For example, in Oakland Raiders v. National Football League (2005) 32 Cal. Rptr. 3d 266, the Court dismissed a breach of fiduciary claim, reasoning that the claim was “plainly derivative” because “ ‘the gravamen of the wrong alleged’ [citation] was the mismanagement of the [defendant corporation] and the resultant diversion of its assets.” (Id. at p. 289)

Likewise, in Avikian v. WTC Financial Corp. (2002) 98 Cal.App.4th 1108, the plaintiff shareholders alleged the defendant officers and directors mismanaged or looted corporate assets and entered into self-serving deals to sell assets to third parties, culminating in the corporation’s involuntary liquidation. (Id. at pp. 1111, 1112, 1115.) The trial court held the claims were derivative in nature. The court explained the plaintiffs’ “damages are nothing other than a claim of damage to the corporation generally.” (Id. at p. 1116.)

Similarly, in Nelson v. Anderson (1999) 72 Cal.App.4th 111, minority shareholder alleged that the majority shareholders of the corporation negligently managed the corporation and exercised complete authority, power, legal and financial control over the corporation, including all aspects of its business and management decisions to the exclusion of the minority shareholders. (Id. at p. 125.) The court concluded that the plaintiff could not maintain the suit as a direct action: “Because the gravamen of the complaint is injury to the whole body of its stockholders, it was for the corporation to institute and maintain a remedial action. [Citation.] A derivative action would have been appropriate if its responsible officials had refused or failed to act.” (Id. at pp. 125-126.) The court went on to note that the damages were the loss of corporate profits. (Id. at p. 126.) Since “[s]hareholders own neither the property nor the earnings of the corporation,” any damages that the plaintiff alleged that resulted from such loss of corporate profits “were incidental to the injury to the corporation.” (Id.)

What is more, Corporations Code §800(2)(b), states that: “No action may be instituted” “by any holder of shares,” unless “[t]he plaintiff alleges in the complaint with particularity plaintiff’s efforts to secure from the board such action as plaintiff desires, or the reasons for not making such effort, and alleges further that plaintiff has either informed the corporation or the board in writing of the ultimate facts of each cause of action against each defendant or delivered to the corporation or the board a true copy of the complaint which plaintiff proposes to file.”

Therefore, before filing any derivative lawsuit, the plaintiff must make a demand on the board of directors.

At Kashfian & Kashfian, LLP, we have experience defending and asserting derivative claims, and as your counselor, we will fight vigorously on your behalf. Contact our offices to learn more about the services that we provide.

Please note that Kashfian & Kashfian, LLP makes available the information on this website for general informational purposes only. Internet subscribers and online readers should not rely nor construe the information on this website as legal advice or as a substitute for obtaining legal advice from an attorney licensed in your state.

Nonetheless, California law has an exception to the 3-year rule, known as delayed discovery rule. Under this exception,

The injured party may bring an action based on fraud or mistake more than 3 years after the transaction if the party is able to show that he or she did not discover the facts, and could not with reasonable diligence have discovered them, prior to 3 years before the action. (5 Witkin, Cal. Proc. 5th (2008) Plead, § 929, p. 344.)

Furthermore, the defrauded party has “the burden of . . . proving that [he or she] did not make the discovery until within three years prior to the filing of [the] complaint.” (Samuels v. Mix (1999) 22 Cal.4th 1, 14 [internal citation omitted].) “[I]t is blackletter law that the statute of limitations commences to run after one has knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry.” (Sun’n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671, 701.)

Moreover, a plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1111-1112; see also Fox v. Ethicon Endo–Surgery, Inc. (2005) 35 Cal.4th 797, 807, [“[W]e look to whether the plaintiffs have reason to at least suspect that a type of wrongdoing has injured them.”]) Instead, a plaintiff must show that, once on notice, he or she “took adequate steps then to investigate the matter.” (Jolly v. Eli Lilly & Co., supra, 44 Cal.3d at p. 1112.) “Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights.” (Id., at pp. 1111-1112.) “So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” (Id.) Moreover, subjective suspicion is not required. (Mangini v. Aerojet-General Corp. (1991) 230 Cal. App.3d 1125, 1150.)

