Los Angeles Lawyer June 2013

L awyer THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION 20 Ref -t 13 er o-L ral G awyer uide

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California • Chicagoland • New York Metro • Atlanta FEATURES 14 Seller Beware BY DON CHOMIAK Attorneys representing condominium buyers should familiarize themselves with federal disclosure requirements 21 Incident to Arrest BY KELLY C. QUINN AND MARK W. ALLEN Previous police search cases regarding containers and clothing do not address the wealth of information on cell phones Plus: Earn MCLE credit. MCLE Test No. 225 appears on page 25. 28 Storage Stop BY ART GHARIBIAN To prevent a storage unit auction sale, a tenant must move quickly to obtain a temporary restraining order

33 Special Section 2013 Lawyer-to-Lawyer Referral Guide

Los Angeles Lawyer DEPARTMENTS the magazine of the Los Angeles County 8 Barrister’s Tips 44 Closing Argument Steps for preparing for appellate oral What business clients should know Bar Association argument about smart phones June 2013 BY ANDREA AMBROSE LOBATO BY TOM MCCURNIN AND GREG R. CHAN Volume 36, No. 4 9 Practice Tips 43 CLE Preview Evaluating DAPTs for California residents COVER PHOTOGRAPH: TOM KELLER BY NEIL SCHOENBLUM AND JASON HELQUIST

12 Practice Tips To ﬁnd employment as a lawyer, you must market yourself BY NEVILLE L. JOHNSON

LOS ANGELES LAWYER (ISSN 0162-2900) is published monthly, except for a combined issue in July/August, by the Los Angeles County Bar Association, 1055 West 7th Street, Suite 2700, Los Angeles, CA 90017 (213) 896-6503. Periodicals postage paid at Los Angeles, CA and additional mailing offices. Annual sub- scription price of $14 included in the Association membership dues. Nonmember subscriptions: $28 annually; single copy price: $4 plus handling. Address changes must be submitted six weeks in advance of next issue date. POSTMASTER: Address Service Requested. Send address changes to Los Angeles Lawyer, P. O. Box 55020, Los Angeles CA 90055. 06.13 VISIT US ON THE INTERNET AT www.lacba.org/lalawyer E-MAIL CAN BE SENT TO [email protected]

EDITORIAL BOARD Chair DENNIS PEREZ Articles Coordinator PAUL MARKS JERROLD ABELES (PAST CHAIR) K. LUCY ATWOOD ETHEL W. BENNETT ERIC BROWN CAROLINE BUSSIN PATRICIA H. COMBS CHAD C. COOMBS (PAST CHAIR) ELIZABETH L. CROOKE HON. MICHELLE WILLIAMS COURT BEN M. DAVIDSON ANGELA J. DAVIS (PAST CHAIR) GORDON ENG DONNA FORD STUART R. FRAENKEL CHRISTY GARGALIS MICHAEL A. GEIBELSON (PAST CHAIR) GABRIEL G. GREEN SHARON GLANCZ TED HANDEL JEFFREY A. HARTWICK STEVEN HECHT (PAST CHAIR) JOSHUA S. HODAS GREGORY JONES MARY E. KELLY KATHERINE KINSEY KATHRYN MCGUIGAN AMY MESSIGIAN MICHELLE MICHAELS COMM. ELIZABETH MUNISOGLU RICHARD H. NAKAMURA JR. (PAST CHAIR) CARMELA PAGAY GARY RASKIN (PAST CHAIR) JACQUELINE M. REAL-SALAS (PAST CHAIR) DAVID SCHNIDER NANCY L. SCHROEDER STEVEN SCHWARTZ MAYA SHULMAN HEATHER STERN KENNETH W. SWENSON (PAST CHAIR) MATTHEW D. TAGGART DAMON THAYER THOMAS H. VIDAL

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Copyright © 2013 by the Los Angeles County Bar Association. All rights reserved. Reproduction in whole or in part without permission is prohibited. Printed by R. R. Donnelley, Liberty, MO. Member Business Publications Audit of Circulation (BPA). The opinions and positions stated in signed material are those of the authors and not by the fact of publication necessarily those of the Association or its members. All manuscripts are carefully considered by the Editorial Board. Letters to the editor are subject to editing.

4 Los Angeles Lawyer June 2013 LOS ANGELES LAWYER IS THE OFFICIAL PUBLICATION OF THE LOS ANGELES COUNTY BAR ASSOCIATION 1055 West 7th Street, Suite 2700, Los Angeles CA 90017-2548 TRUST DEED FORECLOSURES Rosevart Nazarian Telephone 213.627.2727 / www.lacba.org “Industry Specialists For Over 25 years” ATTORNEY, MEDIATOR, ARBITRATOR LACBA OFFICERS t Witkin & Eisinger we specialize in the Non-Judicial President AForeclosure of obligations secured by real property RICHARD J. BURDGE JR. or real and personal property (mixed collateral). When President-Elect your clients needs a foreclosure done professionally and PATRICIA EGAN DAEHNKE at the lowest possible cost, please call us at: Senior Vice President 1-800-950-6522 LINDA L. CURTIS We have always offered free advice to all attorneys. Vice President Providing the Most Affordable PAUL R. KIESEL WITKIN Mediation & Arbitration Services Treasurer SM MARGARET P. STEVENS &EISINGER, LLC 818.500.7500 ! Assistant Vice President RICHARD G. WITKIN, ESQ. CAROLE EISINGER www.WWMediators.org BRIAN S. CURREY Assistant Vice President CHRISTINE C. GOODMAN Immediate Past President ERIC A. WEBBER Executive Director/Secretary SALLY SUCHIL Associate Executive Director/Chief Financial Officer BRUCE BERRA Associate Executive Director/General Counsel W. CLARK BROWN BOARD OF TRUSTEES FAY ARFA P. PATRICK ASHOURI ROBERTA B. BENNETT ORI S. BLUMENFELD BRIAN K. CONDON DUNCAN W. CRABTREE-IRELAND JEFFERY J. DAAR ANDREW S. DHADWAL DAVID C. EISMAN HOWARD S. FREDMAN RICHARD B. GOETZ DAVID GURNICK JACQUELINE J. HARDING ANGELA S. HASKINS HARUMI HATA ROBB EVANS & ASSOCIATES LLC LAWRENCE C. HINKLE II Fiduciaries, Asset Managers & Consultants EVAN A. JENNESS SAJAN KASHYAP HELEN B. KIM ANNOUNCES THE SALE OF MARK A. KRESSEL MICHAEL K. LINDSEY CENTENNIAL BANK MANUEL A. MEDRANO Fountain Valley, California JANICE E. MUNOZ JUAN A. RAMOS To DAVID K. REINERT DEBORAH C. SAXE DONALD P. SCHWEITZER WESTERN ALLIANCE BANCORP BRUCE I. SULTAN Phoenix, Arizona STEVEN K. YODA AFFILIATED BAR ASSOCIATIONS Robb Evans, in his capacity as Trustee of LandAmerica Financial Group, BEVERLY HILLS BAR ASSOCIATION was the sole shareholder of Orange County Bancorp. Centennial Bank CENTURY CITY BAR ASSOCIATION CULVER MARINA BAR ASSOCIATION was a subsidiary of Orange County Bancorp. Mr. Evans was advised by GLENDALE BAR ASSOCIATION IRANIAN AMERICAN LAWYERS ASSOCIATION BINGHAM MCCUTCHEN LLP ITALIAN AMERICAN LAWYERS ASSOCIATION JAPANESE AMERICAN BAR ASSOCIATION and JOHN M. LANGSTON BAR ASSOCIATION KOREAN AMERICAN BAR ASSOCIATION OF SOUTHERN CALIFORNIA LESBIAN AND GAY LAWYERS ASSOCIATION OF LOS ANGELES SANDLER O’NEILL & PARTNERS MEXICAN AMERICAN BAR ASSOCIATION PASADENA BAR ASSOCIATION 11450 Sheldon Street, Sun Valley • CA 91352-1121 (818) 768-8100 SAN FERNANDO VALLEY BAR ASSOCIATION SAN GABRIEL VALLEY BAR ASSOCIATION www.robbevans.com SANTA CLARITA VALLEY BAR ASSOCIATION SANTA MONICA BAR ASSOCIATION SOUTH BAY BAR ASSOCIATION SOUTHEAST DISTRICT BAR ASSOCIATION APRIL 30, 2013 SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION WHITTIER BAR ASSOCIATION WOMEN LAWYERS ASSOCIATION OF LOS ANGELES

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Enjoy an historically healthy and sus- had a recent conversation with my neighbor that got me tained revenue stream, with a lower cost of living and great life style. thinking about a topic that is not on my horizon but is Access to year-around recreational important nonetheless—retirement. My neighbor, a non- activities. Control your professional I life, don’t let it control you. practicing lawyer working in the corporate world, had just Call Ed Poll 800.837.5880 @ accepted a new position with another large, multinational cor-

poration. He said, “Since I am almost 50, and I know corporations tend to move people out in their 60s, I could not pass up this new opportunity.” My neighbor then mentioned that he will probably consider a consulting practice once he is in his 60s. BUSINESS At what age should we as lawyers consider retirement? One telling statistic is that OPPORTUNITY the average age at which Americans expect to retire has been steadily creeping up since the mid-1990s. In 1996, people expected to retire at age 60, but according to a new Gallup poll, the expected age of retirement for most Americans is now up to Want to purchase 67. Interestingly, another Gallup survey found that people who are currently under minerals and other 40 expect to retire at 65 and those of us who are 40 and over, and not yet retired, oil/gas interests? expect to retire at age 68. The primary reason stated for working longer is money— people did not think they had enough money to live comfortably in retirement. Send details to: With the baby boomer bubble advancing in years, approximately one-third of California’s active attorneys are older than 55. and 21 percent are older than 60. P.O. Box 13557 Denver, CO 80201 As one 65-year old member of the State Bar recently stated, “65 is the new 55, and there is no doubt I intend to continue working.” If that is the case, the ability to “continue working” may depend on where you practice. A recent survey revealed that 37 percent of all law firms surveyed had a mandatory retirement age, and 57 percent of the law firms of 100 or more attorneys had a mandatory retirement age. A relatively small percentage of law firms having fewer than 10 attorneys had a JUDGE mandatory retirement age. Seventy years was the common mandatory retirement age. LAWRENCE W. CRISPO As lawyers approach retirement (or, as some call it, the “next phase”) with finan- (RETIRED) cial considerations aside, the possibilities are virtually limitless. A lawyer can choose to continue working, maintaining an active client base and working at the same pace as in prior years. A subtle alternative to this is to maintain an active practice but with a shift in attitude and a commitment to spend more time with family and increase time outside of the office. Alternatively, a lawyer may choose to take on such new interests as volunteering for nonprofits, returning to school, developing new hobbies (or resurrecting old hobbies) and getting involved in any number of outside activities unrelated to the law. There is a certain excitement about thinking of these and many other options as we approach our 60s and 70s. Since this will wrap up my year as chair of the Los Angeles Lawyer Editorial Board, I want to thank and give credit to all of the other members of the board who gave so generously of their time so that Los Angeles Lawyer could maintain its position as one of the best legal magazines in the country—whether ranked on quality of content, member involvement, or service to its association. Thanks also to Sam Lipsman, our tireless leader, and to Eric Howard, who has stepped up when needed and provided leadership to help us continue to make the magazine so successful. Of course, I owe gratitude to my wife for putting up with me during those late nights in front of the computer doing the magazine’s deadline-driven business. Our new chair, Paul Marks, will no doubt carry on the Los Angeles Lawyer tra- Mediator Arbitrator dition of excellence with the continued hard work and professionalism of the Editorial Board to support him. I

Referee 213.926.6665 www.judgecrispo.com Dennis L. Perez is a principal in Hochman, Salkin, Rettig, Toscher & Perez, PC. He is the 2012-13 chair of the Los Angeles Lawyer Editorial Board.

6 Los Angeles Lawyer June 2013 barristers tips BY ANDREA AMBROSE LOBATO

Steps for Preparing for Appellate Oral Argument

PREPARING FOR YOUR FIRST appellate oral argument can be daunt- the court may ask and practice your responses. ing. What if a justice asks a curve ball question, and you do not know Oral argument is an exchange of views; it is not a speech. You must the answer? What if the justices do not ask any questions at all? The expect that the justices will ask you questions about the weakest part possible scenarios are almost infinite, and the thought of how to pre- of your case in order to test their theories of the case. To prepare for pare for all of them is enough to send any lawyer into a tizzy. Several that, you should come up with a list of all the hardest questions that months ago, while preparing for my first oral argument in the court the court could ask you and prepare what your responses will be, being of appeal, I asked the experienced oral advocates in my firm what they honest with yourself about your opponents’ best points and the do to prepare. I learned that everyone has their own way of doing weaknesses in your own case. Then ask yourself if your answers to things. Taking into account all of the advice I received, what follows the tough questions you pose would satisfy you if you were sitting is a suggested plan for preparing for your first appellate argument. as a jurist. Practice your answers aloud. First, start by rereading the briefs. When you receive the notice scheduling oral argument, it probably will have been a long time since you have read them. To refresh your The shorter outline should include only the most important memory, the best place to start is by rereading the briefs and reminding yourself of the arguments made by each side and by any amici arguments and facts in the case, stripped to their essentials. curiae. While you are reading the briefs, make sure to flag the cases and the parts of the record that seem most important. Sometimes you will encounter a “cold bench.” On occasion an At this point, you may think of new angles to approach the case appellate court will not ask you any questions at all. To prepare for or new responses to the other side’s arguments that you did not that possibility, you should create and practice a two- or three- articulate in your brief. Take note of those ideas. During oral argu- minute speech that covers the main points that you want to convey ment, the justices do not simply want to hear you recite the arguments to the court. Then ask the court if it has any questions for you. If not, that they have already read in your briefs. They want a fresh, distilled and if you are representing the appellant, be sure to reserve some time oral presentation of the essential reasons why your client should for rebuttal. On rebuttal, be ready to respond to any questions asked prevail. If you incorporate these new ideas or angles into your pre- of your opponent. sentation, you will make the argument more interesting and poten- Another preparatory step is a moot court. It can be extremely help- tially more helpful for the court. Do not, however, advance completely ful in preparing for oral argument because it gives you practice, in a new arguments that have not been raised in your briefs. That is not comfortable environment, with thinking on your feet and talking about permitted. the case. The best time to hold a moot court is a few days before the argument, after you have reviewed all the materials and prepared your Find the Keys outline and questions. Recruit other attorneys from your firm to Next, gather the key parts of the record and the cases and other author- play the role of justices and ask them to read the briefs and think of ities that you have flagged. At this stage, it is helpful to assemble only questions before the moot court. Following the moot court, prepare the most crucial documents. Read through these materials and answers to any difficult questions that arose that you had not already become extremely familiar with them. Next, create an outline of your considered. argument, including all the key facts, issues in the case, summaries You will probably be nervous for your first argument. This is nor- of cases, quotations from the record, and anything you think is rea- mal. If you have followed all the steps outlined here, the odds are that sonably likely to come up at oral argument. Nothing is more essen- you will be prepared for almost any questions that come your way. tial to mastering your argument than creating and studying this out- However, there is always a possibility that the justices will send a curve line in the week or two before the argument. This outline may be many ball your way. If you truly do not know the answer to a question, do pages long. not guess. Tell the court frankly that you do not know the answer and Next, condense the long outline into one or two pages to take with offer to file a supplemental brief to answer that question. you to the lectern during oral argument. This shorter outline should Finally, remember to breathe deeply and speak—not too quickly— include only the most important arguments and facts in the case, in a loud, clear voice. Rely on your preparation and and be flexible. stripped to their absolute essentials. Once you have prepared the short Oral argument is, after all, a verbal exchange with people about a topic outline, practice your argument as much as you can. The short out- about which you and they know a great deal. I line is critical because you will not have time to reference your long outline while presenting argument. Brainstorm questions that you think Andrea Ambrose Lobato is an appellate attorney at Horvitz & Levy LLP in Encino.

