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Tag: 2013 News

Applicant Attorney Wins Malicious Prosecution Claim Against Attorneys Who Sued Her for Malpractice

Martina A. Silas represented Ross Gunnell in a personal injury action filed in 1995 resulting in a jury award that was later overturned on the grounds that worker’s compensation was the exclusive remedy. Gunnell and others were unskilled laborers who worked for four and one-half months on a cleaning project at Metrocolor Laboratories, Inc. (Metrocolor), which owned a facility to develop and process movie and television film.Metrocolor provided no protective clothing other than rubber gloves, which rapidly disintegrated. Gunnell was never told what the solution was, but later learned it was Absorb, a solvent/degreaser, that contained a hazardous substance known to cause brain and nervous system damage and that was readily absorbed through the skin. Gunnell suffered from anxiety and panic attacks, loss of cognitive function, and respiratory problems, and was disabled from work as a laborer.

The jury returned a verdict of $1,650,000 in compensatory damages and $5 million in punitive damages. Pursuant to Metrocolor’s motion for judgment notwithstanding the verdict based on the holding of Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, the court found that pursuant to Labor Code section 3602, subdivision (a), worker’s compensation provided Gunnell’s exclusive remedy. The Court of Appeal in Gunnell v. Metrocolor Labs, Inc., 92 Cal.App.4th at page 714 affirmed the trial court

Gunnell then filed a malpractice action against Silas, asserting she failed to assert a meritorious defense to worker’s compensation exclusivity, and had misappropriated funds. Gunnell was represented by James Ellis Arden in that action. Silas’s motion for summary judgment was granted in Gunnell’s malpractice action.

In 2008, Silas filed her complaint for malicious prosecution and abuse of process against Arden, his law firm (Scott, Arden and Salter), and several other attorneys involved in the malpractice action. Silas asserted that (1) Arden continued to prosecute the claim for misappropriation of settlement funds throughout three versions of the complaint, even when confronted with checks Gunnell endorsed and a notarized settlement agreement; and (2) argued that she should have asserted the section 3602 subdivision (b)(2) exception although Gunnell’s own testimony about his chapped hands undermined a key component of the theory, namely that he was unaware of the cause of his physical ailments.The jury found for Silas and awarded $145,756 in legal fees and costs, $30,000 in noneconomic damages, and $125,000 in punitive damages. Arden appealed.

The Court of Appeal in the unpublished opinion of Martina A. Silas v James Ellis Ardien affirmed the trial court. Arden argued, among other issues that the record was devoid of evidence that he lacked probable cause or harbored malice towards Silas in bringing the malpractice action against her. To establish a cause of action for malicious prosecution, a plaintiff must prove that the underlying action was (1) terminated in the plaintiff’s favor, (2) prosecuted without probable cause, and (3) initiated with malice. A claim for malicious prosecution need not be addressed to an entire lawsuit; it may, as in this case, be based upon only some of the causes of action alleged in the underlying lawsuit. A litigant will lack probable cause for his action if he relies upon facts which he has no reasonable cause to believe to be true, or seeks recovery upon a legal theory which is untenable under the facts known to him. Arden continued to prosecute the misappropriation claim by including it in Gunnell’s amended complaints, which were filed even after confronted with Gunnell’s signatures on all relevant documents.

FDA Sets 16 Year Record For New Drug Approvals

U.S. regulators approved 39 new drugs in 2012, the most in 16 years, suggesting that pharmaceutical makers are poised for growth after losing billions of dollars in recent years to generic drug makers because of patent expirations. There were eight approvals in December alone, including a new treatment from Johnson and Johnson called Sirturo for drug-resistant tuberculosis approved on Monday, the first new TB drug in decades.

According to the report in Reuters Health, the pharmaceutical sector badly needs a pick-up in productivity as companies try to refill their medicine chests after heavy losses to generic manufacturers, which have benefited from a string of patent expirations that peaked in 2012. When generics go on the market at a lower cost, sales of name brand drugs plummet. The tally of 39 new drugs and biological products approved by the Food and Drug Administration compares with 30 in 2011 and just 21 in 2010. At least 10 of the drugs had fast track status in 2012, which enabled them to be reviewed more quickly. It is the highest number since 1996, when 53 so-called new molecular entities won a green light.

The FDA has met and exceeded its drug review goals under the Prescription Drug User Fee Act, in which drug companies help fund the drug approval process in return for an agreement by the Food and Drug Administration to meet regulatory deadlines, FDA spokeswoman Sandy Walsh said in an e-mailed statement. She said the “pipeline of new drugs under development remains strong and is growing.”

Major U.S. drug companies have lost about $21 billion in revenue this year from lucrative medicines coming off patent, while the hit for European businesses is about $10 billion, according to ratings agency Standard and Poor’s. This year’s expirations have included Plavix, a heart drug made by Sanofi and Bristol-Myers Squibb, and Seroquel, an antipsychotic made by AstraZeneca.