Therefore, the day the defrauded party has “reasonable cause to suspect wrongdoing” is when the 3 year mark begins, regardless of whether he or she knew the “particulars” of the fraud claim. (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1374.) Also, “ignorance concerning the specific causes of action arising from the wrong” is not a defense. (Id.) Thus, “[r]ather than examining whether the plaintiffs suspect facts supporting each specific legal element of a particular cause of action, [Courts] look to whether the plaintiffs have reason to at least suspect that a type of wrongdoing has injured them.” (Cypress Semiconductor Corp. v. Superior Court (2008) 163 Cal.App.4th 575, 586.) Wrong and wrongdoing in this context are understood in their lay and not legal senses. (Id.)

For example, in Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, the California Supreme Court held that plaintiff’s fraud claim was timed barred, even though she filed suit soon after she “discovered” facts establishing that her former husband had concealed the true worth of his assets during dissolution negotiations. (Id.) When the plaintiff was signing the dissolution agreement, the plaintiff and her attorney had doubts as to the actual value of her husband’s stock. (Id. at p. 875.) More than three years after plaintiff’s doubts, when the stock was sold for an amount well beyond that stated during the dissolution discussions, plaintiff asserted a claim for fraud, claiming delayed discovery. (Id. at pp. 871-872.) The Court held that plaintiff’s early suspicion and doubt put her on inquiry notice of the potential wrongdoing, thus beginning the statue of limitations and barring the action. (Id. at p. 875.)

What is more, in Norgart v. Upjohn Co. (1999) 87 Cal.Rptr.2d 453, 461-462 the California Supreme Court explained the rationale of the statute of limitations as follows:

[The statute of limitation] has as a purpose to protect defendants from the stale claims of dilatory plaintiffs. It has as a related purpose to stimulate plaintiffs to assert fresh claims against defendants in a diligent fashion. Inasmuch as it “necessarily fix[es]” a “definite period[] of time”, it operates conclusively across the board, and not flexibly on a case-by-case basis. That is to say, a cause of action brought by a plaintiff within the limitations period applicable thereto is not barred, even if, in fact, the former is stale and the latter dilatory; contrariwise, a cause of action brought by a plaintiff outside such period is barred, even if, in fact, the former is fresh and the latter diligent. The statute of limitations operates in an action as an affirmative defense. Most often, the affirmative defense based on the statute of limitations has been approved by courts as “favored”. That is because, in accord with “public policy”, it “promote[s] repose by giving security and stability to human affairs.” (Norgart v. Upjohn Co., supra, 87 Cal.Rptr.2d at pp. 461-462 [internal citations omitted].)

At Kashfian & Kashfian, LLP, we have experience defending and asserting fraud claims, and as your counselor, we will fight vigorously on your behalf. Contact our offices to learn more about the services that we provide.

Please note that Kashfian & Kashfian, LLP makes available the information on this website for general informational purposes only. Internet subscribers and online readers should not rely nor construe the information on this website as legal advice or as a substitute for obtaining legal advice from an attorney licensed in your state.

In the case of defenses, we concluded, a sua sponte instructional duty arises “only if it appears that the defendant is relying on such a defense, or if there is substantial evidence supportive of such a defense and the defense is not inconsistent with the defendant’s theory of the case.”  (Breverman, 19 Cal.4th, at 157.)

However, even if a defense is inconsistent with the defendant’s theory, the court’s obligation to ensure that the jury determines every material issue is not complete. (Id.) The Breverman court further stated that:

[W]hen the trial court believes “there is substantial evidence that would support a defense inconsistent with that advanced by a defendant, the court should ascertain from the defendant whether he wishes instructions on the alternative theory.” (Breverman, 19 Cal.4th, at 157.)

Under the self-defense doctrine, a person “is privileged to resist [an assault or a battery] with such force as is reasonable under the circumstances.” (People v. Myers, 61 Cal.App.4th 328, 335 (1998); Penal Code §693.) Self-defense also excuses a charge of exhibiting a deadly weapon. (Penal Code §417(a)(1) ["except in self-defense"].) Moreover, substantial evidence, to support self-defense, “is defined as evidence, which is sufficient to deserve consideration by the jury, i.e., evidence from which a jury composed of reasonable men could have concluded that” the underlying facts of self-defense exist. (People v. Lemus, 203 Cal.App.3d 470, 477 (1988).)