8 Los Angeles Lawyer June 2013 RICHARD EWING Evaluating DAPTs for California Residents practice of limitationsperiod. tlor’s creditors. assetsareshieldedfromtheset- soning” periodbeforethetrust attention toisthelengthofstatutelimitations—thatis,“sea- to considerarethestatuteoflimitationsandexceptioncreditors. ciaries. ofthebenefi- party beneficiariesandprotectassetsfromcreditors trusts, althoughthisstateallowsasettlortoestablishtrustforthird- California hasnotjoinedtheranksofstatesofferingself-settled tlements ofdivorcing spouses,alimony, childsupport,andpreexisting set- tor provisionsgenerally taketheformofcarve-outs forproperty able statuteoflimitationsperiod hasexpired.Theexceptioncredi- thetrustevenifapplic- state andenablecertaincreditors topierce for potentialprotection. real property orthefiling ofafinancingstatement. is madeofthetransfer, oftheconveyance including the recording is deemedtohavediscovereda transfer atthetimeapublicrecord potential discoveryextensioniseffectivelylimitedbecauseacreditor the bottomamongstateliabilitysystems, tion, a2012surveyonstatelawsuitclimatesrankedCalifornianear income taxratewillincreasetothetopinnation.Inaddi- WITH THERECENT PASSAGE OFPROPOSITION30, cent ofthepaymentstowhichbeneficiaryisentitled. against athir asset protectionlaws,acourtcanordertrusteetosatisfyjudgment a settlor vision pertaining tothesettlor’s interest is invalidandwillnotshield laws. tur ers forself-settledtrust formation becauseoffavorablestatutory fea Nevada, Alaska,SouthDakota,andDelawarehaveemergedasthelead- latur jurisdiction where thetrustisestablished.Althoughmanystatelegis- a spendthriftprovision,and4)atleastonetrusteemustresideinthe lor mustnotbemandatory, 3)thetrustmustbeirrevocable andinclude fer tothetrust cannotbefraudulent,2)trust distributionstothesett tection trusts(DAPTs) vary, commonconditionsinclude1)thetrans- California 48thforworstbusinesstaxclimate. in itsStateBusinessTax ClimateIndexforFiscalYear 2013,ranked period—two years. seasoning Nevada andSouthDakotaprovidedfortheshortest Ohio’s DAPTlegislation andits18-monthstatuteoflimitations, discovers orreasonably shouldhavediscovered thetransfer. the dateoftransferassetsor2)sixmonthsaftercreditor an actiontochallengethetransferwithinlaterof1)twoyearsfr the transfertotrust,whilepre-existingcreditorsmustcommence recover thetransferredassetsbeginningtwoyearsfromdate of es andlegislaturesthatarecommittedtoupdatingself-settledtrust In selectingtheappropriateDAPTjurisdiction,onefactortopay The types of exception creditor carve-outsvaryfromstateto The typesofexceptioncreditor In lightofthesefacts,Californiaresidentsmaylooktoanotherstate es haveadoptedself-settledtrust laws,theyarenotallcreatedequal. 7 When choosingaDAPTjurisdiction,twoimportantvariables 3 ’ s assetsfromcreditors. Nonetheless, ifthesettlorisabeneficiary, aspendthriftpro- d-par 8 Most DAPTstateshaveathree-orfour-year statute ty benefi 10 tips Regar 9 6 On theotherhand,untilrecentarrivalof Although statestatutesfordomesticasset-pro- ciar ding future creditors,Nevadabarssuitto ding future 4 y inanamountnotexceeding25per- As afurther limitationonCalifor 1 and theTax Foundation, 12 2 Furthermore, California’s 5 11 This nia’s om - - preexisting tort creditors. jurisdictions (otherthanDelaware)donotincludeanexceptionfor tort creditors.ThestatutesoftheaforementionedleadingDAPT U.S. Constitution. of theBankruptcyCodeand“fullfaithcredit”clause the be contested,however, Section548(e) twoofthelikelygroundsare reported casestendtobelongthebadfactvariety. ShouldaDAPT exists. There are likelytensofthousandsDAPTs, butthefew fully adjudicatedcaselawdecidingthevalidityofaDAPTstatuteyet Although thefirstDAPTstatutewasenactedalmost15yearsago,no Potential totheDAPT Challenges not anappropriatecandidatefora self-settledtrust,andproperlycoun- in credit carddebtduring thosefouryears.Inshort,Mortensenwas when hewas“underwater,” andheassumedmore than$250,000 Alaska’s four-year statuteoflimitationsperiod.Hecreated thetrust afterthepassageof tection trustagreementandfiled forbankruptcy not surprising. under Section548(e).Inlightoftheegregiousfacts,resultwas fromMortensentoanAlaskaDAPTwouldbeavoided fer ofproperty belonging tothebadfactcategory. concludedthatthetrans- Thecourt for DAPTs. Commentatorshaveclassifiedthecase,however, as Bankr Provident Trust Group inLas Vegas. Neil Sc The recentcaseof Mortensen, whowasnotanattorney, draftedhisownassetpro- uptcy CodeSection548(e)andits10-yearclawbackpr hoenb lum isseniortrust officer, andJason Helquist president, with Battley v. Mortensen 13 BY NEILSCHOENBLUMANDJASONHELQUIST Los Angeles Lawyer 14 was thefirsttoapply June 2013 ovision 9 seled clients rarely invoke voluntary bank- Nevertheless, creative minds are constantly income taxpayers with taxable income greater ruptcy.15 As for the threat of involuntary searching for alternatives, and one alternative than $1 million. This increase is retroactive to bankruptcy, those petitions made up a minus- to the traditional DAPT is the Hybrid DAPT, January 1, 2012. In addition, rates have gone cule percentage of all filings from 2006 to in which the settlor is not included as an ini- up one to three percentage points for California 2010. Even if a DAPT settlor lands in bank- tial discretionary beneficiary of the trust.26 residents earning more than $250,000 a year. ruptcy court, a creditor must still prove under Instead, the settlor can be added as a benefi- The cumulative effect of these taxes over many Section 548(e) that the debtor had an actual ciary later.27 The Hybrid DAPT trust is estab- years will be quite substantial and represent an intent to hinder, delay, or defraud. lished for the benefit of third parties, such as avoidable depletion of the taxpayer’s wealth. Some commentators also look to full faith the settlor’s spouse and descendants. Because Unlike California, many of the top asset pro- and credit and choice-of-law principles as it is established as a third-party trust, the tection jurisdictions do not impose a state potential weaknesses of DAPTs.16 Their argu- Hybrid DAPT likely removes some of the income tax. A California settlor may therefore ment is that a non-DAPT court may cite these uncertainty of a traditional DAPT.28 If the consider either transferring some income-earn- public policy principles as grounds for apply- need should arise, the settlor may access the ing assets into a trust that is located in one of ing its own state’s law rather than that of the trust assets via his or her spouse. Should the the aforementioned jurisdictions or migrating DAPT’s home state and enter a judgment for settlor not have a spouse or descendant who an established California trust to one of those the creditor. However, as one leading com- will share the trust assets, the trust instrument jurisdictions.31 mentator has suggested, the “full faith and may allow for a trust protector or indepen- With proper planning, a California sett- credit” clause actually “may be more of a ben- dent trustee to add additional beneficiaries— lor could take advantage of one of the efit than a burden to a domestic APT.”17 for example the settlor. enhanced self-settled laws of those jurisdic- One reason is that to enter a judgment for Once the settlor is added as a discretionary tions,32 while at the same time recognizing the creditor, the non-DAPT court must have beneficiary, the trust resembles a traditional significant tax savings vis-à-vis accumulated appropriate jurisdiction, such as in rem juris- DAPT. Nonetheless, as an added layer of pre- nonsource ordinary income and capital gains diction over trust assets or personal jurisdic- caution, if a settlor senses that a creditor claim of a nongrantor trust. As a starting point, the tion over a trustee. This could become an is looming or is contemplating filing for bank- trust should avoid grantor trust status, since obstacle if trust assets are outside the forum ruptcy, the settlor may request before either of settlors generally must report income of these state or the corporate trustee does not have the foregoing transpires that the trust pro- trusts on their personal state income tax sufficient minimum contacts with the non- tector or independent trustee remove him or returns. California’s criteria for taxing a non- DAPT state. Even if the non-DAPT court her as a discretionary beneficiary.29 grantor trust is set forth in Revenue and Tax has jurisdiction and applies its own law,18 the The Hybrid DAPT also addresses the Code Section 17742(a).33 In addition to the story is not over.19 First, a DAPT court may aforementioned potential challenges to tra- California resident trustee and noncontin- not need to give full faith and credit to the ditional DAPTs—Section 548(e) and non- gent beneficiary bases for taxation, the state judgment of a non-DAPT-forum court, since DAPT courts’ not recognizing another state’s also taxes the California-sourced income of the facts of some cases may require the appli- DAPT laws. With respect to Section 548(e), a trust.34 cation of another state’s law rather than the Hybrid DAPT does not appear to come With respect to the basis of the California forum law.20 Second, should a DAPT court within the purview of the Bankruptcy Code’s source income of a trust, Revenue and Tax need to give full faith and credit to a judg- 10-year clawback provision. Indeed, Section Code Section 17742(b) clarifies that the res- ment, the DAPT jurisdiction still can estab- 548(e) and its clawback apply if, among idence of a corporate fiduciary of a trust lish its own enforcement procedures.21 other conditions, the transfer was made to a refers to “the place where the corporation Further, as more states pass self-settled trust self-settled trust or similar device and the transacts the major portion of its adminis- legislation, a non-DAPT court may have more debtor is a beneficiary. Since the settlor is tration of the trust.”35 In order to try to difficulty using public policy arguments as a not an initial beneficiary of a Hybrid DAPT avoid resident trustee status, a settlor of a way to ignore another state’s DAPT laws.22 or, if added, may be removed before filing for DAPT may look for a non-California trustee Additionally, lost in the overreaction to bankruptcy, it would likely be harder to argue in a DAPT jurisdiction to administer the Mortensen is the fact that, in creating a 10- that the Hybrid DAPT should be subject to trust. If, however, the settlor also desires a year clawback provision for fraudulent trans- the Section 548(e) clawback. For this rea- California trustee, Section 17743 provides fers to DAPTs, Congress impliedly autho- son, the Hybrid DAPT may also make it that, when taxability is based on the trustee’s rized those transfers that lack such intent. more difficult for a non-DAPT jurisdiction to residence and there are two or more trustees ignore the laws of another state, since the trust (and some are California residents), the tax- Do DAPTs Work? is not self-settled (assuming that the settlor is able income is apportioned according to the In light of the absence of case law addressing not a beneficiary at the relevant time). number of California trustees.36 DAPTs, a California resident may ask whether The Hybrid DAPT also raises the possi- Regarding the resident beneficiary basis of a DAPT works. In making this determination, bility of bifurcation of the trust, for the pur- taxation, the relevant inquiry will be whether a settlor must consider the appropriate gauge pose of extra protection, into two separate one or more California beneficiaries are non- of success. With asset protection planning, trusts: the Clean Hybrid DAPT and the Dirty contingent.37 The California Code of Regula- “[T]he ultimate goal…is realized if the client Hybrid DAPT. This bifurcation will enable the tions specifies that a noncontingent benefi- weathers a legal storm at least moderately bet- settlor to be added as a beneficiary of the Dirty ciary is “one whose interest is not subject to ter than he otherwise would have in the Hybrid trust while not tainting the assets of a condition precedent.”38 In a 2006 Technical absence of any planning.”23 A DAPT’s pro- the Clean Hybrid DAPT, of which the settlor Advice Memorandum, the California Franchise tections should encourage an early settle- will not be named as a beneficiary.30 Tax Board provided further guidance: “A res- ment, a settlement for few cents on the dol- ident beneficiary whose interest in a trust is sub- California Income Tax lar, or no claim at all.24 The lack of reported ject to the sole and absolute discretion of the cases deciding whether a creditor can pierce As a result of Proposition 30, the previous top trustee holds a contingent interest in the trust. a properly created DAPT may well indicate California income tax rate of 10.3 percent has The exercise of the trustee’s discretionary that DAPTs are working.25 been increased to 13.3 percent for all personal power is a condition precedent that must occur

10 Los Angeles Lawyer June 2013 before the beneficiary obtains a vested interest directed trust model results in lower trustee California residents face the highest top in the trust. Once the trustee decides to dis- fees, since the corporate trustee’s role, espe- income tax rate in the nation and a state lia- tribute income in a specified amount, the ben- cially for investment decisions, is limited. bility system that may leave them vulnerable eficiary has a non-contingent, vested interest Admittedly, it remains unsettled whether the to frivolous lawsuits, but they may address in the trust, but only for that amount.”39 use of a California investment adviser is a suf- these concerns by establishing a DAPT in Accordingly, in order to try to avoid the ficient nexus with California to trigger income another state. With sufficient planning, California tax (until the time when income is taxation.43 Californians may even be able to establish actually distributed to a California benefi- California is a community property state. trusts to last for generations (if not forever) ciary), effort must be made to ensure that the So how can a DAPT work for a married set- potentially free from state income taxes and DAPT trustee’s discretionary power over dis- tlor, especially since the community prop- federal transfer taxes. I tributions is not compromised. erty ownership must be recognized, as a federal constitutional matter, by the other states? 1 See, e.g., Claudia Buck, Prop. 30 to Deliver Hefty Dynasty Trusts and Directed Trusts The simple answer is that community prop- Tax Hike to State’s High Earners Next Year, In California and elsewhere, “fiscal cliff” erty rights need to be transmuted into sepa- SACRAMENTO BEE (Nov. 19, 2012), available at http://www.sacbee.com/2012/11/19/4996004/prop-30 planning saw a rush of settlors looking to cre- rate property before or contemporaneously ate dynasty trusts to leverage the then-current with the DAPT planning.44 (Continued on page 20). transfer tax exemption amounts for hundreds of years or in perpetuity and thereby lock in benefits in the event of a future rein- statement of lower exemption amounts. The Strategic Litigation Services opportunity to “lock in” those benefits still remains, however, since the American Tax- Steve Hyman is a retired Philadelphia prosecutor now living in Los Angeles. For 17 years he payer Relief Act of 2012 did not alter trans- planned and supervised complex white-collar investigations, organized massive document cases, and strategized how best to present those cases to juries. fer tax exemption amounts. California, however, has enacted the Uniform Statutory Rule Consulting services covering the litigation spectrum from investigation to trial, inluding: Against Perpetuities, which employs a 90- Investigation Design Information Mapping Witness Preparation year wait-and-see period.40 Unlike California, Theory Framing Jury Persuasion many of the leading trust jurisdictions— Offered to private and government counsel engaged in the investigation, litigation, or preparation including Nevada, South Dakota, Delaware, for trial of complex civil or white-collar criminal matters. and Alaska—have either abrogated or mod- ified the rule against perpetuities to allow tel 310.804.0916 | e-mail [email protected] | www.strategiclitigationsupport.com for dynastic trusts. Accordingly, by establishing a dynasty trust in one of these jurisdictions, the dynasty trust can potentially grow free of state income tax and federal transfer taxes, while providing asset protection for centuries or in perpetuity. In order to try to effectuate asset protection and income tax minimization goals, a California settlor will need to appoint an out-of-state trustee (most likely a corporate trustee, in order to take advantage of dynastic trust capabilities). While a California settlor may have some reservations about rely- ing on an out-of-state trustee, these concerns may be abated by the fact that many of the jurisdictions that the settlor will be considering have adopted directed trust statutes. The directed trust model allows the settlor to appoint an out-of-state corporate trustee, while having a trusted adviser or protector retain control over many of the traditional CORPORATE COUNSEL’S GUIDE duties of the trustee. COMINGI N TO CALIFORNIA LAW FIRMS Under Nevada law, for example, a settlor AND ATTORNEYSATTORNEYS SEPTEMBER can appoint an investment trust adviser to “[d]irect the trustee with respect to…the When it comes to business development strategies, nothing investment and reinvestment of principal and is as important—or as di!cult—as gaining the attention of in-house counsel. income.”41 Additionally, Nevada provides that a trust protector may be given powers, The Los Angeles County Bar Association and Los Angeles including the power to remove and appoint Lawyer magazine provide you with a unique opportunity to reach this elusive market in a special pullout section. a trustee or trust adviser, modify the terms of any power of appointment, and modify or amend the trust to achieve a more favorable CONTACT LINDA BEKAS AT 213.896.6504 FOR ADDITIONAL INFORMATION. tax status.42 As an added advantage, the

Los Angeles Lawyer June 2013 11 practice tips BY NEVILLE L. JOHNSON

To Find Employment as a Lawyer, You Must Market Yourself

I AM APPROACHED WEEKLY by law students and young lawyers seek- ting to know judges off the bench. By participating in community activ- ing advice about finding legal employment in the entertainment indus- ities you should establish a reputation as a competent, intelligent attor- try or growing a practice. When I started out, career guidance was hard ney and make mutual and lasting friendships. You will be surrounded to obtain, which is why I take the time to advise those who contact me. by other highly motivated lawyers who are also there to further Moreover, it enhances goodwill and may lead to referral business for their careers, learn what goes on behind the scenes in your field of my firm. My most important recommendation, one that applies to vir- law and the business community, hear of job opportunities, and get tually any endeavor, is that you are misguided to think the world will up to speed on legal developments. In their company, you will bet- beat a path to your doorstep because you are an intelligent person, a ter understand the legal and business power structure of your field hard worker, or did well in school. You must market yourself. and the community in which your services are offered. Those in the Studies have shown that it takes up to four interactions between first 10 years of practice should join the barrister groups that are asso- two people for recognition to set in and a rapport to be established, which is why it is not just important but necessary for new lawyers to join bar associations and relevant sections and sit It takes up to four interactions between two people for recognition on their executive committees. By bar associations, I include county, city, and specialty ones. The Consumer Attorneys Association of to set in and a rapport to be established. Los Angeles, for example, is the best plaintiff’s bar association in the country and has an invaluable listserve. Any association in your field of interest or loca- ciated with their bar associations. Many of those who were on bar- tion is worthwhile. Shaking hands and giving someone a business card, rister committees when I started practicing law are now superior court however, will not get you noticed. Being on an executive committee, and federal judges or extremely successful attorneys and bar leaders. on the other hand, guarantees that you will regularly rub shoulders Referrals with movers, shakers, and go-getters. Constant interaction will provide multiple opportunities to create and maintain social and busi- What they do not teach in law school is that referral fees can be ness relationships with others who have similar interests as you. extremely lucrative, even into seven figures! An attorney must have Therefore, get on a committee and get on its leadership track. extensive knowledge and experience in his or her relevant field of practice and know to whom to refer matters outside of personal areas of Which Associations? expertise. If a good case comes your way, send it to a top attorney As your first task, investigate which bar associations will provide the and take a referral fee—or, alternately, act as cocounsel with the attor- most meaningful value. Joining a county bar association is mandatory, ney and further your experience and education. By having relation- as it will provide an immediate education about who has influence and ships with other attorneys, referrals can come to you. A lawyer in your what are the issues of the day that concern the profession. Family law, field may have a conflict, be unwilling to work on a contingency basis, for example, is a tightly knit practice area. A practitioner in that or the case may be too small for the counsel making the referral. Be arena must be a member of family law sections as a way of keeping the go-to attorney when that happens by having established a mean- up with advancements in the law, networking, and marketing. ingful relationship with your referring friend or business acquaintance. Read legal newspapers to keep up on the latest verdicts and opin- Distinguish yourself by demonstrating expertise in a specific area ions so you can see which plaintiff or defense lawyer is clobbering the that will lead to a better reputation and possibly employment. Develop other and for the profiles and news about attorneys and judges. a niche expertise. Give talks and moderate panels on a current hot legal Being informed about who is who is part of the job of being a lawyer, topic. Nurture and accept opportunities to speak on issues in your area as is knowledge of the business of law. This knowledge gives you cred- of practice to students, social organizations, and groups that share an ibility when you discuss current goings-on with others. Doing research interest in those issues. Write articles for law reviews, legal newspa- enables you to target those you want to know, possibly meet, or at pers, and for the public at large. Consider writing an online blog that least know about. This kind of research gives you overall awareness is relevant to your area of interest or an article that can be on your of the legal landscape. or another lawyer’s Web page. Your fellow lawyers (including adversaries and those you view as Obtain the guidance of a mentor or mentors with expertise in your competitors) are your comrades and colleagues when you work toward common goals that better justice, the profession, and the com- Neville L. Johnson is a founding partner at Johnson & Johnson LLP in Beverly munity. You can assist by putting on programs and interacting with Hills. Ashley Hunt, a student at Loyola Law School, and Melanie-Anne Therese the top lawyers whom you would not ordinarily encounter and get- Padernal contributed to this article.

12 Los Angeles Lawyer June 2013 area of interest. You will find them by tapping tional, an amateur athletic association, an to do so, do not cause offense or be rude, into your alumni pool, family friends, em- alumni association or a philanthropic organ- because doing so may result in a missed ployers past and present, and by forming ization, develop relationships with those who opportunity for business. relationships via the bar associations, or even can refer business to you or may have an Jobs are hard to find, so you may have to by cold-calling someone for advice. Many issue or matter for you to resolve. A good job accept one in a field of practice that is not experienced attorneys will help when they done for a service group shows off good your ideal. If so, give it your all, learn all you are approached in a respectful and profes- character traits and infers competency and can, and when appropriate move to a more sional manner. A relationship built with an skill as a lawyer. desirable employer. Pro bono work can even- adviser may lead to permanent employment A relatively new phenomenon is the rise tually lead to paying work. or an opportunity to cocounsel on a matter. of social networking groups that host weekly Some of you will work at firms where you Also, there is nothing wrong with contacting or monthly meetings to generate business are not expected, needed, or desired to bring a potential employer more than once after a for their members through regular, struc- in business, but you may have an expectation reasonable interval of time has passed. tured interaction. For some lawyers, espe- of going out on your own or joining another Networking within your field is manda- cially those starting their careers, they are firm. The suggestions above apply to you tory. Attend events at which you mingle with excellent sources for business, especially in who so aspire. As you grow as an attorney, those engaged in the business in which your family law, personal injury, and estate plan- never stop networking, learning, and subtly services are of value. For example, female ning. Wherever you are, and at any social marketing yourself. You are developing a entertainment attorneys in the audio-visual gathering, you are on duty. You are always reputation that you must always be building arena should join Women in Film and Inde- a lawyer, and you must conduct yourself and burnishing. When you do a good job, pendent Film, two organizations that pro- with appropriate grace and dignity. Your others notice—including opposing counsel. mote education and networking. Join orga- next client may be the person with whom you When they have a client, friend, or family nizations and attend events in and outside of nonchalantly converse at a casual social member who needs services of the type you your respective field of interest and the law event or who sits next to you on an air- render, be at the top of their list. community. Once you are a member of orga- plane. Always have your business cards on With the exception of those who attend nizations that are not oriented to lawyers, be you so it is easier for potential clients or the nation’s elite schools or graduate at the active, as the benefits are similar to being on business contacts to reach you. Be careful very top of their classes, everyone starts from the executive committee of a bar group. Let what you say to those who are not intimate scratch. Put in the effort, be disciplined and people get to know you in a nonthreatening, friends or family, as you never know how patient, and you will achieve your goals. As social environment. Everyone you meet is a many degrees of separation lie between the you grow in practice, pay it forward. Help potential client. At a church, a synagogue, a object of your reference and the person to those who seek your advice and wisdom as serviceCWSL_BBB13_LALawyer_02.qtrpg organization such as Rotary Interna-_Layout 1 4/8/13whom you10:34 are AM speaking. Page 1 Even when tempted they make their way in our profession. I

Preparing students to meet the needs of clients and the legal profession

Deborah Dixon ’07 Partner Wingert Grebing Brubaker & Juskie, LLP “I AM READY.”

independent / innovative / inspiring Learn more about Deborah at www.cwsl.edu/IamReady

Los Angeles Lawyer June 2013 13 by Don Chomiak

SellAREer TheBEW consumer-friendly Interstate Land Sales Full Disclosure Act imposes strict disclosure requirements on developers

ATTORNEYS REPRESENTING condominium buyers who are pur- claim to date. This is true, in part, because California has its own reg- chasing units in large, yet-to-be-built urban developments in Los ulatory scheme governing the marketing and sale of units in devel- Angeles County should familiarize themselves with a little-known fed- opments involving ﬁve or more lots or parcels under California’s eral statute called the Interstate Land Sales Full Disclosure Act Subdivided Lands Act (SLA).5 The SLA requires that developers pro- (ILSA),1 which may prove invaluable if the condominium to be pur- vide buyers with a true statement of the terms and conditions for the chased turns out to be something other than what was promised. sale of real property. However, when ILSA and the SLA both apply Enacted in 1968, ILSA is a federal consumer protection law to a California development, a developer’s failure to make certain fed- designed to prevent false and deceptive practices in the sale of unim- erally mandated disclosures may result in the imposition of a two-year proved tracts of land by requiring developers to disclose information rescission right for buyers.6 needed by potential buyers.2 ILSA accomplishes its goal by imposing ILSA is based on the full disclosure provisions and philosophy of rescission rights for up to two years from the date of contract sign- the Securities Act of 1933, which it resembles in many respects.7 The ing for the beneﬁt of buyers if the developer or its agent fails to make statute also provides for a private right of action that allows consumers certain disclosures.3 to bring lawsuits against developers and their affiliates for ILSA vio- ILSA’s reach is not limited to the named developer, which is often lations.8 Courts interpreting ILSA’s language are to read the lan- little more than an empty shell corporation set up by the real parties guage broadly to effectuate the statute’s remedial goals.9 developing the property. Other entities and individuals can be liable if they are deemed “indirect sellers” and therefore developers under Don Chomiak is the principal of Talisman Law, P.C., in Santa Monica. He is a ILSA.4 commercial litigator and currently represents condominium purchasers in cases Although ILSA has been on the books for more than four decades, involving the Interstate Land Sales Full Disclosure Act and California’s Sub-

no California appellate court has issued an opinion on an ILSA divided Lands Act in Northern and Southern California. AMANE KANEKO