Winning approval from regulators, however, is only part of the battle for drugmakers. Investors will also be watching closely to see how the new drugs perform commercially once they reach the market, since securing payment for innovative medicines is an increasingly tough fight. “The patent exposure will be less going forward, but where there is still a little bit of uncertainty is how much better the pipelines have become and how strong the recently approved products are,” said Damien Conover, the director of pharmaceutical research at research firm Morningstar Inc.

The 2012 approvals included some medicines that are forecast by analysts to become multibillion-dollar sellers, such as Eliquis for reducing stroke risk in patients with irregular heartbeats from Bristol Myers-Squibb and Pfizer Inc.

But many others are for rare diseases, underscoring the drug industry’s increased focus on specialized, niche products. They include treatments such as a Kalydeco from Vertex Pharmaceuticals Inc for a rare form of the lung disorder cystic fibrosis and Signifor from Novartis AG for Cushing’s disease, caused by over-production of the hormone cortisol. The last drug approval of the year on Monday afternoon was for a drug to relieve symptoms of diarrhea in patients with HIV and AIDS made by Salix Pharmaceuticals Ltd.

There are also encouraging signs that the pick-up in new drug approvals could continue in 2013. The European Medicines Agency said on December 18 that it expected 54 new drug applications in 2013, up from 52 in 2012, 48 in 2011 and 34 in 2010.

Contractors State License Board Printout Insufficient Evidence to Prove Lack of Comp Insurance

Soobok L. Hong hired Creed Consulting Inc. (Creed) to remodel her house. She then sued Creed seeking to recover the $85,000 she paid it under the statute that allows a party to recover “all compensation paid to [an] unlicensed contractor” (Bus. & Prof. Code, § 7031, subd. (b)), on the theory Creed failed to carry workers’ compensation insurance, which resulted in automatic suspension of its contractor’s license during the time it worked on her house. The trial court entered judgment in Hong’s favor for $85,000.

Hong’s complaint alleged that on August 24, 2010, she entered into a written contract with Creed for home remodeling work. The written contract, attached to the complaint as an exhibit, was for work totaling $92,000. Hong alleged she paid Creed $85,000 in progress payments.

Printouts from the Contractors State Licence Board showed that from June 2, 2010, to June 14, 2011, Creed did not have workers’ compensation insurance and was exempted from having workers’ compensation insurance because it certified it had no employees. Creed had employees including Hyunsung Park and Dukyong Lee. The court found on summary judgment that Hong had established Creed had employees during the time it worked on Hong’s house. During that time, Creed did not carry workers’ compensation insurance, and therefore, its contractor’s license was automatically suspended. Moreover, because Creed certified it had no employees, it did not act reasonably or in good faith to maintain its license and could not avail itself of the substantial compliance/good faith exception to section 7031, subdivision (e).

On appeal, Creed contends the trial court erred in taking judicial notice of the printouts from the California Contractors State License Board website (Exhibits 2 and 3) to establish as an undisputed fact that Creed did not carry workers’ compensation insurance during the time it performed work on Hong’s house. Moreover, as that was the only evidence Hong submitted to establish that Hong lacked workers’ compensation insurance, she failed to carry her burden and was not entitled to summary adjudication on her third cause of action..

Hong contends the two website printouts were proper subjects for judicial notice under Evidence Code section 452, subdivision (c) [official acts of legislative, executive, or judicial departments], and subdivision (h) [facts and propositions not reasonably subject to dispute and capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy], because they were from a government website and as such were “self-authenticating.”

The Court of Appeal reversed the summary judgment in favor of Hong in the unpublished opinion of Soobok Hong v Creed Consulting Inc. The Court noted that Hong relied solely on the printouts from a government website reciting that Creed was exempt from carrying workers’ compensation insurance and had certified it had no employees, to prove the essential fact that it did not have workers’ compensation insurance. But the truthfulness of the contents of the printout was subject to dispute and the court could not take judicial notice of the contents of the website printout. Accordingly, Hong failed to establish all the essential elements of her cause of action. Summary adjudication was improper and the judgment must be reversed. We recognize this may well be a hollow victory for Creed. It either had workers’ compensation insurance during the relevant time period or it did not, and that seems an easy enough fact for Hong to prove through properly obtained discovery.

DWC Posts Detailed Instructions for Filing Liens After January 1

The Division of Workers’ Compensation has posted step by step instructions on new lien filing requirements which go into effect January 1, 2013 as part of its implementation for Senate Bill 863. An “at a glance” guide is included to help those who will file or activate a lien.

Filing a Lien
How to file a lien for medical treatment expenses and pay the lien filing fee:

  • Anyone filing a lien for reasonable medical expenses incurred by the injured employee and filed on or after Jan. 1, 2013 is required to pay a lien filing fee of $150.
  • The lien must be filed electronically by one of two methods: : E-Form or Jet File.

Activating a Lien
How to activate a lien and pay the activation fee

  • A $100 fee must be paid for any medical treatment expense lien filed prior to Jan. 1, 2013 in the following situations:
  • A lien claimant files a DOR for a lien conference
  • On or before a lien conference if the lien claimant did not file a DOR
  • To activate and pay for a lien by E-form or JET File use the step by step instructions.
  • All liens will be dismissed as a matter of law if the activation fee is not paid by Jan. 1, 2014.