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The Use Of Judicial Estoppel In California

The underlying facts of this case are that the Plaintiff, a 20 year old male, was in the process of being transported by ambulance from Imperial County to a facility in San Diego County for psychiatric evaluation under a 5150 hold. As the ambulance approached the CHP checkpoint, the Plaintiff escaped from his lap belt and his leg belt and exited the ambulance by jumping out of the moving vehicle while it was traveling at freeway speed. The medical evidence indicated that Plaintiff suffered a profound traumatic brain injury as the result. During Plaintiff’s emergency medical care a decompressive craniectomy was performed in which a large area of Plaintiff’s skull was removed to increase the volume of the cranial capacity to facilitate a reduction in intercranial pressure. The portion of Plaintiff’s skull that was cut away was then “stored” in Plaintiff’s abdomen.

During the first trial in the case the jury began deliberations on a Friday, and the following Monday, the jury advised the Court that they had reached a verdict. Prior to the reading of the verdict Plaintiff’s counsel became concerned that the quick return of the jury reflected a defense verdict. Plaintiff’s counsel then approached the Defendants’ counsel to negotiate a “settlement.” Plaintiff’s counsel, Plaintiff, Plaintiff’s mother, and Plaintiff’s additional associated counsel along with Defendants’ counsel exited the courtroom to discuss settlement.

The Defendants’ initial offer to settle was $200,000 to which Plaintiff’s counsel responded with information regarding a lien in excess of $400,000 and that “he had to get something to net for his client.” Defendants’ counsel countered with their final offer of $350,000. Plaintiff’s counsel walked over to his client and they returned to Defendants’ counsel outside the courtroom to confirm that Plaintiff had accepted the settlement offer of $350,000.

Plaintiff’s and Defendants’ counsel returned to the courtroom and participated in a sidebar conference with the Judge wherein Plaintiff’s counsel informed the court that the case had settled for $350,000. The parties advised the Judge they wanted to place the settlement on the record. The Judge then dismissed the jury and informed the jurors they were free to remain in the hallway outside the courtroom to talk to the attorneys when they came out. Prior to actually placing the settlement on the record Plaintiff’s counsel walked out of the courtroom and learned that the jury was intending to award Plaintiff $9.4 million dollars.

Once the Plaintiff’s counsel learned the potential verdict of the jury, Plaintiff’s counsel became hysterical and began to run and shout into the courtroom. The Judge informed the parties that they would take a break so Plaintiff’s counsel could calm down. Once the court reconvened, Plaintiff’s counsel alleged that he did not have proper authority to settle the case and requested that the Court declare a mistrial. Defendants’ counsel argued that the case should be dismissed due to the granting of an enforceable settlement agreement. The court declared a mistrial.

Orange County Partners Keith Taylor and Gil Jones were asked to substitute in to the case and prepare for the re-trial of the case. A motion for leave to file a cross-complaint for (1) Breach of Oral Settlement Agreement; and (2) Judicial Estoppel regarding settlement was granted. Cross-motions for summary judgment were filed. Plaintiff’s motion for summary judgment was denied. Defendants’ motion for summary judgment was granted, which allowed for the dismissal of the case upon the tender of the $350,000 settlement.

Judicial estoppel applies when “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake. (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 183)

In Blix Street Records, Inc. v. Cassidy (2010) 191 Cal.App.4th 39, the parties told the court they had reached a settlement and, in reliance on that representation, the court discharged a jury that had begun hearing the case. (In Blix, the jury had heard opening statements, rather than the whole trial.) In Blix, the plaintiff then decided that it did not want to go forward with the settlement. In Blix, at a bench trial the court held, that “. . . even though the settlement agreement did not constitute an enforceable contract, was judicially estopped from denying the enforceability of the settlement agreement.” (Id. at 45-46.)

With the Blix case in mind, Defendants began to take the depositions of all parties involved, including Plaintiff’s main counsel. The only potential issue in a defense based on Blix was the possibility that the settlement was made by Plaintiff’s counsel as a result of “ignorance, fraud, or mistake.” However, Defendants were able to elicit testimony from Plaintiff’s main counsel to the effect that the settlement was not made as a result of ignorance, fraud, or mistake. Counsel proceeded to depose the rest of Plaintiff’s counsel and got similar testimony from them as well. Once that critical testimony was established, Defendants prepared a summary judgment motion based on the judicial estoppel theory and the Blix case.

Additionally, the issue of the underlying merits of the case was being litigated at the same time. It appeared that Plaintiff had suffered a major brain injury as a result of the incident and would need significant future life care. However, Defendants requested sub rosa surveillance of Plaintiff and during the surveillance discovered that he was not quite as limited as he represented. The surveillance discovered that he was able to drive a car on his own without any assistance, contrary to his deposition testimony, in which he asserted that he was blind in one eye and unable to drive. Additionally, it was also discovered that he was going out on regular basis and socializing with his friends including purported testimony that he was jumping off of a roof into a pool. Moreover, at this time, Plaintiff still had a piece of his skull missing and was supposed to be wearing a helmet everywhere. However, the surveillance showed his preference for only wearing a baseball hat when leaving the house. This evidence would be powerful if the case proceeded to trial on its merits.

Both Plaintiff and Defendants filed summary judgment motions based on the basic theory of a settlement. Defendants’ motion was based on judicial estoppel combined with the case directly on point, Blix. After hearing both of the summary judgment motions, the court ruled in favor of Defendants and declared that Plaintiff was judicial estopped from denying the settlement entered into at the time of trial. The court fully adopted Defendants’ position and ordered that the Defendants pay the settlement agreement of $350,000 dollars. This favorable ruling saved Defendants approximately $9.1 million dollars as the prior verdict on the case was set to be for $9.4 million dollars.

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