14 Los Angeles Lawyer June 2013

In defending lawsuits brought under ILSA, years.14 Whether or not the land is already estate investment (potentially for a higher developers almost always cry “buyer’s re- improved for purposes of being exempt from purchase price), and start the process to col- morse,” contending that buyers should be ILSA depends on the nature of the improve- lect from the escrow company the liquidated saddled with the consequences of their own ments and what the developer intends to do damages flowing from the last buyer’s default actions in choosing to buy real estate at what with them. (if the purchase contract provides for liqui- turned out to be the top of the market. Congress passed ILSA to address the now dated damages). If a developer decides to Buyers, on the other hand, claim that the clichéd plight of retirees who thought they omit this 20-day right to cure from a purchase developers were negligent or worse—that were buying resort properties in Florida and contract and conceals the resulting right to they purposefully withheld material infor- elsewhere only to learn, long after their money rescind, the risk for the developer is that the mation that buyers were entitled to know was gone, that they had purchased worthless real estate market will crash less than two before agreeing to purchase this real estate to swampland or desert instead.15 The man- years after the buyer signs the contract and shift the burden of a down market onto buy- dated disclosures made in an ILSA property the buyer discovers and exercises this two-year ers. Although it is true that a number of ILSA report are intended to prevent these decep- right to rescind in a declining market, leav- cases have been brought on grounds that can tions, much in the way that a prospectus is ing the developer with an unsold unit, the readily be reduced to buyer’s remorse, plain- provided to would-be purchasers of stock in value of which has tanked. tiff buyers are prevailing in ILSA cases in a company to ensure that the investors make If a developer fails to provide a buyer jurisdictions around the country because the an informed decision. ILSA also provides with an ILSA property report concerning the relevant developers failed to make certain very strong antifraud protections to pur- project before the buyer signs a purchase disclosures that are mandated under ILSA. chasers of real estate governed by this statu- contract, ILSA imposes a two-year right to ILSA and the regulations implementing it tory scheme. ILSA makes it unlawful for a rescind from date of contract for the benefit require all developers offering nonexempt developer to employ a device, scheme, or of the buyer that the developer must disclose lots for sale in interstate commerce using a artifice to defraud a buyer; to obtain money in the purchase contract.19 common promotional scheme to submit an from a buyer by means of omissions of mate- If a developer fails to make these man- extensive statement of record to the Consumer rial facts necessary in order to make the state- dated disclosures, ILSA essentially provides Financial Protection Bureau (CFPB), which is ments made not misleading; or to engage in two avenues for rescission.20 First, if the the federal agency that is charged with enforc- a practice and course of business that oper- buyer chooses to act within the two-year ing ILSA.10 (On July 21, 2011, the CFPB ates as a fraud or deceit upon a buyer.16 A statutory period, “the buyer may automati- took over enforcement of ILSA from the U.S. provision in a developer’s form purchase con- cally rescind and the courts will enforce that Department of Housing and Urban Devel- tract requiring the buyer to waive the pro- right.”21 This right is referred to in the rele- opment (HUD).11) Developers must also protections of ILSA is rendered void under the vant case law as an automatic rescission right. vide prospective purchasers with an ILSA statute.17 “[A]n automatic rescission claim must com- property report prior to the purchaser’s sign- ply ‘with both [§1703(d)’s] two-year limit Rescission Rights ing of any agreement to purchase.12 for exercising the right of rescission and As was held in Burns v. Duplin Land A developer violates ILSA by failing to include §1711(b)’s three-year limit for filing suit Development, Inc.: certain information in the form purchase based on the seller’s refusal to honor said The statement of record describes the contract that the developer intends to use in rescission.’”22 In other words, to be entitled subdivision and must make various selling units in the development, by failing to to automatic rescission, the buyer must first disclosures, including persons having disclose in its ILSA property report infor- attempt to exercise the rescission right within an interest in subdivision lots, a legal mation that is required to be disclosed under two years of the contract date and then bring description of the subdivision, condi- this statutory scheme, or if the developer a lawsuit within three years of the contract tion of title, range of selling prices of makes affirmative misrepresentations of mate- date if the rescission demand is refused. lots, condition of access to the subdi- rial fact to, or conceals material facts from, In the second avenue, provided for under vision, unusual noise or safety condi- buyers. In certain instances, these failures 15 USC Section 1709(b), the “plaintiff must tions, availability of sewage disposal result in the imposition of a two-year rescis- show a basis for equitable relief—i.e., that § and other public utilities, the nature of sion right for the buyer that is imposed from 1703(b), (c), or (d) was violated and that the any improvements to be installed by the date of contract. equities demand rescission of the purchase the developer, consequences of any For example, ILSA requires that the pur- agreement. These two avenues are exclusive encumbrances, deed to the subdivi- chase contract provide the buyer with writ- of one another, with only the second one sion, any liens, and any easements. ten notice of a 20-day opportunity to remedy continuing to be available where the first The property report provided to pur- default or breach. Where a developer fails to avenue is time-barred after two years.”23 chasers must include the information include this 20-day right to cure for the ben- Equitable Relief contained in the statement of record, efit of buyer in the purchase contract, ILSA with some exclusions, and any other imposes a two-year right to rescind the agree- The Sixth Circuit recently held that ILSA information that [the CFPB] may ment from date of signing.18 “§§1709(a) and (b) both authorize the award require.13 From a business perspective, a developer’s of equitable relief for violations of [ILSA].”24 Certain real estate developments are decision not to give defaulting buyers a 20- Sections “1709(a) and (b) can be read in har- exempt from the registration and disclosure day right to cure (and to conceal the result- mony with [§1703(d)(2)] by construing requirements of ILSA. Exempted projects ing two-year rescission right) makes sense in [§1703(d)(2)] as creating an automatic statu- include those in which the proposed project a hot real estate market. If the buyer fails to tory right of rescission, which must be exer- includes less than 25 lots, in which the land close escrow and no 20-day right to cure is cised within two years from the date of sign- being sold is already improved at the time of included in the purchase contract, the devel- ing the purchase agreement, and construing sale, or for which the developer obligates oper can immediately cancel the contract, §§1709(a) and (b) as creating a right of equi- itself in its form purchase contracts with buy- give the next hungry investor in line the table rescission, available within three years ers to complete construction in less than two opportunity to take advantage of a great real of the date of the signing of the contract,

16 Los Angeles Lawyer June 2013 but only if the buyer can prove entitlement to the developer had informed them of the right; developers.34 The SLA requires developers equitable relief.”25 “[T]o establish entitle- and (4) that the buyer has incurred damages to apply for and obtain a Final Subdivision ment to equitable rescission, a buyer must as a result.”31 Public Report for the project that includes a show that the seller did not include the Another way to violate ILSA is by making true statement of the terms and conditions for required notice of rescission rights and that misrepresentations of material fact in an ILSA the sale of real property governed by the he would have timely revoked his purchase property report or by omitting “material SLA.35 The SLA is enforced by the California contract had he been notified of the two- facts” from the report. The materiality stan- Department of Real Estate (DRE). year window within which he could rescind it.”26 In pursuing equitable rescission based on a failure of the developer to disclose this two-year rescission right, the buyer “need not show that he would not have entered the contract had he been properly notified of his rights.”27 In Nahigian v. Juno-Loudoun, LLC,28 the Fourth Circuit recently affirmed the district court’s ruling on the plaintiff buyers’ motion for summary judgment that rescission of contract and returning the property to the developer in exchange for the purchase monies plus interest was the proper remedy. The buyers had purchased a lot in a luxury golf course community that was subject to ILSA, and the developer had failed to provide buyers with an ILSA property report, thus resulting in the imposition of a two-year right to rescind from date of contract. The buyers failed to request rescission within the two-year period but brought their lawsuit within three years of contract signing and successfully demonstrated that they would have rescinded their contract within two years had they been made aware of this rescission dard under ILSA is borrowed from federal In order to address these competing reg- right and the fact that the Ritz-Carlton Hotel securities jurisprudence. Under ILSA, a “fact ulatory schemes, Congress authorized the Company, LLC, did not have a 30-year com- stated or omitted is material if there is a sub- establishment of an ILSA certification pro- mitment to the development as had been stantial likelihood that a reasonable pur- gram that allows a developer in a certified represented to them by the developer’s chaser or seller of a security (1) would con- state to fulfill its registration and initial dis- agent.29 The Fourth Circuit held that “[t]he sider the fact important in deciding whether closure obligations under ILSA by complying lack of notice of the right to rescission helps to buy or sell the security or (2) would have with the relevant state requirements as long establish that equitable rescission is in fact viewed the total mix of information made as certain federally mandated disclosures are proper in this case. It’s clear that [the plain- available to be significantly altered by dis- included.36 tiffs] would have exercised their right to closure of the fact.”32 In other words, if the In 1981, HUD and the DRE entered into rescission within two years of contracting had objective reasonable buyer would consider the an agreement that established California as a they known of the right.”30 information withheld or misrepresented to be HUD-certified state under ILSA.37 Under this Rescission is not the only remedy available important to the decision about whether to certification program, HUD’s successor, the under ILSA. In order to recover damages purchase the property, then that information CFPB, allows developers of projects in Cali- under Section 1709(b), buyers “must prove is a material fact under ILSA. fornia that are governed by ILSA to obtain a that they were in some way harmed by a vio- Final Subdivision Public Report from the California’s Regulatory Regime lation of §1703(b), (c), or (d) and are there- DRE and submit that report to the CFPB in fore entitled to a damage remedy. ‘The reme- On their face, the disclosure requirements of lieu of filing a statement of record for the pro- dies available to purchasers in such a suit ILSA are fairly straightforward and a devel- ject with the CFPB and obtaining an ILSA include damages, taking into account the oper can readily avoid being sued by buyers property report.38 However, as noted in the amount the purchasers actually paid, and for ILSA violations by making the required agreement between HUD and the DRE, devel- may also include interest, court costs, rea- disclosures. However, in a number of states, opers must disclose the buyers’ federal rescis- sonable attorneys’ fees and the like.’ In order including California, these disclosure require- sion rights in the resulting public reports and to recover damages under §1709(a) or (b) ments are complicated by the existence of a otherwise comply with statutory obligations where the developer did not give notice of the separate, state-level regulatory regime that under ILSA and the regulations issued by the rescission right, the buyer must prove (1) includes its own registration and disclosure CFPB as HUD’s successor.39 that the developer did not give notice of the requirements. The requirement to disclose federal rescis- buyer’s right of rescission; (2) that the buyer In California, developers of residential sion rights in a DRE public report is indirectly did not learn about the rescission right until real estate projects consisting of five or more addressed in the Subdivision Public Report after the two-year period had expired; (3) parcels must comply with the SLA.33 The Application Guide (SPRAG) that the DRE that the buyer would have exercised the rescis- purpose of the SLA is to protect members of provides to developers, which advises devel- sion option during the two-year period, if the public who purchase lots or houses from opers that some subdivisions sold interstate

Los Angeles Lawyer June 2013 17 may be under the jurisdiction of HUD’s Office Meet your mandatory CLE requirements with our 2013 of Consumer and Regulatory Affairs (HUD /OCRA) and states that the developers must contact HUD/OCRA directly to determine if the project is subject to HUD/OCRA laws and CLE BOX CLE BUNDLE regulations.40 Developers face exposure to 25-Hour Audio Pack 6-Hour Required Subjects civil and administrative actions when, pur- CLE-in-a-Box Audio Pack posefully or not, they fail to include certain LACBA Member Price: $224 LACBA Member Price: $149 Nonmember Price: $274 Nonmember Price: $199 language in their purchase contracts and DRE public reports required under ILSA, or Available as a CD set or on-demand • Free Ground Shipping within California where they otherwise violate ILSA. To order, go to www.lacba.org/clebox or call Member Services at 800.456.0416 Attorneys representing condominium buyers purchasing units in urban developments The California State Bar deadline for the mandatory CLE requirements is February 1, 2014 for attorneys whose last names begin with N-Z. subject to ILSA can better serve their clients by familiarizing themselves with the obligations imposed on developers by ILSA. For these same reasons, developers are best served by erring on the side of caution and including in their form purchase contracts and DRE public reports the language required under ILSA whenever ILSA applies. The alternative is to face litigation as buyers seek redress for perceived wrongs armed with a very consumer-friendly statute. This is especially true when ILSA applies a one-way attorney’s fee provision and other cost-recovery provisions that favor consumers. These provisions may make consumers bolder if the relevant purchase contract does not include a prevailing party attorney’s fees provision.41 I

1 15 U.S.C. §§1701 et seq. 2 See Kenneally v. Bank of Nova Scotia, 711 F. Supp. 2d 1174, 1184 (S.D. Cal. 2010). Although nothing in the statute limits the application of ILSA to residential real estate, the relevant case law is focused almost exclusively on residential real estate transactions. 3 15 U.S.C. §1703(c)-(d). 4 For example, in Hammar v. Cost Control Marketing and Sales Management of Virginia, Inc., 757 F. Supp. 698 (W.D. Va. 1990), defendant CCM was the parent company of defendant CCM-VA and did not engage in any direct sales activities. CCM-VA was the actual developer of the project and handled marketing and sales. The court nevertheless found CCM to be an indirect seller and a “developer” under ILSA because it had some involvement in the sales effort. The court identi- ﬁed two documents that it deemed sufficient to hold that CCM was an indirect seller. The two documents were a memorandum on CCM stationery that addressed the appointment of a new vice president in charge of sales in Virginia, the state in which the relevant project was located, and another document on CCM stationery that detailed several new sales procedures for each sales site to follow. The documents were sent to CCM-VA’s offices in Virginia. Id., at 704-705. 5 BUS. & PROF CODE §11000 et seq. 6 Although there is no California case law interpreting this statutory scheme, California developers have reason for concern because Congress included a strict liability revocation provision in ILSA to 1) ensure that project registration and disclosure of material information in fact occurs, 2) limit the costly oversight of federal agencies into an activity traditionally regulated by state and local governments, and 3) allow unso- phisticated purchasers to enforce their rights. Bodansky v. Fifth on Park Condo, LLC, 635 F. 3d 75, 86 (2nd Cir. 2011). Where a plaintiff buyer can show the mandatory disclosures were not made, a two-year rescission right is imposed and the balancing of equi-

18 Los Angeles Lawyer June 2013 ties plays no role in this determination. Id. 18 15 U.S.C. §1703(d)(2). Land Sales Program of the State of California Department 7 Flint Ridge Development Co. v. Scenic Rivers Ass’n 19 15 U.S.C. §1703(c). of Real Estate” was published in the Federal Register. The of Oklahoma, 426 U.S. 776, 778 (1976). 20 Nu-Chan, LLC v. 20 Pine Street LLC, 2010 WL purpose of the notice was to “advise the public, and 8 15 U.S.C. §1709. 3825734 *6 (S.D. N.Y. Sept. 30, 2010). particularly California land developers and other state 9 Olsen v. Lake Country, Inc., 955 F. 2d 203, 205 21 Id. agencies with land sales regulatory responsibilities, of the (4th Cir. 1991); Kenneally, 711 F. Supp. 2d at 1184. 22 Id. *5, (quoting Taylor v. Holiday Isle, LLC, 561 F. terms of the agreement and the agreement’s effect upon ILSA’s broad reach also includes the sale of yet-to-be- Supp. 2d 1269, 1273 (S.D. Ala. 2008)). land sales business.” The notice further provided that the built commercial properties sold in interstate com- 23 Id. *6. 15 U.S.C. §1703(b) requires the developer to “federal requirements will be satisfied, and a registration merce under a common promotional scheme. include at least a seven-day rescission right in the pur- for the particular subdivision automatically becomes 10 15 U.S.C. §§1703(a)(1)(A), 1706; 12 C.F.R. chase contract, which is the minimum duration of a effective upon receipt of a certified copy of the California §§1010.3, et seq. rescission right for a purchase contract governed by Subdivision Final Public Report. . . . Federal rescission 11 Pub. L. 111-203, §1061(b)(7). ILSA. This right is otherwise two years when the devel- language will be incorporated into the body of the Public 12 15 U.S.C. §§1703(a)(1)(B), 1707; 12 C.F.R. §1010.3. oper fails to provide the buyer with an ILSA property Report, as appropriate, and in sales contracts.” 46 Fed. 13 Burns v. Duplin Land Development, Inc., 621 F. report before contract signing (§1703(c)), or when the Reg. 19,079-19,081. Supp. 2d 292, 301 (E.D. N.C. 2009) (citing 15 U.S.C. developer fails to make certain disclosures in the pur- 38 Regulations issued by the CFPB control the imple- §§1705, 1707). chase contract (§1703(d)) (like failing to disclose a mentation of the state certification program under 14 15 U.S.C. §1702. 20-day right to cure any default or breach to buyer). ILSA. “The purpose of State Certification is to lessen 15 The Second Circuit recently summarized the events 24 Veneklase v. Bridgewater Condos, 670 F.3d 705, 713 the administrative burden on the individual developer, that led to the enactment of ILSA: “In the 1960s, (6th Cir. Feb. 6, 2012). arising where there are duplicative state and federal reg- Congress held numerous hearings regarding the 25 Id. at 714. istration and disclosure requirements, without affect- unscrupulous marketing and sale of undeveloped sub- 26 Id. ing the level of protection given to the individual pur- divided land, often sight-unseen, to investors in faraway 27 Id. at n.5. chaser or lessee.” 12 C.F.R. §1010.500. states. As two contemporary scholars noted, ‘[t]he tes- 28 Nahigian v. Juno-Loudoun, LLC, 2012 WL 1511815 39 46 Fed. Reg. 19080-81 (“9. That the balance of timony laid bare an industry, ambitious and adolescent, (4th Cir. May 1, 2012). both Federal and California requirements apply, the actively engaged in marketing raw and semideveloped 29 Id. at *6-9. substance of this agreement…being limited to disclo- subdivided land to the ‘sunset set’ by means of the mails, 30 Id. at *8. sure documents required by both agencies and not magazines, newspapers, and personal or telephone 31 Nu-Chan, 2010 WL 3825734 *7. intended as a substitute for the substantive requirements solicitations.’ Ronald J. Coffey & James d’A. Welch, 32 Burns v. Duplin Land Development, Inc., 621 F. of the State of California or of the enforcement author- Federal Regulation of Land Sales: Full Disclosure Supp. 2d 292, 308 (E.D. N.C. 2009) (quoting Longman ity of either agency.... 12. That the DRE will take care Comes Down to Earth, 21 CASE W. RES. L. REV. 5, 6 v. Food Lion, Inc., 197 F. 3d 675, 683 (4th Cir. 1999), to assure that purchasers are advised in both public (1969–70) (footnotes omitted).…‘Untold thousands (internal quotation marks and citations omitted). reports and contracts of sale or lease of rescission were being flimflammed into purchasing parcels which 33 BUS. & PROF CODE §§11000 et seq. rights accruing to them under federal law...”). could not be inhabited without serious threat of death 34 Yuba Cypress Housing Partners, Ltd. v. Area 40 SPRAG, June 2011, at 7, available at http://www.dre from either thirst or drowning.’ Id.” Bodansky, 635 F. Developers, 98 Cal. App. 4th 1077, 1083 (2002). .ca.gov/files/pdf/sprag.pdf. The current SPRAG pre- 3d at 79. 35 BUS. & PROF. CODE §§11010(b)(5), 11018. dates the transfer of the obligation to enforce ILSA from 16 15 U.S.C. §1703(a)(2). 36 15 U.S.C. §1708. HUD to the CFPB. 17 15 U.S.C. §1712. 37 On March 27, 1981, a “Notice of Certification of the 41 15 U.S.C. §1709(c). 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Los Angeles Lawyer June 2013 19 Evaluating DAPTs for California Residents TRUST ADVISOR, Jan. 15, 2010, http://thetrustadvisor ASSET PROTECTION PLANNING NEWSLETTER #200 [here- (Continued from page 11) .com/news/states. inafter Oshins]; Richard W. Nenno, Planning and 8 David G. Shaftel & David H. Bundy, Domestic Asset Defending Domestic Asset-Protection Trusts, ST041 -to-deliver-hefty-tax-hike.html; 2012 State Liability Protection Trusts Created by Nonresident Settlors, 32 ALI-ABA 375, 487 (2012) [hereinafter Nenno]. Systems Rankings Study: Lawsuit Climate, available at EST. PLAN. 17, 23 (Apr. 2005). 16 See Jay Adkisson, Zukerkorn—Possible Bad News http://www.instituteforlegalreform.com/sites/default/files 9 Delaware and Alaska have a four-year seasoning for Domestic Asset Protection Trusts in Conflict-of- /lawsuit-climate/17834_FinalWeb_PDF.pdf. period. DEL. CODE ANN. tit. 12, §3572(b); ALASKA Laws Dispute, FORBES.COM (Dec. 25, 2012). 2 TAX FOUNDATION, 2013 STATE BUSINESS TAX CLIMATE STAT. §34.40.110(d). 17 Nenno, supra note 15; see also Gideon Rothschild INDEX (Oct. 2012), available at http://taxfoundation 10 NEV. REV. STAT. §166.170(1); S.D. CODIFIED LAWS & Martin M. Shenkman, Rush University Case Impact .org/sites/taxfoundation.org/files/docs/2013_Index.pdf. §55-16-10 (amended by 2012 S.D. H.B. 1045 §16 on Self-Settled Trusts, TR. & EST. (Nov. 1, 2012), 3 PROB. CODE §§15300-15301. (approved Mar. 2, 2012)). available via http://wealthmanagement.com [here- 4 PROB. CODE §15304. 11 NEV. REV. STAT. §166.170(1). inafter Rothschild & Shenkman]. 5 PROB. CODE §15306.5(a)-(b). 12 NEV. REV. STAT. §166.170(2). 18 See Nenno, supra note 15, at 440-44, 446-79. 6 See generally Edward J. McCaffery, Alan T. Yoshitake, 13 DEL. CODE ANN. tit. 12, §3573(1)-(2). 19 See BARRY S. ENGEL, ASSET PROTECTION PLANNING & Keith A. Davidson, The Advantages of Creating Out- 14 Battley v. Mortensen, 2011 WL 5025249 (Bankr. D. GUIDE 8 (2d ed. 2005) (“Any seasoned litigator would of-State Trusts, LOS ANGELES LAWYER, Sept. 2005, at 19. Alaska May 26, 2011) (Original Memorandum), and confirm that it is one thing to win a judgment but 7 Daniel G. Worthington & Mark Merric, Which Situs 2011 WL 5025252 (Bankr. D. Alaska July 8, 2011) another thing to collect a judgment.”). Is Best in 2012?, TR. & EST., Jan. 2012, at 60; Jerry (Memorandum Denying Motion for Reconsideration). 20 Nenno, supra note 15, at 487; see also Phillips Cooper, America’s Most Wealth Friendly States 15 See Steven J. Oshins, Steve Oshins & the Hybrid Petroleum Co. v. Shutts, 472 U.S. 797 (1985). Continue to Bid for Your Clients’ Trust Business, THE Domestic Asset Protection Trust, STEVE LEIMBERG’S 21 See Nenno, supra note 15, at 499. 22 David G. Shaftel, Introduction to ACTEC COMPARISON OF THE DOMESTIC ASSET PROTECTION TRUST STATUTES (Updated through June 30, 2012). 23 Barry S. Engel, Does Asset Protection Planning Really “Work”?A, J. SSET PROTECTION, Sept./Oct. 1998, at 18 [hereinafter Engel]. 24 See Neil Schoenblum, On Mortensen and Other Asset Protection Developments: Ten Questions for Barry S. Engel and John R. Garland, PROB. & PROP., Nov./Dec. 2012, at 33-34 [hereinafter Schoenblum]; see generally Engel, supra note 23. 25 See Schoenblum, supra note 24, at 33. 26 See Oshins, supra note 15. 27 See id. 28 See id.; see also Rothschild & Shenkman, supra note 17. 29 See Oshins, supra note 15. 30 See id. 31 See Ashlea Ebeling, California Voters Sock It to the Rich (and the Fate of Other State Tax Ballot Measures), FORBES.COM (Nov. 8, 2012); Matthew Campione, Phil Mickelson: Is Moving from California a Mistake? Actually, He Should Have Moved Sooner, FORBES.COM Life Care (Jan. 25, 2013); I.R.S. Priv. Ltr. Rul. 201310002 (Mar. Planning 8, 2013); Robert L. Moshman, Return of the DING Trusts, THE ESTATE ANALYST (Apr. 2013). 32 Richard W. Nenno, Planning to Minimize or Avoid • LIFE CARE PLANS Comprehensive (Trial) – Mini (Mediation/ State Income Tax on Trusts, 34 ACTEC J. 131, 145 Settlement Conference) – Critique (2008). 33 See REV. & TAX CODE §17742(a); McCulloch v. • EXPERT TESTIMONY Trial – Arbitration – Mediation/Settlement Franchise Tax Bd., 61 Cal. 2d 186 (1964); In the JAN ROUGHAN, RN • VIDEO SERVICE Day in Life – Mediation/Settlement Documentary Matter of the Appeal of the First National Bank of • MEDICAL RECORDS Review – Chronology Chicago, Trustee for Virginia Kirk Cord Trust, et al., www.linc.biz 1964 WL 1459 (Cal. St. Bd. Eq. 1964); In the Matter • IME Attendance Report/Critique of the Appeal of C. Pardee Erdman, 1970 WL 2442 114 W. COLORADO BLVD., MONROVIA, CA 91016 | 626.303.6333 EXT. 16 OR 17 (Cal. St. Bd. Eq. 1970). 34 REV. & TAX CODE §17951. 35 REV. & TAX CODE §17742(b). 36 REV. & TAX CODE §17743. 37 When California taxes a trust on resident beneficiary AMERICAN LANGUAGE SERVICES basis, and there are multiple beneficiaries, the income taxable is apportioned based on the number and inter- TRANSLATING & INTERPRETING ALL LANGUAGES ests of resident beneficiaries. Id. §17744. CERTIFIED PROFESSIONALS 38 CAL. CODE REGS. tit. 18, §17742(b). 39 Cal. Franchise Tax Bd. Tech. Adv. Mem. 2006- LEGAL 0002 (Feb. 17, 2006) (citations omitted). CORPORATE 40 PROB. CODE §21205. TRANSCRIPTIONS 41 NEV. REV. STAT. §163.5557. 42 NEV. REV. STAT. §163.5553. EXPERT WITNESS TESTIMONY 43 See Wendy Abkin, Navigating the Waters of NATIONWIDE OFFICES California’s Income Taxation of Trusts, CALIFORNIA WORLDWIDE COVERAGE CPA (Sept. 2009), available at http://www.calcpa.org /Content/25579.aspx. 44 ESTABLISHED 1985 ~ EXCELLENT RATES Making the World a Little Smaller See FAM. CODE §§850-53; Jay Adkisson, Community Property and Creditor-Debtor Law Explained, DINA SPEVACK 310.829.0741 x 303 800.951.5020 alsglobal.net FORBES.COM (May 20, 2012).