An example of a trial court erring by failing to instruct on self-defense, sua sponte, is found in Elize, 71 Cal.App.4th 605. There, the appellate court found that a defendant’s testimony is sufficient to support self-defense, even if the defendant affirmatively testified that the criminal act was accidental and not in self-defense. (Id., at 610.) More specifically, the defendant, an armed security guard, was charged with assault with a deadly weapon after his gun was discharged in a brawl between him and two women. (Id. at 607-608.) At trial, one of the women testified that the defendant “shot at the [other] woman”, which was the basis for the assault with a deadly weapon charge. (Id. at 609.)

However, the defendant denied those allegations. (Id.) The defendant testified: that the other woman was beating him with a pipe; and that, when she lost control of the pipe, she “grabbed [his] handgun from its holster”. (Id.) The defendant then attempted to point the gun upward, but it fired. (Id.) The trial court did not give an instruction on self-defense, because the “defendant had testified that the firing was accidental and had not testified that it was an effort at self-defense.” (Id., at 610.) The appellate court reversed finding defendant’s testimony was substantial evidence. (Id., at 615-616.) The appellate court reasoned:

A jury could disbelieve defendant’s testimony that the gun fired accidentally during this struggle. A jury could find that defendant fired the gun intentionally, hoping to end the attack upon him either by hitting one of his assailants or by firing into the air to scare off his attackers. (Elize, 71 Cal.App.4th, at p. 610.)

At Kashfian & Kashfian, LLP, we have experience appealing wrongful convictions where the trial court failed to instruct on self-defense, and as your counselor, we will fight vigorously to obtain a reversal in your case. Contact our offices to learn more about the services that we provide.

Please note that Kashfian & Kashfian, LLP makes available the information on this website for general informational purposes only. Internet subscribers and online readers should not rely nor construe the information on this website as legal advice or as a substitute for obtaining legal advice from an attorney licensed in your state.

If the incident report is damaging, the litigator can expect the company to put up fierce resistance. One tactic used by many defense attorneys is to claim that the document falls under the attorney client privilege, as it was produced in anticipation of litigation. If this happens, one will have to ask the court in which the matter is being litigated to issue an order compelling the defendant to disclose the incident report. A lawyer well informed about the law can probably show various fallacies in the defendant’s argument of privilege and obtain the discovery order.

The landmark case of D.I. Chadbourne, Inc. v. Superior Court (1964) 60 Cal.2d 723 (Chadbourne) details 11 basic principles to be applied in determining whether the attorney- client privilege exists in a corporate setting. (Id. at pp. 736-738.) For our purposes, where a corporate employer requires that its employees make a report, the privilege of that report is determined by the employer’s purpose in requiring the report. (Id. at p. 737.) Moreover, when the corporate employer has more than one purpose in requiring the report, the dominant purpose will control. (Ibid.) To prove privilege, the dominant purpose must be transmitting the report to the employer’s attorney. (Ibid.)

Because the test hinges on the dominate purpose of the document, it is crucial to obtain from the defendant the policy behind the making of the incident report. What one will often find in the policy is that the purpose is not litigation but actually accident prevention. Further, if the company has a policy of creating an incident report after every accident, one could argue that anticipating litigation after every accident is not reasonable. Minor accidents happen all the time, and there is no ligation. So if the policy is to generate an incident report after every accident, then that disproves the assertion that the dominate purpose is anticipation of ligation. Other arguments more particular to the circumstances can be crafted, and an attorney well versed in the law will be able to compel the incident report in most circumstances.

At Kashfian & Kashfian, LLP, we have experience in compelling incident reports, and as your counselor, we will fight vigorously to obtain an incident report in your case. Contact our offices to learn more about the services that we provide.

Please note that Kashfian & Kashfian, LLP makes available the information on this website for general informational purposes only. Internet subscribers and online readers should not rely nor construe the information on this website as legal advice or as a substitute for obtaining legal advice from an attorney licensed in your state.

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Court Documents and Videos in Press

Filing: Objection to the Petition For Order to Vacate and Deliver Possession and Control of Real Property by the Executors of the Estate of Michael J. Jackson and Request to Abate Petition (Probate Code §850(A)(2))

Video: “Standoff Continues at Michael Jackson House“

Filing: Notice of Intent to Voluntarily Withdraw from Immediate Possession of the Residence and Reservation of Rights; Declaration Of Respondents’ Attorney Robert A. Kashfian

Documents & Videos from www.TMZ.com and www.RADARONLINE.com