:52] Speaker 05:
That has nothing to do with... But that's separate from these two appeals.

[00:32:56] Speaker 05:
Yes, yeah.

[00:32:57] Speaker 05:
And again, he's not our client and he's taken a different path.

[00:33:01] Speaker 02:
Okay.

[00:33:03] Speaker 02:
All right.

[00:33:03] Speaker 02:
You're over your time.

[00:33:05] Speaker 02:
So if you want to sum up, that would be great.

[00:33:09] Speaker 05:
Thank you.

[00:33:09] Speaker 05:
I just want to address a couple of my colleague, Mr. Epstein's remarks on his opening where he asserted that there was lack of notice.

[00:33:20] Speaker 05:
I find that hard to understand.

[00:33:26] Speaker 05:
Causation is causation.

[00:33:28] Speaker 05:
There are many different standards that come up within sort of true legal malpractice cases.

[00:33:34] Speaker 05:
We've all heard them, case within a case, better result, those types of things.

[00:33:39] Speaker 05:
But the California Supreme Court in Biner versus Sweet made it very clear that those are just names for the same thing and that is causation.

[00:33:48] Speaker 05:
Every one of the claims in the Coy case against Marin had a causation element.

[00:33:56] Speaker 05:
Our essential response to that was that you can't prove that any of your damages were actually caused by actions or omissions of Mr. Mastroianni while he was affiliated with Marin Law.

[00:34:07] Speaker 05:
They had opportunity, they had notice and opportunity to have put that evidence before the court.

[00:34:13] Speaker 05:
A competent lawyer would have said,

[00:34:16] Speaker 05:
We need, now that we've seen these orders from Judge Hatter and Judge Standish, we need to load up on our causation evidence here and show that there would have been a better outcome or else we're going to lose that.

[00:34:28] Speaker 05:
None of that took place.

[00:34:30] Speaker 05:
That was the basis for Judge Hatter's

[00:34:32] Speaker 05:
decision based on sell attacks judge had her found that the burden had shifted to Koi to come forward with evidence To establish a prima facie case on each of his causes of action, and it did not it's as simple as that All right.

[00:34:48] Speaker 02:
Thank you counsel.

[00:34:49] Speaker 02:
Thank you Mr.. Epstein I think you did he use all this time or do you say okay?

[00:34:57] Speaker 02:
I'll give you a couple minutes to respond I

[00:35:06] Speaker 03:
Thank you, Your Honor.

[00:35:10] Speaker 03:
I wanted to first point out where in the record the interrogatory responses to Marin Lawyers' interrogatories are, and it's 10 ER 2272 through 2424.

[00:35:21] Speaker 03:
And with respect to the issue of notice, again, just to clarify,

[00:35:32] Speaker 03:
Coy did not have notice of the theory of causation that Marin lawyers presented in moving for summary judgment.

[00:35:41] Speaker 03:
Sorry, Coy had notice of only the theory of causation that Marin lawyers presented in moving for summary judgment.

[00:35:47] Speaker 02:
They pointed to certain responses to interrogatories and used that as a timeline of when Mastroianni committed these various acts and when he was working at Marin firm.

[00:36:03] Speaker 02:
That's what they did, to support it.

[00:36:07] Speaker 03:
To support, sorry?

[00:36:08] Speaker 02:
Their claim, they pointed to responses to interrogatories.

[00:36:13] Speaker 03:
Right, but the entire theory that they presented was just that all the bad stuff that led to the default judgment happened after Mr. Mastroianni left.

[00:36:22] Speaker 03:
They were not challenging Coy's ability to prove a better outcome.

[00:36:27] Speaker 03:
the district judge's one sentence finding that Marin had met its initial burden without any explanation does not engage with the Ninth Circuit's understanding of the initial burden, which is that you have to either produce evidence that negates an essential element of the plaintiff's cause of action or point to evidence in the record showing that the plaintiff can't establish that element.

[00:36:49] Speaker 03:
And as far as the better outcome theory, there's nothing to that effect in Marin's moving papers.

[00:36:55] Speaker 03:
And so therefore, the burden, the initial burden, as Coy argued in opposing Marin's motion on the issue of whether Coy could show its damages never shifted to Coy.

[00:37:04] Speaker 03:
And that's why there is no evidence in the record, really, about the merit of Coy's claims.

[00:37:09] Speaker 02:
So your argument is that Judge Hatter erred by making that finding?

[00:37:13] Speaker 02:
That's one of the arguments, yes, Your Honor.

[00:37:15] Speaker 02:
OK.

[00:37:18] Speaker 02:
All right.

[00:37:19] Speaker 02:
Well, now you're over your additional time.

[00:37:21] Speaker 02:
Well, thank you.

[00:37:22] Speaker 02:
Thank you.

[00:37:24] Speaker 02:
Coy design versus Marin lawyers will be submitted.