20 LosAmerican Angeles Lawyer LanguageJune 2013 Services : Contact Dina Spevack LALawyer Magazine : 1/6 Page Horizontal: 4-5⁄8” wide x 2-1⁄4” tall Linda Bekas 213.896.6504 • [email protected] Prepared by Kathye Hicks : 310.826.0104 c 310.916.7700 [email protected] 1/10/12 MCLE ARTICLE AND SELF-ASSESSMENT TEST By reading this article and answering the accompanying test questions, you can earn one MCLE credit. To apply for credit, please follow the instructions on the test answer sheet on page 25.

by Kelly C. Quinn and Mark W. Allen Incident to ARREST The U.S. Supreme Court has yet to rule conclusively on police searches of cell phones upon arrest

AN ATTORNEY IN A RUSH to the court- tive. In particular, how the history of the house rolls past a stop sign and hears the “search incident to arrest” exception applies sound of a police siren, only to realize on to cell phones merits examination. being pulled over that his or her identification Courts throughout the country disagree on is at home in yesterday’s coat pocket. The how cell phone searches should be analyzed.3 police officer arrests the attorney and while Despite the differing results, these opinions are searching for weapons finds the attorney’s all based on fundamental Fourth Amendment iPhone, which has a complete record of the principles and landmark cases concerning attorney’s personal and professional com- the search-incident-to-arrest exception to the munications. The phone also links to the warrant requirement. server of the attorney’s firm, where a wealth The Fourth Amendment protects indi- of confidential or sensitive information may viduals from unreasonable search and seiz- be accessed.1 Although the attorney is not sus- ure.4 A warrantless search is “per se unrea- pected of any crime other than the traffic sonable” subject only to certain “jealously offenses, the officer is permitted under cur- and carefully drawn” exceptions.5 One such rent California law to search the phone.2 exception is a search incident to arrest.6 Un- For attorneys and our business clients, der the exception, police may search the body the information that is contained in or available through cell phones is expansive, criti- Kelly C. Quinn is a certified specialist in criminal cal, and potentially compromising. Under- appellate law, and Mark W. Allen is a law clerk with standing the law concerning the government’s the Law Offices of Mark J. Werksman in Los ability to access this information is impera- Angeles.

Los Angeles Lawyer June 2013 21

and reaching space of an arrestee, including that officers can search containers incident to Court focused on the fact that the search any containers found on the arrestee’s person.7 arrest.17 Notably, Robinson also shifted focus was delayed.29 Despite some uncertainty in Although the notion of search incident to away from Chimel’s two-pronged rationale the scope of Chadwick, courts have routinely arrest has been around for nearly a century,8 for the search-incident-to-arrest exception.18 held that the government can conduct a its modern incarnation is commonly recog- The Robinson Court explained that an offi- delayed search of items on the arrestee’s per- nized as being set forth in Chimel v. Cali- cer’s ability to search incident to arrest was son under Edwards, but under Chadwick, fornia.9 In Chimel, officers searched an not dependent on a belief that the arrestee the government is prohibited from conduct- arrestee’s home. In ﬁnding the search imper- possessed weapons or destructible evidence,19 ing a delayed search of items not immediately missible, the U.S. Supreme Court clearly laid noting, “Since it is the fact of custodial arrest associated with the person.30 out the two-part rationale underlying this which gives rise to the authority to search, it In New York v. Belton, the Supreme Court

Last year in People v. Diaz, the California Supreme Court addressed whether officers could conduct a delayed search of the contents of an arrestee’s cell phone under the search- incident-to-arrest-exception. exception to the warrant requirement: 1) the is of no moment that [the officer] did not indi- applied Chimel in the automobile context, need to “remove any weapons that [an cate any subjective fear of the respondent or allowing officers to search the “grab area” of arrestee] might seek to use in order to resist that he did not himself suspect that respon- an arrestee in a vehicle.31 Belton was read arrest or effect his escape,” and 2) the need dent was armed.”20 The dissent gave an expansively, and for nearly 30 years, officers to “seize any evidence on the arrestee’s per- impassioned argument against this change, were allowed to search a vehicle’s passenger son in order to prevent its concealment or noting that the “majority’s approach repre- compartment, and any containers found in it, destruction.”10 Thus, the Court noted that sents a clear and marked departure from our even after the vehicle’s occupants were already officers may “search an arrestee’s person” long tradition of case-by-case adjudication of in police custody.32 However, this practice was and the area “‘within the immediate con- the reasonableness of searches and seizures recently changed in Arizona v. Gant, in which trol’” of the arrestee, “meaning the area from under the Fourth Amendment.”21 the Supreme Court returned to the rationale which he might gain possession of a weapon The concept of timing in searches incident set forth in Chimel.33 In Gant, the Supreme or destructible evidence.”11 to arrest overlapped with container searches Court broke away from the bright-line rules Chimel was originally regarded as requir- in United States v. Chadwick.22 In that case, of Belton and Robinson, expressing concern ing the search to occur contemporaneously at the defendant was arrested while standing about the power of police to rummage the time of arrest. However, five years later, next to an open car trunk storing a foot- through an individual’s property. The Supreme in United States v. Edwards, the Supreme locker.23 Officers searched the defendant and Court articulated that an interpretation of Court allowed for a delayed search (10 hours discovered keys to the footlocker.24 Officers Belton that gave police the right to auto- after arrest) of the arrestee’s clothing for evi- transported the footlocker to the police sta- matically search a vehicle incident to arrest is dence.12 In doing so, the Court broadly stated tion and searched its contents 90 minutes “anathema to the Fourth Amendment” and that it is “plain that searches and seizures that later, revealing large quantities of marijuana.25 would “untether the rule from the justifica- could be made on the spot at the time of The Court found that “once law enforce- tions underlying the Chimel exception.”34 arrest may legally be conducted later when the ment officers have reduced luggage or other The Court noted, “If there is no possibility accused arrives at the place of detention.”13 personal property not immediately associ- that an arrestee could reach into the area Thus, Edwards held that once a suspect is in ated with the person of the arrestee to their that law enforcement officers seek to search, custody, the items in the suspect’s possession exclusive control, and there is no longer any both justifications for the search-incident-to- during the arrest may be seized and searched danger that the arrestee might gain access to arrest exception are absent and the rule does even though a substantial period of time has the property to seize a weapon or destroy evi- not apply.”35 Furthermore, the Court recog- elapsed. dence, a search of that property is no longer nized the significance of the change but indi- In addition to timing, objects containing an incident of the arrest.”26 cated that “[n]one of the dissenters in Chimel other objects, otherwise known as “contain- Returning to the rationale in Chimel, the or the cases that preceded it argued that law ers,” present another significant issue in Court noted that there was “no longer any enforcement reliance interests outweighed search-incident-to-arrest jurisprudence. In danger that the arrestee might gain access to the interest in protecting individual consti- United States v. Robinson, an officer arrested the property to seize a weapon or destroy evi- tutional rights so as to warrant fidelity to an the defendant for operating a vehicle without dence.”27 The Court distinguished Robinson unjustifiable rule.”36 a license.14 The officer then searched the and Edwards on the grounds that they Search Incident to Arrest and Cell defendant’s person, finding a crumpled ciga- involved warrantless “searches of the per- Phones rette package in his pocket that contained son” while the present case dealt with heroin.15 The Robinson Court held that the “searches of possessions within an arrestee’s Last year in People v. Diaz,37 the California officer’s search of the cigarette package did not immediate control.”28 Chadwick’s bound- Supreme Court addressed whether officers “offend the limits imposed by the Fourth aries are not clearly defined, as the Court could conduct a delayed search of the contents Amendment.”16 Although not expressly dis- did not discuss or resolve whether a search of an arrestee’s cell phone under the search- cussing the search of containers, this opinion would be permissible had the agents imme- incident-to-arrest-exception. In Diaz, offi- has been routinely cited for the proposition diately searched the footlocker. Instead, the cers arrested the defendant on a drug offense

24 Los Angeles Lawyer June 2013 MCLE Test No. 225 MCLE Answer Sheet #225 INCIDENT TO ARREST The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. Name Law Firm/Organization 1. The Fourth Amendment ensures that individuals 12. California Supreme Court Justice Justice Kathryn receive: Werdegar wrote that permitting police to search cell A. Protection over free speech. phones incident to an arrest allows “police carte Address B. Due process of law. blanch, with no showing of exigency, to rummage at City C. Protection from unreasonable search or leisure through the wealth of personal and business State/Zip seizure. information that can be carried on a mobile phone or E-mail D. A jury trial. handheld computer merely because the device was 2. Under the “search incident to arrest” exception, taken from an arrestee’s person.” Phone police may not contemporaneously search any con- True. State Bar # tainers found on the arrestee’s person. False. True. 13. In a letter to the California State Senate, INSTRUCTIONS FOR OBTAINING MCLE CREDITS False. Governor Brown wrote that the legislature is better 1. Study the MCLE article in this issue. 3. The purpose of the “search incident to arrest” suited to resolve the complex and case-specific 2. Answer the test questions opposite by marking exception to the warrant requirement is to allow offi- issues related to constitutional search-and-seizure the appropriate boxes below. Each question cers to track and gather information on citizens. protections. has only one answer. Photocopies of this True. True. answer sheet may be submitted; however, this False. False. form should not be enlarged or reduced. 4. Under the “search incident to arrest” exception, 14. Under New York v. Belton, “[i]f there is no possi- 3. Mail the answer sheet and the $20 testing fee officers may contemporaneously search within the bility that an arrestee could reach into the area that ($25 for non-LACBA members) to: area within the arrestee’s immediate control. law enforcement officers seek to search, both justifi- Los Angeles Lawyer True. cations for the search-incident-to-arrest exception MCLE Test False. are absent and the rule does not apply.” P.O. Box 55020 5. The U.S. Supreme Court has held that because a True. Los Angeles, CA 90055 cell phone was immediately associated with defen- False. Make checks payable to Los Angeles Lawyer. dant’s person, officers are entitled to inspect its con- 15. United States v. Edwards involved a search of 4. Within six weeks, Los Angeles Lawyer will tents without a warrant. defendant’s: return your test with the correct answers, a True. A. Package of cigarettes. rationale for the correct answers, and a False. B. Luggage. certificate verifying the MCLE credit you earned through this self-assessment activity. 6. One exception to the warrant requirement is a C. Cell phone. search that is incident to an arrest. D. Clothing. 5. For future reference, please retain the MCLE test materials returned to you. True. 16. In 2009, which state supreme court required a False. warrant to search a cell phone on the basis of cell ANSWERS 7. In United States v. Chadwick, the U.S. Supreme phone users’ reasonable and justifiable expectation Mark your answers to the test by checking the Court upheld the validity of the search of a footlocker of a higher level of privacy due to the information appropriate boxes below. Each question has only in the trunk the arrestee’s car by police officers. contained in the cell phone? one answer. True. A. Oregon. False. B. Nevada 1. I A I B I C I D 8. In California, police are not permitted to search C. Ohio. 2. I True I False an arrestee’s cellphone incident to an arrest without D. Florida. 3. I True I False a search warrant. 17. The “search incident to an arrest” exception is True. recognized as being set forth in Arizona v. Gant. 4. I True I False False. True. 5. I True I False 9. The U.S. Supreme Court did the following with the False. 6. I True I False California Supreme Court’s decision in People v. 18. In deciding whether a warrant is required to 7. I True I False Diaz. search a phone incident to an arrest, the U.S. A. Affirmed. Supreme Court could consider: 8. I True I False B. Reversed. A. Whether a phone is a container. 9. I A I B I C I D C. Granted certiorari. B. The information stored on a phone. 10. I True I False D. Denied certiorari. C. The risk that evidence of a crime within a 11. I True I False 10. In People v. Diaz, the California Supreme Court phone can be destroyed. found that cell phones carry with them a heightened D. All of the above. 12. I True I False privacy interest because of the nature and wealth of 19. In United States v. Finley, the Fifth Circuit 13. I True I False information stored within them. decided that cell phones were akin to a container 14. I True I False True found on an arrestee’s person. 15. I A I B I C I D False. True. I I I I 11. California is the only state to address the issue of False. 16. A B C D whether a warrant is required to search the contents 20. In New York v. Belton, the defendant was 17. I True I False of a cell phone. stopped for speeding and the officer observed an 18. I A I B I C I D True. envelope marked “Super Fly.” 19. I True I False False. True. I I False. 20. True False

Los Angeles Lawyer June 2013 25 and took him to the police station.38 Ninety requirement of the Fourth Amendment to to search an individual’s cell phone and rum- minutes later, officers searched the defen- the United States Constitution.”47 mage through the contents stored within. It dant’s cell phone without a warrant, reveal- Californians and their elected officials is reasonable to infer that the Supreme Court ing incriminating messages implicating Diaz seemed to agree with the concerns raised by may echo this concern. This notion had also in the sale of narcotics.39 the Diaz dissent. In the aftermath of Diaz, the been proposed by Justice Antonin Scalia, five In a 5-2 decision, with Justices Kathryn legislature unanimously voted to require years before Gant.55 If the Court were to Werdegar and Carlos Moreno dissenting, the police to obtain a search warrant in order to extend Gant to all searches incident to an Diaz court found that the cell phone was search an arrestee’s cell phone. The ratio- arrest, then officers would be prohibited from like the clothing taken from the defendant in nales listed for the bill note the prevalence of searching items upon arrest, unless the Edwards and the cigarette package taken cell phones today, the propensity to use cell arrestee is unsecured and within reaching from the defendant’s coat pocket in Robinson, phones to store vast amounts of private data, distance of the seized item, or the officer but it was unlike the footlocker in Chadwick, and that cell phones, once confiscated, no believed the item contained evidence of a “which was separate from the defendants’ longer pose a threat to officer safety.48 How- crime.56 This would likely prohibit most war- persons and was merely within the ‘area’ of ever, Governor Edmund G. Brown vetoed rantless searches of cell phones that have their ‘immediate control.’”40 The court con- the bill on October 9, 2011, writing, “The been secured by officers. To be certain, apply- cluded that because the cell phone was imme- courts are better suited to resolve the complex ing Gant in this manner would represent a sig- diately associated with defendant’s person, the and case-specific issues relating to constitu- nificant shift away from how the search-inci- officer was “entitled to inspect” its contents tional search-and-seizure protections.”49 dent-to-arrest exception has been implemented without a warrant at the police station 90 over the last quarter of a century. Waiting for the U.S. Supreme Court minutes after arrest, whether or not an exi- Instead of, or in addition to, recognizing gency existed.41 The U.S. Supreme Court denied review of the full potential of Gant, the Court could also Thus, the Diaz court considered only Diaz50 and other cell phone search cases that focus on whether a cell phone should be con- whether the delayed search of the cell phone were contrary to Diaz in their outcome or rea- sidered “on the person,” or “an item within was permissible, without fully considering soning.51 However, as the defendant in Diaz the immediate control of the person,” simi- whether the rationale in Chimel and Gant noted, that the Supreme Court “will rule ulti- lar to the California Supreme Court’s Diaz should apply to cell phones. The majority mately and conclusively on this issue is a analysis. As noted above, this finding would relied on the bright-line rules set forth in foregone assumption. The escalated conflict result in the cell phone being treated either like Robinson and Edwards despite the U.S. among the various courts appears to have the cigarette package in Robinson (allowing Supreme Court’s decision in Gant, which reached a crescendo, impelling this Court to for a contemporaneous search), or the foot- scorned the use of a bright-line rule. In fact, wait no longer.”52 locker in Chadwick (not allowing for an the majority opinion is devoid of any dis- When the U.S. Supreme Court addresses asynchronous search). Unlike the California cussion of Gant. Instead, the majority asserted this issue, its disposition may hinge on the pri- Supreme Court in Diaz, the Supreme Court that the cell phone search incident to arrest mary considerations that have arisen in cases may consider the modern cell phone’s capa- was “reasonable without requiring the arrest- involving cell phone searches, including the bility of accessing a significant amount of ing officer to calculate the probability that underlying purpose of the search-incident- information that is not “on the person” of the weapons or destructible evidence may be to-arrest exception to the warrant require- arrestee. involved.”42 The court also declined to find, ment–the need to maintain officer safety and The Court could also decide to focus on as the defendant argued, that cell phones preserve evidence, the determination of whether a cell phone is truly a container.57 should be treated as having a heightened pri- whether a cell phone is a container, and the Courts across the country have wrestled with vacy interest because of the sensitive nature expectations of privacy individuals have in the question of whether a cell phone is a con- and wealth of information stored on the their cell phones. The Court’s decision will tainer, and this issue dominates a significant devices.43 also likely depend on each justice’s compre- amount of cell phone jurisprudence.58 Al- The Diaz court also assumed that every- hension of the technology at issue. though several courts have focused on thing “stored inside” the cell phone was “on As noted above, in Gant, the Supreme whether a cell phone is a container, the impact the person” of the arrestee.44 In doing so, the Court ostensibly returned to the original jus- of categorizing a cell phone as a container is court did not discuss whether items accessi- tifications underlying a search incident to unclear. The phone, container or not, would ble in the cell phone (such as information arrest, holding that a search that did not still be an item governed by the search-inci- stored in the “cloud,”45 or remote servers) are meet that rationale was unreasonable.53 Since dent-to-arrest exception. actually “on the person.”46 In these instances, Gant is based on the twin rationales of offi- The unique and ubiquitous nature of cell the cell phone does not act like a container to cer safety and evidence preservation set forth phones postulates whether a new rule needs “store” that information but rather like a in Chimel, the Court could easily find that rea- to be created. The California Supreme Court key able to unlock information stored far soning should apply to all searches conducted in Diaz opposed the creation of a rule that away from the person being arrested. pursuant to an arrest. Further, in Gant, the considered the nature of the object being The dissent criticized the majority’s hold- Court focused on an individual’s privacy searched rather than its location (such as in ing, noting that it “apparently allow[s] police interests, noting that “[a] rule that gives a home or vehicle).59 However, Justice carte blanche, with no showing of exigency, police the power to conduct such a search Anthony Kennedy has previously noted that to rummage at leisure through the wealth of whenever an individual is caught commit- “cell phone and text message communications personal and business information that can be ting a traffic offense, when there is no basis are so pervasive that some persons may con- carried on a mobile phone or handheld com- for believing evidence of the offense might be sider them to be essential means or necessary puter merely because the device was taken found in the vehicle, creates a serious and instruments for self-expression, even self- from an arrestee’s person. The majority thus recurring threat to the privacy of countless identification. That might strengthen the case sanctions a highly intrusive and unjustified individuals.”54 for an expectation of privacy.”60 Thus, it is type of search, one meeting neither the war- Indeed, the Court may find that the same possible that the Court could create a search rant requirement nor the reasonableness concern is implicated when an officer is able rule that applies only to cell phones.

26 Los Angeles Lawyer June 2013 Regardless of what route the Court even for a traffic violation, to a preapproved foray into 40 Id. at 93 (citing United States v. Chadwick, 433 chooses to take in addressing this issue, impor- a virtual warehouse of their most intimate communi- U.S. 1, 15 (1977)). cations and photographs without probable cause.” 41 tant considerations for its resolution will Id. at 91. People v. Diaz, 51 Cal. 4th 84, 112 (2011) (Werdegar, 42 Id. at 90. depend on how in-depth the individual jus- J. dissenting) (citing Matthew E. Orso, Cellular Phones, 43 Id. at 96-97. The Diaz dissent also noted the unique tices are able to delve into and understand the Warrantless Searches, and the New Frontier of Fourth nature of cell phones: “The potential intrusion on technological issues involved. The extent to Amendment Jurisprudence, 50 SANTA CLARA L. REV. informational privacy involved in a police search of a which individual privacy may be exposed to 183, 211 (2010)). person’s mobile phone, smartphone or handheld com- 2 warrantless searches may not be entirely See EVID. CODE §954; Hickman v. Taylor, 329 U.S. puter is unique.…A contemporary smartphone can 495 (1947); see also PENAL CODE §1524. hold hundreds or thousands of messages, photographs, apparent without a full understanding of the 3 See, e.g., United States v. Finley, 477 F. 3d 250 (5th videos, maps, contacts, financial records, memoranda underlying technology and its capabilities. Cir. 2007) (treating cell phone like a container); United and other documents, as well as records of the user’s States v. Park, No. CR 05-05-375 SI, 2007 WL telephone calls and Web browsing. Never before has City of Ontario v. Quon 1521573 (N.D. Cal. May 23, 2007); United States v. it been possible to carry so much personal or business The Supreme Court recently decided two Wall, No. 08-60016-CR, 2008 WL 5381412 (S.D. information in one’s pocket or purse.” Id. at 104 Fla. Dec. 22, 2008); State v. Smith, 124 Ohio St. 3d 163 (Werdegar, J., dissenting). cases concerning new technology. In 2010, the (2009). 44 The dissent finds that cell phones are not “contain- Supreme Court decided City of Ontario v. 4 U.S. CONST. amend. IV. ers” within the meaning of U.S. Supreme Court prece- Quon,61 which addressed whether a police 5 Katz v. United States, 389 U.S. 347, 357 (1967). dent. Id. at 110 (Werdegar, J., dissenting). officer had a reasonable expectation of pri- 6 Chimel v. California, 395 U.S. 752 (1969), abro- 45 See Joanna Stern, What Is the ‘Cloud’?, ABC News vacy in messages sent by a text-pager, which gated by Davis v. United States, 131 S. Ct. 2419 (2011); (June 26, 2012), http://abcnews.go.com/Technology United States v. Edwards, 415 U.S. 800, 802 (1974). /cloud-computing-storage-explained/story?id=16647 had been issued by the police department.62 7 Chimel, 395 U.S. at 763; Edwards, 415 U.S. at 803; 561. The Court ultimately determined that Quon United States v. Robinson, 414 U.S. 218, 235 (1973). 46 See Diaz, 51 Cal. 4th at 111 (Werdegar, J., dissent- had a reasonable expectation of privacy in his 8 See Weeks v. United States, 232 U.S. 383, 392 (1914). ing). messages; however, the Court concluded that 9 See Chimel, 395 U.S. 752. 47 Id. at 111 (Werdegar, J., dissenting). the search did not violate the Fourth Amend- 10 Id. at 763. 48 S.B. 914 §1(a)-(e), 2011-2012 Reg. Sess. (Cal. 2011). 11 49 ment because it was reasonable under the Id. Letter from Edmund G. Brown Jr., Governor of 12 Edwards, 415 U.S. 800. Cal., to Members of the Cal. State Senate (Oct. 9, 63 circumstances. The Court’s grasp of the 13 Id. at 803-06. 2011), available at http://gov.ca.gov/docs/SB_ 914 technology involved, however, appeared dubi- 14 United States v. Robinson, 414 U.S. at 221 (1973). _Veto_Message.pdf. ous.64 For example, during the oral argu- 15 Id. at 223. 50 Diaz, 51 Cal. 4th 84, cert. denied, 132 S. Ct. 94 ment Chief Justice John Roberts inquired of 16 Id. at 224. (2011). 17 51 the difference between a pager and an e-mail, See, e.g., United States v. Flores-Lopez, 670 F. 3d 803 See Finley, 477 F. 3d 250, cert. denied, 127 S. Ct. (7th Cir. 2012); In re Sealed Case 96-3167, 153 F. 3d 2065 (2007); Smith, 124 Ohio St. 3d 163, cert. denied, and asked what would occur if someone tried 759 (D.C. Cir. 1998); United States v. Clemons, 72 F. 131 S. Ct. 102 (2010). In Finley, the court upheld a to contact another person on a pager while 3d 128 (4th Cir. 1995); United States v. Johnson, 846 “substantially contemporaneous” warrantless search of a message was coming through.65 Justice F. 2d 279 (5th Cir. 1988); United States v. Gomez, 807 a cell phone. Cf. Diaz v. California, 132 S. Ct. 94. In Scalia seemed surprised to discover that a F. Supp. 2d. 1134 (S.D. Fla. 2011). State v. Smith, 124 Ohio St. 3d 163 (2009), the Ohio 18 service provider acts as an intermediary Robinson, 414 U.S. at 235. Supreme Court reached an opposite holding than the 19 Id. one in Diaz. between the text sender and recipient, and 20 Id. at 236-38 (Marshall J., dissenting) (quoting 52 Brief for Petitioner at 9, Diaz v. California, 132 S. even asked whether messages received on a Sibron v. New York, 392 U.S. 40, 59 (1968) and Ct. 94 (2011) (No. 10-1231), 2011 WL 1357748. pager could be printed and distributed.66 Mapp v. Ohio, 367 U.S. 643, 647 (1961)). 53 Arizona v. Gant, 556 U.S. 332 (2009); see Cynthia However, two years after Quon, Justice Sonia 21 Id. at 239. Lee, Package Bombs, Footlockers, and Laptops: What Sotomayor’s concurring opinion in United 22 United States v. Chadwick, 433 U.S. 1 (1977). the Disappearing Container Doctrine Can Tell Us 23 Id. at 4. RIM States v. Jones,67 a case discussing GPS track- about the Fourth Amendment, 100 J. C . L. & 24 Id. See also id. at 11. CRIMINOLOGY 1403, 1461 (2010). ing, as well as Justice Samuel Alito’s separate 25 Id. at 5. 54 Gant, 556 U.S. at 345. concurring opinion,68 may calm some con- 26 Id. at 15. 55 See Thorton v. United States, 541 U.S. 615, 632 cerns over whether the justices understand 27 Id. (2004). that individual privacy is implicated with 28 Id. at 16, n.10. 56 See Gant, 556 U.S. at 343, 351; see also United 29 forms of new technology. Id. at 15. States v. Wall, No. 08-60016-CR, 2008 WL 5381412, 30 See United States v. Curtis, 635 F. 3d 704 (5th Cir. at *3-4 (S.D. Fla. Dec. 22, 2008). Ultimately, a large responsibility looms 2011); United States v. Smith, 549 F. 3d 355 (6th Cir. 57 See, e.g., New York v. Belton, 453 U.S. 454, 460 over the U.S. Supreme Court to resolve the 2008); United States v. Passaro, 624 F. 2d 938 (9th Cir. (1981). uncertainty regarding cell phone searches. 1980); United States v. Fontecha, 576 F. 2d 601, 603 58 See United States v. Finley, 477 F. 3d 250 (5th Cir. Resolution is needed not only to provide (5th Cir. 1978). 2007); State v. Smith, 124 Ohio St. 3d 163, 167-69 31 lower courts with a blueprint of how to ana- New York v. Belton, 453 U.S. 454, 460 (1981). (2009) (citing Belton, 453 U.S. at 460). The defendant was stopped for speeding, and the offi- 59 See Brief for Petitioner at 9, Diaz v. California, 132 lyze cell phone searches—regardless of cer observed an envelope that was marked “Supergold,” S. Ct. 94, 95 (2011) (No. 10-1231), 2011 WL 1357748. whether the analysis fits neatly within exist- which the officer associated with marijuana. Id. at 60 City of Ontario v. Quon, 130 S. Ct. 2619 (2010). ing jurisprudence or the Court conjures a 456. The officer ordered the defendant out of the vehi- 61 Id. at 2630. new exception specifically for cell phones— cle, arrested the car’s occupants, and discovered not 62 Id. at 2624. but also to provide officers with guidance marijuana but cocaine. 63 Id. at 2628-29. 32 See, e.g, Thornton v. United States, 541 U.S. 615 64 Id. at 2629. (“The judiciary risks error by elaborating regarding the scope of their searches. The (2004); United States v. Doward, 41 F. 3d 789 (1st Cir. too fully on the Fourth Amendment implications of Court’s decision will also let everyday cell 1994); United States v. Porter, 738 F. 2d 622 (4th emerging technology before its role in society has phone users know just how much of their lives Cir. 1984). become clear.”) they should decide to record on their cell 33 Arizona v. Gant, 556 U.S. 332, 344 (2009). 65 Oral Argument at 29:31, 44:56, City of Ontario v. phones, given the risk of having that infor- 34 Id. at 343, 347. Quon, 130 S. Ct. 2619 (2010) (No. 08-1332), avail- 35 mation searched by police officers. I Id. at 339. able at http://www.oyez.org/cases/ 2000-2009/2009 36 Id. at 350. /2009_08_1332. 37 People v. Diaz, 51 Cal. 4th 84 (2011). 66 Id. at 48:57, 51:07. 1 As Justice Werdegar noted, the California rule sub- 38 Id. at 88. 67 United States v. Jones, 132 S. Ct. 945, 955 (2012). jects “anyone who is the subject of a custodial arrest, 39 Id. at 88-89. 68 Id. at 958 (Alito, J., concurring).

Los Angeles Lawyer June 2013 27 BY ART GHARIBIAN STORAGE STOP THE SELF-STORAGE FACILITY ACT Self-service storage facilities have clear (SSFA) regulates aspects of “the relationship between owners and renters of storage units lien enforcement rights, but a wronged at self-service storage facilities.”1 Enacted in 1981, the SSFA provides self-storage facility tenant may ﬁnd recourse owners an “effective remedy against defaulting customers.”2 One signiﬁcant remedy pro- Thus, the tenant must act quickly by moving been issued, the court will order the storage vides self-storage facilities the ability to vacate ex parte to obtain the TRO to prevent the facility to show cause as to why a preliminary nonpaying tenants by holding storage auc- winning bidder from removing the storage injunction should not be granted. The Order tions or lien sales.3 To prevent the winning bid- space contents. to Show Cause (OSC) hearing must be set no der from gaining access to the storage unit At an ex parte hearing on a TRO, the “later than 15 days or, if good cause appears after a storage auction, a tenant must move court merely reviews the conflicting con- to the court, 22 days from the date the tem- quickly to obtain a temporary restraining tentions to determine whether there is a suf- porary restraining order is issued.”8 In the order (TRO). ficiency of evidence to issue a temporary meantime, defense counsel should prepare a A TRO is a short-term injunction that is order to “keep the subject of litigation in memorandum of points and authorities to issued pending a later determination of status quo pending a full hearing to determine oppose the pending application for a pre- whether the moving party is entitled to a whether the applicant is entitled to a preliminary injunction. Counsel should serve preliminary injunction.4 In storage auctions, liminary injunction.”5 “All that is determined the memorandum of points and authorities at TROs come into play when a tenant seeks to is whether the TRO is necessary to maintain least two days before the preliminary injunc- prevent the winning bidder from accessing the the status quo pending the noticed hearing on tion hearing to prevent the plaintiff from storage space and removing property. Typi- the application for preliminary injunction.”6 cally, winning bidders have 24 to 48 hours fol- Thus, the “issuance of a TRO is not a deter- Art Gharibian is an associate in the Los Angeles lowing the storage auction to completely mination of the merits of the controversy.”7 office of Lewis Brisbois Bisgaard & Smith LLP who

remove all contents from the storage unit. Once a temporary restraining order has currently practices healthcare and elder law. KEN CORRAL

28 Los Angeles Lawyer June 2013 obtaining a continuance.9 dant may recover that portion of his attorney NLS, the tenant can prevent the lien sale and In contrast to the ex parte hearing regard- fees attributable to defending against those force the self-storage facility to proceed ing the TRO, a “hearing on a preliminary causes of action on which the issuance of instead through a civil action.32 If no decla- injunction is a full evidentiary hearing giving the preliminary injunction was based.”23 ration in opposition to the lien sale is exe- all parties the opportunity to present argu- cuted, the self-storage facility may sell the The SSFA ments and evidence.”10 Courts consider two property at a storage auction.33 factors in determining whether to issue a pre- The SSFA, codified in Business and Professions After the expiration of the time given in liminary injunction: 1) the likelihood that Code Sections 21700 et seq., has lien and the NLS, or following the failure of a tenant the plaintiff will prevail on the merits at trial lien sale provisions to help storage facility to pay rent or obtain a court order pursuant and 2) the interim harm that the plaintiff is owners “recover the storage facility…collect to Business and Professions Code Section likely to sustain if the injunction is denied the rent and other contractual charges owed; 21709, “an advertisement of the sale shall be compared to the harm the defendant is likely and…sell or otherwise dispose of any personal published once a week for two weeks con- to suffer if the court grants the preliminary property remaining after termination.”24 As secutively in a newspaper of general circula- injunction.11 “The latter factor involves con- such, the SSFA provides very specific guide- tion published in the judicial district where the sideration of such things as the inadequacy of lines for the rental contract, late fees, and the sale is to be held.”34 The advertisement must other remedies, the degree of irreparable attachment liens and sale of a tenant’s prop- include a description of the property to be harm, and the necessity of preserving the sta- erty that may occur due to nonpayment of sold, the name of the tenant, and the name tus quo.”12 Irreparable harm “is one for rent and fees. and location of the storage facility.35 which either…its pecuniary value is not sus- Specifically, if any part of the rent or other To obtain a preliminary injunction, a ceptible to monetary valuation, or…the item charges due from a tenant remains unpaid for plaintiff-tenant must show that the storage is so unique its loss deprives the possessor of 14 consecutive days, a self-storage facility facility did not follow the specific lien notice intrinsic values not replaceable by money or may terminate the tenant’s right to use of requirements under the SSFA. Defense coun- in kind.”13 The trial court is the judge of the the storage space by sending a Preliminary sel must therefore provide the court with credibility of the affidavits or declarations Lien Notice (PLN) to the tenant’s last known evidence to show that the self-storage facil- filed in support of and in opposition to a address by certified or regular first-class mail ity complied with the lien notice require- preliminary injunction.14 if the owner obtains a certificate of mailing ments under the SSFA. Defense counsel should Although a court must consider both fac- indicating the date the notice was mailed.25 obtain a declaration from an employee of tors in making its decision, it may deny a pre- The contents of the PLN must contain specific the storage facility, preferably the property liminary injunction if either of the two factors notifications, such as a statement that the manager or the district manager of the facil- alone would support a ruling denying relief.15 tenant’s right to use the storage space will ter- ity where the storage unit is located, and set For example, a court should not issue an minate on a specified date not less than 14 forth all the pertinent facts leading up to injunction if there is no possibility of success, days after the mailing of the notice unless the the sale of the storage unit. The declaration even if issuing the injunction might prevent tenant pays the amount due prior to that should identify when the tenant entered into irreparable harm.16 This is because “there is date. The PLN must also provide notice that the rental agreement with the facility, the no justification in delaying harm where, the tenant may be denied access to the stor- rent amount, and what amount is currently although irreparable, it is also inevitable.”17 age space after the termination date if the owed. More important, the declaration “The burden is on the plaintiff to show that amount is not paid.26 The SSFA provides a should identify when the PLN and NLS were it would be harmed if the preliminary injunc- sample PLN for reference.27 If the PLN has mailed and in what manner. Counsel should tion were not granted.”18 been sent as required and the total amount also obtain copies of the PLN, NLS, and Since the plaintiff-tenant would be trying due has not been paid within 14 days of the proof of advertisement to attach to the dec- to prevent the winning bidder from gaining termination date specified in the PLN, the lien laration. access to the storage space and removing imposed by the SSFA attaches as of that date, In addition to contending that the self-stor- property, the tenant must show that the stor- and the self-storage facility owner may 1) age facility did not comply with the specific age facility unlawfully sold the contents of the deny the tenant access to the space, 2) enter lien notice requirements under the SSFA, a storage space by violating some aspect of the the space, and 3) move any property found plaintiff-tenant may also challenge the win- SSFA.19 Review of the entire file from the in the space to a place of safekeeping.28 ning bidder’s status. However, Section 21711 self-storage facility and immediate analysis of Once the lien attaches, the self-storage of the SSFA provides that—despite noncom- whether the storage unit was sold in accor- facility must send the tenant a Notice of Lien pliance by the storage facility with the require- dance with the SSFA is therefore necessary. Sale (NLS) and a blank declaration in oppo- ments of the SSFA—a bona fide purchaser If a preliminary injunction is granted, the sition to lien sale form by certified mail or by takes the property free of any rights of per- court must require a bond or undertaking on first-class mail if the owner obtains a certifi- sons against whom the lien was claimed.36 the part of the moving party.20 The amount cate of mailing, postage prepaid.29 As with the Thus, the winning bidder’s status is not rel- of the bond is fixed on the basis of the amount contents of the PLN, a NLS must contain evant to the legal battle between the self- of damages the opposing party will likely specific notices.30 The NLS must indicate the storage facility and the tenant. In fact, there sustain during litigation if the court subse- property will be sold to satisfy the lien after is no requirement under the SSFA that a self- quently determines that the applicant was a specified date (which must be at least 14 storage facility sell the property to a bona fide not entitled to an injunction.21 The under- days from the date of mailing the notice) purchaser. Therefore, to have any chance of taking is mandatory, and “a preliminary unless the tenant executes and returns by obtaining a preliminary injunction, a plain- injunction does not become operative until it certified mail a declaration in opposition to tiff-tenant must show that the storage facil- is furnished.”22 “If the preliminary injunction lien sale, and that the tenant may regain full ity did not follow the specific lien notice is valid and regular on its face, requiring the use of the space by paying the full lien amount requirements under the SSFA, since the sole defendant to defend against the main action before that specified date.31 If the tenant issue before the court is whether the self- in order to demonstrate that the injunction completes the declaration and returns it to the storage facility sold the contents of the stor- was wrongfully issued, the prevailing defen- self-storage facility before the date set in the age space in accordance with the SSFA.

30 Los Angeles Lawyer June 2013 To circumvent the protection afforded The allegations were based upon the loss of The plaintiff-tenant might also attempt under Section 21711, a plaintiff-tenant might personal property after Public Storage sold it to invoke the protections afforded under argue that, since the person against whom the at auction without providing notice.45 California Civil Code Section 1708, which lien is claimed is the tenant, there is third- The trial court sustained Public Storage’s provides that “[e]very person is bound, with- party property in the storage unit, thereby pre- demurrer without leave to amend to the plain- out contract, to abstain from injuring the cluding the winning bidder from taking the tiffs’ claims for negligence, breach of contract, person or property of another, or infringing property free of the third party’s rights. breach of the covenant of good faith and fair upon any of his or her rights.”50 The word However, such an argument assumes that dealing, and conversion based upon a release “injury” means a wrongful invasion of legal Section 21711 was intended to limit the rights of liability in the rental contract.46 The court rights.51 Further, in order to constitute action- of a bona fide purchaser to take property of appeal, however, reversed and remanded able tort, there must be a legal duty, imposed only as to the person the lien was claimed as to Tom Milwicz but affirmed as to his by statute or otherwise, owed by the defen- against. This is clearly not the case. wife, Leslie.47 The court explained that Leslie dant to the one injured.52 Under well-settled law, a bona fide pur- “was not in privity of contract with Public Counsel for the facility should argue that chaser takes property free and clear of rights of any persons claiming rights to said property. “A bona fide purchaser for value who acquires his interest in real property without notice of another’s asserted rights in the property takes the property free of such unknown rights.”37 Thus, Section 21711 is intended to allow a bona fide purchaser to take property free of any rights of persons against whom the lien is claimed even if the self-storage facility sells the property in violation of the SSFA. Section 21711 therefore provides even greater protection for bona fide purchasers. The third-party argument also assumes that the plaintiff-tenant may assert the rights of the third party or that the third party has standing. “[T]he determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors,” among which are 1) the extent to which the transaction was intended to affect the plaintiff, 2) the foreseeability of harm to him or her, 3) the degree of certainty that the plaintiff suffered injury, 4) the closeness of the connection between the defendant’s conduct and the injury suffered, 5) the moral blame attached to the defendant’s conduct, and 6) the policy of preventing future harm.38 The principle underlying this analysis is that “where the ‘end and aim’ of the contractual transaction between a defendant and the con- Storage and cannot allege a claim of breach” as long as it complied with the SSFA, it owned tracting party is the achievement or delivery and that this “lack of privity precludes any no legal duty to any potential third-party of a benefit to a known third party or the pro- claim for negligence or other tortious wrong- plaintiff. In addition, counsel should argue tection of that party’s interests, then liability doing against Public Storage.”48 that once compliance is shown under SSFA, will be imposed on the defendant for his or As in Milwicz, counsel should argue that any rights the third party may have had were her negligent failure to carry out the obliga- the third-party plaintiff was not in privity of extinguished. Thus, counsel should argue tions undertaken in the contract even though contract with the self-storage facility and, that Section 1708 is inapplicable, since the the third party is not a party thereto.”39 therefore, cannot claim any breach. Further, facility did not infringe on any legal rights. An instructive case on point, although this lack of privity should preclude any claim Rental Agreement unpublished, is Milwicz v. Public Storage.40 for negligence or other tortious wrongdoing In Milwicz, Tom Milwicz signed a contract for against the defendant, as the defendant should The SSFA provides that “[n]othing in this the rental of a storage space with Public not have had any notice or knowledge that chapter shall be construed to impair or affect Storage.41 After he rented the unit, Public third-party property was stored in the rental the right of the parties to create additional Storage failed to notify Milwicz that his prop- space prior to the auction sale, and there rights, duties, and obligations in and by virtue erty stored at Public Storage’s facility would were therefore no foreseeable plaintiffs to of the rental agreement.”53 Indeed, “the con- be sold at auction.42 Milwicz, along with his whom it owed a duty. The “end and aim” in tract between the operator and renter of a wife and daughter, filed a complaint against such a case between a tenant and self-storage public storage unit defines their legal rela- Public Storage stating claims for negligence facility is not to deliver “a benefit to a known tionship.”54 Depending on the terms of the and conversion.43 The complaint sought dam- third party or the protection of that party’s rental agreement, counsel should be able to ages, attorneys’ fees, and punitive damages.44 interests.”49 argue that the tenant understood and agreed

Los Angeles Lawyer June 2013 31 to store personal property in the storage irreparable injury.58 Injunctive relief is not, in 43 Cal. 3d 1217, 1227 (1987). 16 Jessen, 142 Cal. App. 3d at 458. 59 space that belonged only to the tenant. This itself, a cause of action. A cause of action 17 Id. will help show that a third-party plaintiff must exist before injunctive relief may be 18 Casmalia Res., Ltd. v. County of Santa Barbara, 195 cannot prevail on the merits since the storage granted.60 Cal. App. 3d 827, 838 (1987). of third-party property was in clear breach of In the context of storage auctions, a plain- 19 BUS. & PROF. CODE §§21700 et seq. 20 the rental agreement. tiff-tenant often pleads conversion as the CODE CIV. PROC. §529(a). 21 Id. The rental agreement can be further used underlying cause of action in the complaint. 22 Casitas Inv. Co. v. Charles L. Harney, Inc., 203 Cal. to show that the tenant is in breach of con- To state a cause of action for conversion, a App. 2d 811, 816 (1962); Griffin v. Lima, 24 Cal. tract to support the argument that the tenant plaintiff must sufficiently plead the following App. 2d 697, 699 (1954). will not be able to prevail on the merits. For elements: 1) The plaintiff’s ownership or right 23 ABBA Rubber Co. v. Seaquist, 235 Cal. App. 3d 1, example, counsel should be able to argue to possession of the property at the time of 9 (1991). 24 Sen. Comm. on Judiciary, Analysis of A.B. No. that the plaintiff understood and agreed not the alleged conversion, 2) the defendant’s 750 (1981–1982 Reg. Sess.) as amended May 26, to store heirlooms or precious, invaluable, or conversion by a wrongful act or disposition 1981, at 3. irreplaceable property for which no immediate of the plaintiff’s property rights, and 3) dam- 25 BUS. & PROF. CODE §21703. resale market exists, or objects that the ten- ages.61 Ownership or right to possession is 26 BUS. & PROF. CODE §21703(a)-(d). ant claims have special or emotional value. determined at the time of the alleged con- 27 BUS. & PROF. CODE §21704. 28 BUS. & PROF. CODE §21705(a). This is relevant to the discussion regarding version.62 A person who neither has title nor 29 BUS. & PROF. CODE §21705(b)(1), (2). suffering irreparable harm with no adequate any right to possession cannot recover in an 30 BUS. & PROF. CODE §21705(b)(1)(A)-(E). 63 remedy at law during the temporary restrain- action for conversion. 31 BUS. & PROF. CODE §21705(b)(1)(C)-(D). ing order phase if the tenant had in fact Under the SSFA, California law provides 32 BUS. & PROF. CODE §21710. claimed that such property was stored in the clear and beneficial lien enforcement rights to 33 BUS. & PROF. CODE §21706. 34 unit as a basis of obtaining a TRO. self-service storage facilities. One significant BUS. & PROF. CODE §21707. 35 Id. Counsel should further argue that the ten- right provides self-storage facilities the abil- 36 BUS. & PROF. CODE §21711. ant understood and agreed that all personal ity to vacate nonpaying tenants by holding 37 Hochstein v. Romero, 219 Cal. App. 3d 447, 451 property stored in the storage space was at the storage auctions or lien sales. Indeed, the (1990). tenant’s sole risk and that the self-storage primary purpose of the storage auction is to 38 Biakanja v. Irving, 49 Cal. 2d 647, 650 (1958). 39 facility would not insure the tenant’s per- clear an unproductive unit so that it can once Adelman v. Associated Int’l Ins. Co., 90 Cal. App. 4th 352, 363 (2001); cf. PROSSER, TORTS §§36, 88, sonal property. Counsel should also be able again be profitably rented to a different ten- 107, pp. 168, 172, 544-45, 747 (2d ed. 1955). to use a provision in the rental agreement to ant. The popularity of reality shows such as 40 Milwicz v. Public Storage, 2010 Cal. App. Unpub. defeat any claims for conversion or negli- Storage Wars has increased bidding activity, LEXIS 1870 (Cal. App. 2d Dist. Mar. 15, 2010). gence with a provision indicating that the thereby creating an incentive for self-storage 41 Id. at *3. 42 self-storage facility would have no responsi- facilities to conduct more storage auctions. Id. at *3-4. 43 Id. at *4. bility to the tenant or to any other person for Self-storage facility operators should never- 44 Id. any loss from any cause, including, without theless refrain from acting too quickly in ini- 45 Id. at *1. limitation, the owner’s or owner’s agent’s tiating the lien process and, in doing so, make 46 Id. active or passive acts, omissions, negligence, errors that lead to litigation. It is therefore crit- 47 Id. at *1, *19-20. or conversion, unless the loss is directly caused ical for self-storage facilities to understand the 48 Id. at *19-20. 49 See Adelman, 90 Cal. App. 4th 352, 363. by the owner’s fraud, willful injury, or will- lien process under the SSFA to avoid these 50 I CIV. CODE §1708. ful violation of the law. legal battles. 51 Sea World, Inc. v. Superior Court, 13 Cal. App. 3d Accordingly, counsel should argue that 100, 104 (1970); see also Pacific Tel. & Tel. Co. v. the tenant did not comply with the terms 1 Vitug v. Alameda Point Storage, Inc., 187 Cal. App. Granite Constr. Co., 225 Cal. App. 2d 765, 768 and conditions of the rental agreement and 4th 407, 409 (2010). (1964) (“A cause of action in tort is based on viola- thus, has unclean hands. A party seeking the 2 Assem. Comm. on Judiciary, Bill Dig., A.B. No. tion of a legally protected right.”). 750 (1981-1982 Reg. Sess.) as amended May 11, 52 Coleman v. California Yearly Meeting of Friends interposition of a court of equity must come 1981, at 4. Church, 27 Cal. App. 2d 57, 582 (1938). 53 into court with clean hands. Thus, when a 3 BUS. & PROF. CODE §§21700 et seq. BUS. & PROF. CODE §21713. plaintiff’s conduct shows that he or she has 4 Landmark Holding Group, Inc. v. Superior Court, 54 Sackett v. Public Storage, 222 Cal. App. 3d 1088, unclean hands, a preliminary injunction will 193 Cal. App. 3d 525, 528-29 (1987). 1089 (1990). 55 be denied.55 “No one can take advantage of 5 Id. Jay Bharat Developers, Inc. v. Minidis, 167 Cal. 6 App. 4th 437, 445 (2008). his own wrong.”56 Id. 7 Id. 56 CIV. CODE §3517. 57 Filing a Demurrer 8 CODE CIV. PROC. §527(d)(1). Moreno Mut. Irr. Co. v. Beaumont Irr. Dist., 94 Cal. 9 CODE CIV. PROC. §527(e). App. 2d 766, 778 (1949). In addition to preparing points and author- 10 Landmark Holding Group, Inc., 193 Cal. App. 3d 58 Brownfield v. Daniel Freeman Marina Hosp., 208 ities in opposition to a preliminary injunction, at 528-29; see also CODE CIV. PROC. §527(a)-(f). Cal. App. 3d 405, 410 (1989). 11 59 Korean American Legal Advocacy Foundation v. if the temporary restraining order was issued Continental Baking Co. v. Katz, 68 Cal. 2d 512, 527-28 (1968); IT Corp. v. County of Imperial, 35 Los Angeles, 23 Cal. App. 4th 376, 399 (1994); on the basis of a verified complaint, counsel Cal. 3d 63, 69 (1983); Cohen v. Board of Supervisors, Major v. Miraverde Homeowners Ass’n, 7 Cal. App. may also consider demurring to or answering 40 Cal. 3d 277, 285-86 (1985). 4th 618, 623 (1992); Shell Oil Co. v. Richter, 52 the complaint. A preliminary injunction is 12 Abrams v. St. John’s Hosp. & Health Ctr., 25 Cal. Cal. App. 2d 164, 168 (1942). not warranted if there is not on file a com- App. 4th 628, 636 (1994). 60 Id. 13 61 plaint that states facts sufficient to constitute Jessen v. Keystone Sav. & Loan Ass’n, 142 Cal. Burlesci v. Petersen, 68 Cal. App. 4th 1062, 1066 App. 3d 454, 457 (1983). (1998). a cause of action for injunctive relief of the 14 Voeltz v. Bakery & Confectionery Workers Int’l 62 Messerall v. Fulwider, 199 Cal. App. 3d 1324, character embraced in the preliminary injunc- Union, 40 Cal. 2d 382, 386 (1953) (overruled on 1329 (1988); see also Bastanchury v. Times-Mirror tion.57 The elements of a cause of action for other grounds by Smyrniotis v. Local Joint Executive Co., 68 Cal. App. 2d 217, 236 (1945). injunctive relief are 1) a tort or other wrong- Bd., 64 Cal. 2d 30 (1966)). 63 McCafferty v. Gilbank, 249 Cal. App. 2d 569, ful act constituting a cause of action and 2) 15 Voeltz, 40 Cal. 2d at 386; see also King v. Meese, 572 (1967).

32 Los Angeles Lawyer June 2013 2013 to referral

ADMINISTRATIVE LAW AVIATION LAW civil, appellate, and trial practice concentrated in the areas of insolvency, voluntary and involuntary bank- LAW OFFICES OF MICHAEL GOCH, APC GLADSTONE MICHEL WEISBERG WILLNER ruptcy, creditor’s rights, reorganization, commercial, 5850 Canoga Avenue, Suite 400, Woodland Hills, & SLOANE, ALC and business law including Chapter 7, Chapter 11, CA 91367, (818) 710-7190, fax (818) 710-7191, 4551 Glencoe Avenue, Suite 300, Marina del Rey, and Chapter 13. Mr. Tilem is a Bankruptcy Special- e-mail: [email protected]. Web site: CA 90292, (310) 821-9000, fax (310) 775-8775, ist certified by the California State Bar Board of MichaelGoch.com. Contact Michael Goch. e-mail: [email protected]. Web site: Legal Specialization and by the American Board of Licensing and related disciplinary proceedings with www.GladstoneMichel.com. Contact Arthur Certification. Our attorneys and staff are able to as- emphasis on healthcare practitioners, as well as Willner. The firm’s Aviation Group has more than sist clients in Armenian, Mandarin, and Spanish. Department of Health Services matters and related 30 years of experience representing airlines, prod- issues, from investigatory stage through trial and uct manufacturers, general aviation operations, and BUSINESS & CORPORATE TRANSACTIONS writ proceedings. Degrees/licenses: JD Southwest- insurers in thousands of catastrophic injury, wrong- GLADSTONE MICHEL WEISBERG ern University School of Law, cum laude, 1978; ad- ful death, and products liability claims arising out of WILLNER & SLOANE, ALC mitted in California since 1978. Also admitted in major airline disasters and other incidents. We also Central, Eastern, Northern, Southern District and defend our aviation clients in racial and disability dis- 4551 Glencoe Avenue, Suite 300, Marina del Rey, Ninth Circuit. crimination claims, breach of contract matters, and CA 90292, (310) 821-9000, fax (310) 775-8775, class actions. e-mail: [email protected], jfishman ADOPTION—DOMESTIC, STEPPARENT, @gladstonemichel.com. Web site: www ADULT, INDEPENDENT, RELATIVE AND BANKRUPTCY LAW .GladstoneMichel.com. Contact Jason Wallach AGENCY and Joel Fishman. Gladstone Michel’s business & BANKRUPTCY LAW FIRM, PC corporate transactions attorneys have over 35 years THE LAW OFFICES OF DAVID H. 10524 West Pico Boulevard, Suite 212, Los Ange- of experience representing clients in the formation, BAUM, APLC les, CA 90064, (310) 559-9224, fax (310) 559-9133, financing, operation and expansion of businesses, 16255 Ventura Boulevard, Suite 704, Encino, e-mail: [email protected]. Web site: including their purchase and sale, as well as with CA 91436, (818) 501-8355, fax (818) 501-8465, www.BKYLAWFIRM.com. Contact Kathleen P. the purchase, development, financing, leasing and e-mail:[email protected]. Web sites: www.adoptlaw March, Esq. Bankruptcy Law Firm, PC, Los Ange- sale of all types of real estate. We also provide neu- .com, www.adoptionhelp.com, and www les, owned and operated by former CD CA Bank- tral mediation of disputes among business owners, .probatelawca.com. Contact David H. Baum, ruptcy Judge Kathleen March, Esq., certified bank- and between business owners and management. APLC. More than 34 years of expertise in represen- ruptcy specialist, represents individual and small Our clients span an array of industry categories, in- tation of adoptive parents, stepparents, and birth business debtors in Chapter 7, 11, and 13 bank- cluding manufacturing, distribution, real estate, en- parents in all forms of adoption, guardianship, family ruptcies, all divisions of CD CA Bankruptcy Court; tertainment, communications, new media and new formation, probate law and assisted reproduction represents creditors in all chapters; represents in technologies. Additionally, we serve as outside gen- technology law. President, Academy of California bankruptcy adversary proceedings and bankruptcy eral counsel to clients that do not have in-house Adoption Lawyers (1996-2005, 2008-2011); Presi- appeals; expert witness. Free first consultation to legal departments. Our services include strategic as dent, Academy of California Family Formation tell any prospective debtor or creditor client whether well as practical business and legal advice pertain- Lawyers (2001-2005, 2008-2011); Fellow, American we can help you. Fair prices. ing to the client’s business operations. Academy of Assisted Reproduction Technology At- GLADSTONE MICHEL WEISBERG WILLNER torneys (2009-present). Fellow, American Academy CIVIL & PROBATE & SLOANE, ALC of Adoption Attorneys (1992 - present). A-V rated LAW OFFICES OF LINK K. SCHWARTZ, by Martindale Hubbell for more than 29 years. 4551 Glencoe Avenue, Suite 300, Marina del Rey, C.F.L.S. Member of Bar Register of Preeminent Lawyers. CA 90292, (310) 821-9000, fax (310) 775-8775, Super Lawyer designee (2007- present). Recipient e-mail: [email protected]. Web site: 1801 Century Park East, Suite 1100, Los Angeles, of U.S. Congress Angel in Adoption Award 2004. www.GladstoneMichel.com. Contact Jason CA 90067, (310) 553-LINK, fax (310) 553-5430, Wallach. Gladstone Michel’s bankruptcy lawyers e-mail: [email protected]. Contact Link K. APPELLATE LAW/CIVIL APPEAL have substantial experience and up-to-the-minute Schwartz. Full-service divorce, custody, child sup- substantive knowledge of bankruptcy and insol- port, child support arrears and enforcement. Pre- HONEY KESSLER AMADO vency law, procedures, and alternatives. We have nups, postnups, domestic partners, grandparent 261 South Wetherly Drive, Beverly Hills, CA represented stressed businesses, creditors, rights, complex and simple property division. 90211, (310) 550-8214, fax (310) 274-7384, debtors, trustees, lenders, investors, landlords, ten- e-mail: [email protected]. Web site: ants, shareholders, directors, spouses and other CIVIL RIGHTS www.amadolaw.com. Contact Honey Kessler parties in all aspects of bankruptcies, workouts, THE LAW OFFICES OF DALE K. GALIPO Amado. Ms. Amado (AV-rated) is a Certified Appel- turnarounds, restructurings and appeals, both in 21800 Burbank Boulevard, Suite 310, Woodland late Law Specialist (Cal. State Bar Board of Legal and out of court. We also have particular expertise Hills, CA 91367, (818) 347-3333, fax (818) Specialization). On the trial level, she joins the litiga- in helping financially stressed businesses and indi- 347-4118, e-mail: [email protected], or tion team to assist with identifying issues, creating a viduals, and keeping financially healthy clients out of [email protected]. Contact Dale Galipo. sufficient record for appeal, and drafting complex litigation. In addition to the bankruptcy and insol- Specializing in police misconduct; deadly force, briefs or postjudgment pleadings and motions. On vency practice, the department also handles gen- excessive force, wrongful police shootings, taser the appellate level, Ms. Amado prepares all briefs eral business transactions and serves as outside gun injuries, and other police negligence. See and argues the case to the court. When retained as general counsel to several small and family-owned display ad on page 38. a consultant on appeal, Ms. Amado assists counsel businesses. with identifying issues, strategizing the appeal, and COMMERCIAL COLLECTIONS drafting or editing the appellate briefs and motions. LAW OFFICES OF DAVID A. TILEM Ms. Amado has been counsel in a number of land- 206 North Jackson Street, Suite 201, Glendale, CA RONALD P. SLATES, P.C. mark cases and has written and lectured 91206, (818) 507-6000, fax (818) 507-6800, e-mail: 523 West 6th Street, Suite 502, Los Angeles, CA extensively in the area of appellate law. [email protected]. Web site: www.tilemlaw.com. 90014, (213) 624-1515, fax (213) 624-7536 Contact Lorna. A boutique bankruptcy firm with a e-mail: [email protected]. Web sites: www

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34 Los Angeles Lawyer June 2013 judges and district attorneys throughout Los Angeles, Orange, Sacramento, and Ventura Counties.

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Los Angeles Lawyer June 2013 35 Web site: www.employmentattorneyca.com. ESTATE PLANNING, TRUST AND PROBATE KOLODNY & ANTEAU Contact Stephen Danz. Over 30 years of trial 9100 Wilshire Boulevard, Ninth Floor-West Tower, DELILAH KNOX RIOS, ATTORNEY AT LAW, and settlement experience. Stephen Danz and As- Beverly Hills, CA 90212, (310) 271-5533, fax (310) APLC sociates is California’s largest employee only, 271-3918. Web site: www.kolodny-anteau.com. statewide law firm with offices in Los Angeles, San 3333 Brea Canyon Road, Suite 123, Diamond Bar, Since its foundation in 1995, Kolodny & Anteau has Diego, Sacramento, Fresno, Orange County, San CA 91765, (909) 598-3747, fax (909) 598-9537, offered high level representation in matters of family Bernardino, and San Francisco. Our firm is dedi- e-mail: [email protected]. Web site: www law. We specialize in handling sophisticated and cated to representing employees in disputes .dkriosfamilylw.com. 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Contact Mina N. Sirkin. Estate planning, side the strong presence often required to bring fair sands of employees throughout the state of Cali- probate, conservatorships, elder law, and struc- and just results. fornia and have won numerous trials and arbitra- tured settlements. See display ad on page 39. tions on their behalf. If you think you have a possi- LAW OFFICES OF LINK K. SCHWARTZ, C.F.L.S. ble claim please contact our office immediately. FAMILY LAW We don’t make empty promises; we deliver re- 1801 Century Park East, Suite 1100, Los Angeles, sults. We provide free initial consultations. No at- BENNETT & ERDMAN CA 90067, (310) 553-LINK, fax (310) 553-5430, torneys’ fees unless we make a recovery on your 5670 Wilshire Boulevard, Suite 1400, Los Angeles, e-mail: [email protected]. Contact Link K. behalf. Paying highest referral fees (per State Bar CA 90036, (323) 935-0041, (310) 824-0471, Schwartz. Full-service divorce, custody, child sup- rules). See display ad on page 37. e-mail: [email protected]. Web site: www port, child support arrears and enforcement. .bennetterdman.com. Bennett & Erdman represents Prenups, postnups, domestic partners, grandparent ENTERTAINMENT LAW men and women throughout Southern California in rights, complex and simple property division. all areas of family law, including divorce/dissolution, GLADSTONE MICHEL WEISBERG WILLNER WALZER & MELCHER LLP child custody/visitation and adoption. Founding & SLOANE, ALC 21700 Oxnard Street, Suite 2080, Woodland Hills, partner Roberta Bennett is a certified family law CA 91367, (818) 591-3700, fax (818) 591-3774, 4551 Glencoe Avenue, Suite 300, Marina del Rey, specialist and a pioneer in family law for more than e-mail: [email protected]. Web site: www CA 90292, (310) 821-9000, fax (310) 775-8775, 30 years. In addition, members of the firm have au- .walzermelcher.com. Contact Christopher C. e-mail: [email protected] and thored publications and lectured extensively on Melcher. Complex marital dissolution litigation at [email protected]. Web site: www many issues, including domestic partnership and Contacts Leon trial court level or on appeal involving property dis- .GladstoneMichel.com. same-sex marriages as well as obtaining, protect- Gladstone and Owen Sloane. putes, businesses, or marital agreements. Certified Gladstone Michel ing, and using financial information in family law Family Law Specialist. See display ad on page 1. has a full-service Entertainment and Media Group cases. focusing on music, film, television, radio, publish- ing and theater, as well as entertainment insurance BRANDON LAW GROUP FIREARMS & DANGEROUS WEAPONS matters. Our clients include musicians, record la- 200 Oceangate, Suite 1500, Long Beach, CA MICHEL & ASSOCIATES, P.C. bels, actors, directors, producers, screenwriters, 90802, (562) 901-9800, fax (562) 983-9383, 180 East Ocean Boulevard, Suite 200, Long Beach, publishers, production companies, multimedia e-mail: [email protected]. Web site: CA 90802, (562) 216-4444, fax (562) 216-4445, companies, promoters, distributors, authors and www.brandonlaw.net. Contact Lisa Brandon, e-mail: [email protected]. Web site: other entertainment clients, as well as entertain- CFLS. Certified specialists in family law offering www.michellawyers.com. Contact Chuck Michel. ment insurers, completion guarantors, and a host family law litigation and mediation services for com- Civil litigation, criminal defense, restraining orders, of below-the-line talent. We have extensive experi- plex matters and/or large estates. restoration of gun rights, gun seizures and returns, ence drafting and negotiating recording, publish- regulatory compliance checks, inventory cataloging, ing, finance, development, production, distribution, DELILAH KNOX RIOS, ATTORNEY AT shooting range protection and development, envi- touring, merchandising, corporate sponsorship, LAW, APLC ronmental and land use issues, government licens- and other agreements. We also advise clients on ing and permits, hunting protection, pyrotechnics, copyright, intellectual property, and digital media, 3333 Brea Canyon Road, Suite 123, Diamond Bar, CA 91765, (909) 598-3747, fax (909) 598-9537, explosives, destructive devices, props, and more. and offer expert witness and litigation consultant See display ad on page 41. services. e-mail: [email protected]. Web site: www .dkriosfamilylw.com. Contact Delilah Knox Rios. LAW OFFICES OF LINK K. Mediation and collaborative divorce, dissolution of FRANCHISE LAW SCHWARTZ, C.F.L.S. marriage, legal separation, modifications, child cus- KURTZ LAW GROUP, A PROFESSIONAL 1801 Century Park East, Suite 1100, Los Angeles, tody, child support, spousal support, marital agree- CORPORATION CA 90067, (310) 553-LINK, fax (310) 553-5430, ment, paternity, and judgments. 21650 Oxnard Street, Suite 500, Woodland Hills, e-mail: [email protected]. Contact Link K. KELLY FERNANDEZ & KARNEY CA 91367, (818) 827-9229, fax (818) 986-4474, Schwartz. Full-service divorce, custody, child sup- e-mail: [email protected]. Web site: 429 Santa Monica Blvd., Suite 120, Santa Monica, port, child support arrears and enforcement. Pre- www.kurtzfranchiselaw.com. Contact Barry CA 90401 (310) 393 0236, fax (310) 393 4221, nups, postnups, domestic partners, grandparent Kurtz, Certified specialist, franchise and distribution email: jmoorhouse@cfli.com. Web site: www rights, complex and simple property division. law, State Bar of California Board of Legal Special- .kfkfamilylaw.com. Contact James Moorhouse. ization. Regulatory compliance and franchisor/fran- Business owner divorce, complex property division, ERISA BENEFITS chisee relationships, with an emphasis on fran- complex move away, child custody issues, child chisors and franchisees in the restaurant business. KANTOR & KANTOR LLP and spousal support, domestic violence restraining 19839 Nordhoff Street, Northridge, CA 91324, orders, lawyers divorce. Kelly Fernandez & Karney, RODNEY R. HATTER & ASSOCIATES (818) 886-2525, fax (818) 350-6272, e-mail: one of the oldest and largest divorce firms serving Suite 900, 1301 Dove Street, Newport Beach, [email protected]. Web site: www.kantorlaw Los Angeles, based in Santa Monica. Practice is CA 92660, (949) 376-9977, fax (949) 494-3448, .net. Contact Glenn Kantor or Alan Kassan. limited to family law since 1969, 44 years, 6 attor- e-mail: [email protected]. Web site: Administrative appeals, litigation, state and federal neys including 3 certified family law specialists as californiafranchiseattorney.com. Contact Rodney court, appellate work, free consultations, and all well as over 20 staff members. After-hours and Hatter. Board Certified Franchise and Distribution cases are taken on a contingency fee basis. See weekend appointments available, FREE CONSUL- Law Specialist—California State Bar Board of Legal display ad on page 34. TATION/REASONABLE FEES. REMEMBER, EXPE- Specialization. Providing advice and assistance to RIENCE COUNTS!. See display ad on page 35. franchisors, franchisees, and other businesses regarding issues of franchising and alternative distrib-

36 Los Angeles Lawyer June 2013 ution programs since 1985. Previously General Counsel to California’s largest franchisor. CHARLES PEREYRA-SUAREZ HEALTH AND LIFE INSURANCE CLAIM — ARBITRATOR AND MEDIATOR — KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324, RELEVANT EXPERIENCE: (818) 886-2525, fax (818) 350-6272, e-mail: • Trial/Appellate Attorney, U.S. Justice Department [email protected]. Web site: www.kantorlaw Civil Rights Division .net. Contact Glenn Kantor or Alan Kassan. Administrative appeals, litigation, state and federal • Federal Prosecutor in Los Angeles court, appellate work, free consultations, and all • Litigation Partner in Two National Law Firms cases are taken on a contingency fee basis. See • Judge Pro Tem, Los Angeles County Superior Court display ad on page 34. • Diverse ADR and Expert Witness Practice

HEALTHCARE LAW 445 S. FIGUEROA STREET, SUITE 2700, LOS ANGELES CA 90071 LAW OFFICES OF MICHAEL GOCH, APC Tel 213.623.5923 Fax 213.623.1890 http://www.cpsarbitration.com 5850 Canoga Avenue, Suite 400, Woodland Hills, CA 91367, (818) 710-7190, fax (818) 710-7191, e-mail: [email protected]. Web site: MichaelGoch.com. Contact Michael Goch. Licensing and related disciplinary proceedings with EMPLOYMENT LAW REFERRALS emphasis on healthcare practitioners, as well as Department of Health Services matters and related Paying Highest Referral Fees (Per State Bar Rules) issues, from investigatory stage through trial and writ proceedings. Degrees/licenses: JD Southwestern University School of Law, Cum Laude, 1978; admitted in California since 1978. Also admitted in Central, Honored to receive regular employment referrals from Eastern, Northern, Southern District and Ninth Circuit. over 100 of Californiaʼs ﬁ nest attorneys

IMMIGRATION AND NATIONALITY LAW Stephen Danz 877.789.9707 LAW OFFICE OF ELI M. KANTOR & Associates 9595 Wilshire Boulevard, Suite 405, Beverly Hills, Main ofﬁ ce located in Los Angeles and nearby ofﬁ ces in Pasadena, CA 90212, (310) 274-8216, fax (310) 273-6016, Orange County, Inland Empire & San Diego e-mail: [email protected]. Web site: www Stephen Danz, Senior Partner 11661 San Vicente Boulevard, Suite 500, Los Angeles, CA 90049 .beverlyhillsimmigrationlaw.com. Contact Eli Kantor. Specializes in all aspects of business, entertainment, investor, and family immigration law.

INSURANCE LAW GLADSTONE MICHEL WEISBERG WILLNER & SLOANE, ALC 4551 Glencoe Avenue, Suite 300, Marina del Rey, CA 90292, (310) 821-9000, fax (310) 775-8775, email: [email protected]. Web site: www.GladstoneMichel.com. Contact Gene Weisberg. Gladstone Michel attorneys have long specialized in first and third party insurance coverage, bad faith litigation, and insurance fraud investigation. We are a highly respected leader in this field and service an increasingly diverse population of insurance carriers, handling precedent-setting, high- exposure cases in state and federal courts, arbitrations and mediations, as well as the more routine coverage matters. We have defended thousands of claims arising out of catastrophic events such as the state’s wildfires and the 1994 Northridge earth- quake. KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324, (818) 886-2525, fax (818) 350-6272, e-mail: [email protected]. Web site: www.kantorlaw.net. Contact Glenn Kantor or Alan Kassan. Adminis- trative appeals, litigation, state and federal court, appellate work, free consultations, and all cases are taken on a contingency fee basis. See display ad on page 34.

INSURANCE BAD FAITH CHEONG, DENOVE, ROWELL, BENNETT & KARNS 10100 Santa Monica Boulevard, Suite 2460, Los Angeles, CA 90067, (310) 277-4857, fax (310) 277-

Los Angeles Lawyer June 2013 37 5254, e-mail: fi[email protected]. Web site: LEGAL MALPRACTICE We represent individuals and small to mid-sized www.cdrbk.com. Contact Lorraine Jackson or businesses throughout Southern California. Our Jack Denove. Attorneys at Cheong, Denove, Row- GLADSTONE MICHEL WEISBERG WILLNER goal is to arrive at a cost-effective resolution to a ell, Bennett & Karns have successfully represented & SLOANE, ALC dispute while protecting a client’s financial and busi- clients for 35 years in major injury cases, insurance 4551 Glencoe Avenue, Suite 300, Marina del Rey, ness interests. We value long-term relationships bad faith, products liability and medical malpractice. CA 90292, (310) 821-9000, fax (310) 775-8775, with clients, so we never undertake any action that Senior partner John Denove has received numer- e-mail: [email protected]. Web site: would jeopardize a client’s best interests. ous awards for his trial successes and commitment www.GladstoneMichel.com. Contact Allen GILCHRIST & RUTTER PROFESSIONAL to representing the rights of the injured, including Michel. Gladstone Michel attorneys have more CORPORATION Trial Lawyer of the Year and Los Angeles Best than three decades of jury trial and appellate experi- Lawyer. He is the past president of the Consumer ence representing lawyers and law firms and other 1299 Ocean Avenue, Suite 900, Santa Monica, CA Attorneys Association of Los Angeles and the Ital- professionals accused of professional malpractice. 90401, (310) 393-4000, fax (310) 394-4700. Web ian American Lawyers Association; he is diplomate Allen Michel, chair of the firm’s Professional Liability site: www.gilchristrutter.com. Contact Frank of ABOTA and is the current president of the Los Group, has successfully tried major legal malprac- Gooch. Represent clients as plaintiffs and defen- Angeles Chapter of ABOTA. He is also on the tice cases arising out of claimed errors ranging dants at trial and appellate levels in state and federal board of directors of the Consumer Attorneys of from negligence to conflicts of interest, violation of courts, as well as mediations/arbitrations. Practice California. He has tried more than 100 civil jury tri- the Rules of Professional Conduct, and other areas include business (unfair competition, antitrust, als to a verdict. breaches of fiduciary duty. Our Professional Liability shareholder disputes, entertainment/intellectual Group has represented attorneys in a wide variety property litigation), real estate (breach of lease and INTELLECTUAL PROPERTY of substantive areas, including entertainment law sales agreements, quite title, easement, owner-con- and intellectual property matters, real property and tractor and landlord-tenant disputes, environmental CISLO & THOMAS LLP mechanics lien law, estate planning and tax issues, clean-up) securities (defense against enforcement 1333 2nd Street, Suite 500, Santa Monica, bankruptcy matters, and corporate advice, as well actions brought by the SEC, NASD and CDC) and CA 90401, (310) 451-0647, fax (310) 394-4477, as in fee disputes, malicious prosecution cases, insurance (e.g., coverage disputes, breach of con- e-mail: [email protected]. Web site: www anti-SLAPP motions and appeals, and disciplinary tract, bad faith and punitive damage actions). .cisloandthomas.com. Contact Daniel M. Cislo. proceedings. Cislo & Thomas LLP handles all aspects of patent, LAW OFFICES OF CHARLES PEREYRA-SUAREZ copyright and trademark searching, filing, licens- LITIGATION ing, clearance, maintenance, and litigation. Our 445 South Figueroa Street, Suite 2700, Los Ange- BENNETT & ERDMAN goal is to provide the highest Quality Client Care™ les, CA 90071, (213) 623-5923, fax (213) 623-1890, and intellectual property services in Southern Cali- 5670 Wilshire Boulevard, Suite 1400, Los Angeles, e-mail: cpereyra@cpslawfirm.com. Web site: www fornia through our network of offices in Westlake CA 90036, (323) 935-0041, (310) 824-0471, e-mail: .cpslawfirm.com. Contact Charles Pereyra- Village, Santa Monica, and Santa Barbara. Our [email protected]. Web site: www.bennet- Suarez. Charles Pereyra-Suarez has handled a managing partner, Daniel M. Cislo, was recently terdman.com. The attorneys at Bennett & Erdman broad range of civil and criminal matters during named a Super Lawyer in Intellectual Property for provide aggressive representation for clients facing three decades of practice. Mr. Pereyra-Suarez’s 2013. See display ad on page 37. or engaged in litigation, including business or real experience includes complex business litigation, estate dispute in court or in mediation or arbitration. white-collar criminal defense, whistle-blower cases, international, government contracts, healthcare, environmental, antitrust, civil rights and First Amend- ment representation. He is active as a mediator and CIVIL RIGHTS ATTORNEY arbitrator of various litigation and business disputes. See display ad on page 37. DALE K. GALIPO LONG TERM CARE KANTOR & KANTOR LLP SPECIALIZING IN POLICE MISCONDUCT CASES 19839 Nordhoff Street, Northridge, CA 91324, (818) 886-2525, fax (818) 350-6272, e-mail: [email protected]. Web site: www.kantorlaw.net. Contact Glenn Kantor or Alan Kassan. Adminis- Recent Civil Rights trative appeals, litigation, state and federal court, Accomplishments: appellate work, free consultations, and all cases are taken on a contingency fee basis. See display ad • 9 Seven-Figure Verdicts/Settlements on page 34. • 24 Six-Figure Verdicts/Settlements LONG TERM DISABILITY KANTOR & KANTOR LLP • Prevailed in 17 Jury Trials 2011- 19839 Nordhoff Street, Northridge, CA 91324, 2013 (818) 886-2525, fax (818) 350-6272, e-mail: [email protected]. Web site: www.kantorlaw.net. • Recipient of the 2012 Erwin Contact Glenn Kantor or Alan Kassan. Adminis- Chemerinsky Defender of the trative appeals, litigation, state and federal court, Constitution Award appellate work, free consultations, and all cases are taken on a contingency fee basis. See display ad on page 34. • Three Published Opinions MEDIATION • Selected for the 2013 Southern California Super Lawyers List GREG DAVID DERIN 1925 Century Park East, Suite 1700, Los Angeles, CA 90067, phone (310) 552-1062, fax (310) 552- 1068, e-mail: [email protected] , web site: www .derin.com. Contact Greg David Derin. Trained at ACCEPTING REFERRALS AND CO-COUNSEL RELATIONSHIPS Harvard Law School’s Mediation Workshop, which he assisted in teaching 2004-2012, Greg brings [email protected] | Woodland Hills | 818.347.3333 more than 30 years of litigation experience to his role as a mediator and arbitrator. Greg is a past

38 Los Angeles Lawyer June 2013 Chair of the California State Bar ADR Committee, a fellow of the Chartered Institute of Arbitrators, a GREG DAVID DERIN - MEDIATOR & ARBITRATOR member of the California and National Academies of Distinguished Neutrals, the CPR Panel of Distin- HONESTY • FAIRNESS • COMMITMENT • CREATIVITY • EXCELLENCE guished Neutrals, the American Arbitration Associa- tion Roster of Neutrals, the Arbitration Panel of the AREAS OF EXPERTISE: Independent Film and Television Alliance (IFTA), and • Entertainment and Contract and Business Torts the World Intellectual Property Organization (WIPO) • Intellectual Property Mediation and Arbitration Panels. Named by Los • Real Property Employment Angeles and Law & Politics magazines as a Super • • Corporate and Partnership Lawyer in ADR, Intellectual Property Litigation and TM Sports and Entertainment Law (2006-2013), and by “Power Mediator” - The Hollywood Reporter, ADR SuperLawyer the Hollywood Reporter as a Power Mediator. Greg Faculty - Harvard Negotiation Institute (2004-2012) concentrates his mediation and arbitration practices Fellow - Chartered Institute of Arbitrators on business, commercial, entertainment, intellectual property, employment, and real estate matters. See 310.552.1062 I www.derin.com display ad on page 39. 1925 CENTURY PARK EAST, LOS ANGELES, CALIFORNIA 90067 THE HOLMES LAW FIRM 225 South Lake Avenue, Suite 300, Pasadena, CA 91101, (626) 432-7222, fax (626) 432-7223, e-mail: [email protected]. Web site: www .theholmeslawfirm.com. Contact Reginald MINA N. SIRKIN, ESQ. A. Holmes. Esq. Intellectual property, employment and international law. Arbitrator, mediator, referee, CERTIFIED SPECIALIST ATTORNEY IN ESTATE PLANNING, special master, and private judge in the resolution of PROBATE & TRUST LAW BY THE BOARD OF LEGAL complex business disputes. See display ad on SPECIALIZATION OF THE STATE BAR OF CALIFORNIA page 2. Trust & Probate Litigation, Specials Needs Trusts & NAME AND GENDER CHANGE Structured Settlements BENNETT & ERDMAN 5670 Wilshire Boulevard, Suite 1400, Los Angeles, tel 818-340-4479 • email [email protected] CA 90036, (323) 935-0041, (310) 824-0471, e-mail: www.SirkinLaw.com [email protected]. Web site: www.bennetterdman.com. Bennett & Erdman represents clients 21550 OXNARD STREET, THIRD FLOOR, WOODLAND HILLS, CALIFORNIA 91367 seeking to change their names to formalize a change in status, to honor a relationship, to bring one’s name into congruence with one’s identity, to establish a connection to a chosen religion or to re- claim one’s heritage. The firm is also one of only a few law firms in the Los Angeles area that assists transitioning persons with the process of legal gen- IF WE CANNOT COLLECT der change, with or without an accompanying legal name change. YOUR COMMERCIAL OR PATENT BUSINESS DEBT OR CISLO & THOMAS LLP 1333 2nd Street, Suite 500, Santa Monica, CA 90401, (310) 451-0647, fax (310) 394-4477, JUDGMENT, NOBODY CAN! e-mail: [email protected]. Web site: www .cisloandthomas.com. Contact Daniel M. Cislo. Cislo & Thomas LLP handles all aspects of patent, “Ron is terrific. He knows everything there is to know about collection law and has the common sense smarts to get copyright and trademark searching, filing, licensing, things done. We have worked with him for several years, and he has done a fabulous job for our company.”—Daniel R. Milberg, Senior Vice President, Milberg Factors, Inc., New York, New York clearance, maintenance, and litigation. Our goal is to provide the highest Quality Client Care™ and in- “I needed some assistance on a fairly old judgment that my client’s prior attorney had obtained. Ron not only helped, tellectual property services in Southern California but the judgment is now, for the first time in over 10 years being paid. Ron went all the way to Florida to collect on a California Federal Bankruptcy Judgment and was successful in obtaining a levy that forced the debtor to fall to his through our network of offices in Westlake Village, knees and settle the case. After 10 years of chasing, my client is extremely happy with Ron’s services. Ron is probably Santa Monica, and Santa Barbara. Our managing the premiere collection attorney in California. His contacts, his abilities, and his demeanor are the best for a collec- partner, Daniel M. Cislo, was recently named a tion attorney. Compassionate and understanding but, unlike many other collection attorneys, he will not back down even against the fiercest opponent or debtor. A class act—one that would be very hard to match. Oh, and by the way, Super Lawyer in Intellectual Property for 2013. See he is a nice guy too.”—Richard D. Marks, Attorney, Richard D. Marks, Professional Corporation display ad on page 37. “Ron Slates is the most effective collection lawyer with whom I have ever worked. He is responsive, diligent, and truly professional. All clients to whom I have referred Ron have indicated to me that he has done a fabulous job on their PERSONAL INJURY EXPERT behalf.”—Robert F. Millman, Managing Partner, Littler Mendelson, Los Angeles, California CHEONG, DENOVE, ROWELL, BENNETT & KARNS AGGRESSIVE, COST-EFFECTIVE, RESPONSIVE SERVICE 10100 Santa Monica Boulevard, Suite 2460, Los v LET US PROVE OURSELVES TO YOU v Angeles, CA 90067, (310) 277-4857, fax (310) 277- Hybrid (partial contingency) fees available in select cases after in-depth asset search. 5254, e-mail: fi[email protected]. Web site: www .cdrbk.com. Contact Lorraine Jackson or Jack Denove. Attorneys at Cheong, Denove, Rowell, Ronald P. Slates, P.C. Bennett & Karns have successfully represented 523 WEST 6TH STREET, SUITE 502, LOS ANGELES, CA 90014 clients for 35 years in major injury cases, insurance 213.624.1515 | FAX 213.624.7536 | E-MAIL [email protected] bad faith, products liability and medical malpractice. WEB SITES www.rslateslaw.com & www.ronslateslaw.com Senior partner John Denove has received numerous

Los Angeles Lawyer June 2013 39 awards for his trial successes and commitment to easements, unlawful detainers, and receiverships. meetings, due process mediations and hearings, representing the rights of the injured, including Trial See display ad on page 4. and related federal court actions. She also assists Lawyer of the Year and Los Angeles Best Lawyer. families with expulsions and in securing eligibility He is the Past President of the Consumer Attorneys REAL PROPERTY and services from regional centers. Association of Los Angeles and the Italian American RUBIN & EAGAN, APC Lawyers Association; he is diplomate of ABOTA and STATE BAR AND CRIMINAL DEFENSE 1901 Avenue of the Stars, Suite 1100, Los Angeles, is the current president of the Los Angeles Chapter CA 90067, (310) 788-0983, fax (310) 788-0984, JAMES R. DIFRANK, A PROFESSIONAL of ABOTA. He is also on the board of directors of the e-mail: [email protected]. Web site: www LAW CORPORATION Consumer Attorneys of California. He has tried more .rubineagan.com. Contact Sheldon Rubin, Esq. 12227 Philadelphia Street, Whittier, CA 90601, than 100 civil jury trials to a verdict. Providing insureds, insurers, owners and lenders (562) 789-7734, fax (562) 789-7735, e-mail: THE LAW OFFICES OF DALE K. GALIPO services for disputes and matters which involve high [email protected]. Web site: www.bardefense 21800 Burbank Boulevard, Suite 310, Woodland liability exposure and complex legal and factual is- .net. Contact Stephen Gonzales. We defend pro- Hills, CA 91367, (818) 347-3333, fax (818) 347- sues. Forty years of experience concentrated in title fessionals including attorneys, physicians, and other 4118, e-mail: [email protected], or dalegalipo insurance, real property and insurance disputes and licensed individuals, in disciplinary, criminal, and @galipolaw.com. Contact Dale Galipo. Specializ- transactions. Performing these services throughout other legal matters. Seasoned and experienced at- ing in police misconduct; deadly force, excessive the United States in most of the commercial centers torney with over 20 years of experience, including force, wrongful police shootings, taser gun injuries, of the country. Involved in and responsible for more experience as former senior State Bar prosecutor and other police negligence. See display ad on 300 high liability title insurance claims and real es- and senior State Bar counsel. Representation in page 38. tate workouts, most involving between $1 and 200 moral character, admissions, and other special pro- million in potential liability. ceedings in State Bar and superior courts. Free 30 MICHAEL LOUIS KELLY minute consultations. See display ad on page 34. 2041 Rosecrans Avenue, 3rd Floor, El Segundo, REAL PROPERTY FORECLOSURES CA 90245, (310) 536-1000, fax (310) 536-1001, TAXATION LAW RICHARD G. WITKIN e-mail: [email protected]. Web site: HOCHMAN, SALKIN, RETTIG, TOSCHER & www.CourtroomWarrior.com. Contact Michael 530 S. Glenoaks Boulevard, Suite 207, Burbank, PEREZ Louis Kelly. Mr. Kelly is recognized as one of the CA 91502, (818) 585-7302, fax (818) 845-4015. leading 500 plaintiff lawyers in the United States, Contact Richard G. Witkin. Specializing in nonju- 9150 Wilshire Boulevard, Suite 300, Beverly Hills, and year after year is voted a Southern California dicial foreclosures for the past 25 years. See dis- CA 90212-3414, (310) 281-3200, fax (310) 859- Super Lawyer. His numerous record-setting jury play ad on page 5. 1430, e-mail: [email protected]. Web site: www verdicts have dramatically impacted the legal land- .taxlitigator.com. Contact Sharyn Fisk. The firm scape in California. Mr. Kelly utilizes a team of tal- RECEIVER/BANKRUPTCY specializes in federal and state civil tax and criminal ented lawyers whose varying backgrounds, training, SALTZBURG, RAY & WEISSMAN, LLP tax litigation controversies with federal, state, and local taxing authorities, white collar crime criminal and experience combine to create a formidable liti- 12121 Wilshire Boulevard, Suite 600, Los Angeles, defense, forfeitures, estate and business planning, gation team. CA 90025, (310) 481-6700, fax (310) 481-6707, probate, tax-exempt organizations, real estate, e-mail: [email protected], RWeissman@rwreceiver business and corporate transactions. PRIVATE DISPUTE RESOLUTION .com. Web site: www.srblaw.com. Contact David COMMISSIONER ANITA RAE L. Ray, Esq or Richard Weissman, Esq. Special- TITLE INSURANCE SHAPIRO (RET) izes in handling complex receivership matters, such RUBIN & EAGAN, APC Alternative Dispute Resolution. P.O. Box 1508, as partnership and corporate dissolutions, including Brea, CA 92822-1508, cell (714) 606-2649, phone/ law firm dissolutions, and government enforcement 1901 Avenue of the Stars, Suite 1100, Los Angeles, fax (714) 529-0415, e-mail: privatejudge@adr-shapiro receivership actions, including actions brought by CA 90067, (310) 788-0983, fax (310) 788-0984, .com. Web site: http://adr-shapiro.com. Contact the California Department of Corporations, Depart- e-mail: [email protected]. Web site: www Anita Rae Shapiro. Mediation, arbitration, tempo- ment of Real Estate, Commodities Future Trading .rubineagan.com. Contact Sheldon Rubin, Esq. rary judge, accounting referee, discovery referee, in Commission, Securities and Exchange Commission, Providing insureds, insurers, owners and lenders probate (wills, trust, conservatorships), family law, and Federal Trade Commission. Nationally recog- services for disputes and matters which involve high and all areas of civil law, including real estate. See nized in both the lender and litigation communities liability exposure and complex legal and factual is- display ad on page 41. as qualified to assist in complicated and commer- sues. Forty years of experience concentrated in title cially sophisticated liquidations, reorganizations, and insurance, real property and insurance disputes and REAL ESTATE LITIGATION ongoing business operations. See display ad on transactions. Performing these services throughout page 41. the United States in most of the commercial centers BENNETT & ERDMAN of the country. Involved in and responsible for more 5670 Wilshire Boulevard, Suite 1400, Los Angeles, SOCIAL SECURITY DISABILITY/SSI 300 high liability title insurance claims and real es- CA 90036, (323) 935-0041, (310) 824-0471, LAW OFFICE OF JERRY PERSKY tate workouts, most involving between $1 and 200 e-mail: [email protected]. Web site: www million in potential liability. .bennetterdman.com. The attorneys at Bennett & 5657 Wilshire Boulevard, Suite 410, Los Angeles, Erdman provide aggressive representation for CA 90036, (323) 938-4000, fax (323) 938-4068, TRADEMARK LAW clients facing or engaged in litigation, including busi- e-mail: [email protected]. Web site: www CISLO & THOMAS LLP ness or real estate dispute in court or in mediation/ .jerryperskylaw.com. We represent Social Security arbitration. We represent individuals and small to claimants to help them qualify for disability benefits 1333 2nd Street, Suite 500, Santa Monica, mid-sized businesses throughout Southern Califor- or to help them with termination of benefits or over CA 90401, (310) 451-0647, fax (310) 394-4477, nia. Our goal is to arrive at a cost-effective resolu- payments. e-mail: [email protected]. Web site: www tion to a dispute while protecting a client’s financial .cisloandthomas.com. Contact Daniel M. Cislo. and business interests. We value long-term relation- SPECIAL EDUCATION LAW Cislo & Thomas LLP handles all aspects of patent, ships with clients so we never undertake any action VALERIE VANAMAN copyright, and trademark searching, filing, licensing, clearance, maintenance, and litigation. Our goal is that would jeopardize a client’s best interests. Newman Aaronson Vanaman, 14001 Ventura to provide the highest Quality Client Care™ and in- Boulevard, Sherman Oaks, CA 91423, (818) 990- HURON LAW GROUP tellectual property services in Southern California 7722, fax (818) 501-1306, e-mail: intake@navlaw 1875 Century Park East, Suite 1000, Los Angeles, through our network of offices in Westlake Village, .net. Web site: www.navlaw.net. Contact Intake CA 90067, (310) 284-3400, fax (310) 772-0037, Santa Monica, and Santa Barbara. Our managing Department. For four decades, Valerie Vanaman e-mail: [email protected]. Web site: www partner, Daniel M. Cislo, was recently named a has been providing knowledgeable and compas- .huronlaw.com. Contact Jeffrey Huron. HLG has Super Lawyer in Intellectual Property for 2013. See sionate representation to people who need help ob- successfully tried and arbitrated all types of real es- display ad on page 37. taining services from private and government agen- tate disputes. Our attorneys have past experience cies. Since the inception of her firm, Newman LAW OFFICE OF PAUL D. SUPNIK handling disputes involving, purchase and sale Aaronson Vanaman, in 1981, she has been the ac- agreements, leases, guarantees, commercial real 9401 Wilshire Boulevard, Suite 1250, Beverly Hills, knowledged leader in representing clients at IEP estate loans, partnerships, joint ventures, brokers, CA 90212, (310) 859-0100; fax (310) 388-5645,

40 Los Angeles Lawyer June 2013 email: [email protected]. Web site: www.supnik .com; www.NotSoBIGLAW.com. Trademark litigation in federal courts; local counsel for out of town firms; trademark registration in the United States; FIREARMS LAW trademark registration internationally in association with foreign counsel; trademark availability searches; Trademark Trial and Appeal Board proceedings; licensing; right of publicity; domain name MICHEL & ASSOCIATES, P.C. matters. Past chair of both LACBA’s Entertainment and Intellectual Property Section as well as Interna- TEL 562.216.4444 MichelLawyers.com CalGunLaws.com tional Law Section. See display ad on page 35. | | 180 EAST OCEAN BLVD., SUITE 200, LONG BEACH, CA 90802-4079 WATER LAW BEST BEST & KRIEGER LLP 300 South Grand Avenue, 25th Floor, Los Angeles, CA 90071, (213) 617-8100, fax (213) 617-7480, LEGAL FIREPOWER! e-mail [email protected]. Web site:www.BBKlaw .com. Contact Eric L. Garner. From its California roots helping to implement the State Water Project, Best Best & Krieger is now a nationally and internationally recognized force in water law. The firm represents agencies that serve water to more than 21 million people, in addition to advising developer, Anita Rae Shapiro agricultural, and manufacturing clients. We aid in the SUPERIOR COURT COMMISSIONER, RET. acquisition, development, and maintenance of sur- face and ground water rights, and navigate issues related to regional management of water supplies PRIVATE DISPUTE RESOLUTION and water transfers. PROBATE, CIVIL, FAMILY LAW WORKERS’ COMPENSATION PROBATE EXPERT WITNESS AGM LAW OFFICES TEL/FAX: (714) 529-0415 CELL/PAGER: (714) 606-2649 900 Lafayette Street, Suite 604, Santa Clara, CA E-MAIL: [email protected] 95050, (408) 795-1515, fax (408) 795-1519, e-mail: http://adr-shapiro.com [email protected]. Web site: www.agmlaw.com. Contact Antoinette Mills. Ms. Mills represents in- sured and uninsured employers in the litigation of all aspects of the California Workers’ Compensation law. This includes the defense of serious and willful claims under Labor Code Section 4553 and Discrimi- nation claims under Labor Law Section 132a. LAW FIRM OF ROWEN, GURVEY & WIN DAVID L. RAY 5900 Sepulveda Boulevard, Suite 500, Van Nuys, CA 91411, (818) 981-9960, fax (818) 781-8512. RICHARD WEISSMAN Specializing in representing injured workers in workers’ compensation matters for over 30 years. Exten- SALTZBURG, RAY & WEISSMAN, LLP sive experience with fibromyalgia and other chronic pain syndromes, as well as other complex medical RECEIVERSHIP ACTIONS conditions • Partnerships and Corporate Dissolutions WAX & WAX LAW OFFICES 411 North Central Avenue, Suite 520, Glendale, • Government Enforcement Receivership Actions CA 91203, (818) 247-1001, fax (818) 247-2421. • Partition Actions/Marital Dissolution Contact Alan Wax. We are certified specialists in Workers’ Compensation Law. We are on the Board of Governors of the California Applicants’ Attorneys Association with over 50 years of experience.

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Los Angeles Lawyer June 2013 41

Advanced Mediation Receivers in Restructurings, Liquidations, and Regulatory Actions Skills Practicum On June 7, 8, and 14, from 9 A.M. to 4 P.M. ON TUESDAY, JUNE 18, the Remedies Section will host a program that examines each day, the Center for Civic Mediation restructuring, liquidating, and regulatory receiverships. As the real estate will host an interactive course that market generally improves, the focus of receivers, counsel, and clients will turn includes extensive practice and coaching to these non-real-estate forms of receiverships. Speakers Kathy Bazoian Phelps, in advanced mediation skills and a John W. Berry, Benjamin R. King, Ted Lanes, Richard P. Ormond, Thomas minimum of 10 hours of litigated case Seaman, and Joel Bruce Weinberg will outline the shift in focus and fresh dose training, including 9 hours of lecture and of creative energy that will be needed to reach optimal outcomes for public and 9 hours of role-playing, observation, private interest-holders. The program will take place at LACBA, 1055 West 7th coaching, and feedback. Lecture topics Street, 27th floor, Downtown. Parking is available at 1055 West 7th and nearby include assessing the conflict, consensus lots. On-site registration will begin at 5:30 P.M. and the meal at 6, with the building, problem-solving techniques, program continuing from 6:30 to 8:30. The prices below include the meal. The and managing multiparty, multi-issue registration code number is 011916. agendas, legal ethics, distributive and $25—CLE+ member integrative bargaining, and case studies $60—Remedies, Litigation, or Real Property Section member from a range of legal practice areas. The $80—LACBA member practice of mediation is highly focused on $99—all others the interactions not only between the 2 CLE hours disputants but also between the disputants and the third-party neutral. The advanced practicum aims to develop An Amazing Year at the U.S. Supreme Court more advanced skill sets of the reflective practitioner as well as key elements, ON TUESDAY, JUNE 4, the Senior Lawyers Section will host a program featuring Erwin principles, and strategies in Chemerinsky and Howard Miller, two of California’s premier legal minds, who will interventions of the interactive processes discuss historic issues presently before the U.S. Supreme Court, including: 1) in mediation. Participants practice more Proposition 8 and the Defense of Marriage Act, 2) class actions, arbitration, and advanced skills and participate heavily in intellectual property, 3) civil rights: affirmative action and voting, and 4) other issues role plays and other group facilitations. raised by the audience. The program will take place at LACBA, 1055 West 7th Street, Prior mediation training is required for 27th floor, Downtown. Parking is available at 1055 West 7th and nearby lots. On-site this course. The program will take place registration will begin at 5:30 P.M. and the meal at 6, with the program continuing at the LACBA, 1055 West 7th Street, 27th from 6:30 to 9:30. Parking is available at 1055 West 7th and nearby lots. This event is floor, Downtown. Parking is available at also available as a live Web cast. The registration code number is 011910. 1055 West 7th and nearby lots. $55—CLE+ member The registration code number is 011996. $65—Senior Lawyers Section member $495—special group rate (5 or more) per $100—LACBA member (includes section membership, if eligible) person $115—all others $515—general price 3.25 CLE hours 18 CLE hours, with 4 hours of ethics and 2 hours in elimination of bias

The Los Angeles County Bar Association is a State Bar of California MCLE approved provider. To register for the programs listed on this page, please call the Member Service Department at (213) 896-6560 or visit the LACBA Web site at http://calendar.lacba.org, where you will ﬁnd a full listing of this month’s LACBA programs.

Los Angeles Lawyer June 2013 43 closing argument BY TOM MCCURNIN AND GREG R. CHAN

What Business Clients Should Know about Smart Phones

MANY COMPANIES HAVE NOT fully addressed the issue of how much Another issue is data synchronization. In order to effectively pre- data smart phones can generate, hold, and access. A typical smart serve, control, and manage business data, employee devices should phone can capture location data from cell towers and WiFi net- be synchronized to the company’s server. This minimizes the amount works, among other sources. This information can be correlated of unique data on the device and is vital to keeping control of com- with the time stamps of texts, e-mail, and phone calls. For example, pany data. Microsoft Exchange is one application that provides syn- it is simple to imagine a courtroom display of a map of Santa Monica chronization and can give an employer some control over the e-mail that shows the location from which a client’s employee created each and and other data that flow to and from employee devices. e-mail message, text message, and phone call on a crucial day. The Synchronization helps an employer manage data but does not prevent time of each message could show that he made communications the kind of problem described in the example. that he previously denied making. To prevent a courtroom scenario like that of the example, which To continue the example, the data on the smart phone may have been obtained after the employee left the company. The client’s IT department deleted the data from the Mobile devices have become ubiquitous so quickly that many employee’s phone immediately after the employee left. Without the company’s knowledge, however, the employee had performed employers have not kept pace with their data policies. backups of the device on his company-issued laptop and to other locations on the company’s network. As a result, multiple versions of the employee’s phone data involved preservation of data beyond the date by which it should be existed not only on hard drives under the company’s control but also deleted, the client should not allow devices used for work to be on the user’s personal online backup account. backed up on an employee’s personal home computer or other devices the client does not control. Backups should be performed automat- BYOD ically and consistently according to the client’s document retention Attorneys should therefore advise their business clients to examine policy. As a general rule, e-mail should be preserved longer than text their policies regarding smart phones and similar devices that employ- messages and voice mail, but the exact choices to be made for each ees use for business. The first question a business client may address type of data will depend on such factors as the regulatory environ- is whether to allow employees to use their personally owned devices. ment in which the client operates and the client’s business needs. A “bring your own device” (BYOD) rule saves a company money, but Another factor for an employer client to consider is that devices it also creates a large number of complications that are unnecessary constantly change. This factor weighs against a BYOD policy. If if the company creates and enforces a ban on company work on per- synchronization and backups are to be handled uniformly, the list of sonal devices. Accordingly, many employers simply supply devices to allowed devices needs to be relevant and updated at least every few employees and instruct them to use the devices only for business and years. When the list is updated, some devices may no longer be not to use any personal device for business. However, if BYOD is allowed for work. In all such cases, the client’s goal should be to pre- allowed, each employee needs to sign a detailed agreement acknowl- vent the loss of control over the company data on the devices. edging that while the devices are theirs, the company controls the data Although devices may have their data cleaned, it may be cheaper and and how it is used. more effective to use a hammer and an e-waste bin, even if a depart- If a BYOD policy is chosen, various questions must be addressed. ing employee must be paid for a personally owned device. Another For example, what kind of devices should be allowed? In order to man- policy consideration is whether the departing employee is or may be age data, synching, and backups uniformly, the choice of devices needs involved in litigation. to be limited to a handful. Furthermore, whether a client company Mobile devices have become ubiquitous so quickly that many has a BYOD policy or issues devices, a single wireless supplier should employers have not kept pace with their data policies. For this rea- be used to control centralized backups. Another issue is the software son, counsel need to familiarize themselves with the issues and be pre- and applications that the client may be allowed to install on the device. pared to recommend realistic policies that can adhere to the regula- An endless number of applications are available, and it is unclear how tory framework under which a client employer operates while they all integrate or conflict with the business applications that the minimizing liability. I client’s IT department supports. More critical is whether and how these applications can access data on the device, which may be confiden- Tom McCurnin is a partner at Barton, Klugman & Oetting and litigates trade tial. Another question is whether business data on the device can be secret and business divorce cases. Greg R. Chan is the senior manager of lit- encrypted and kept separate from personal data. igation technology for Bingham McCutchen in Los Angeles.

44 Los Angeles Lawyer June 2013

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