Court of Appeal Affirms New Trial Victory, Turning $500K Liability into $300K Recovery for RRB Client

 

Recent Client Win

In a long-running partnership dispute, RRB’s client faced allegations of improperly diverting distributions to satisfy a pre-existing debt owed by the plaintiffs. Initially, the trial court ruled in favor of the plaintiffs, ordering RRB’s client to pay over $500,000 in principal, interest, and attorney’s fees. However, on retrial, RRB successfully demonstrated that the client was entitled to interest on the pre-existing debt, revealing that, when properly accounted for, the plaintiffs were actually the ones who still owed money.

 

The plaintiffs appealed, but the Court of Appeal affirmed the ruling in favor of RRB’s client, finding that:

 

– The amount owed by the plaintiffs was certain or capable of being made certain based on information known to all parties, creating a clear entitlement to interest.

 

– The plaintiffs were not entitled to offset distributions against the total amount of the pre-existing debt.

 

This appellate victory completely reversed the financial outcome for RRB’s client, transforming what had initially been a significant liability into a $300,000 recovery.

 

 

Reuben Raucher & Blum’s Stephanie Blum Profiled in Living Brentwood

We are proud to share that Stephanie Blum, Chair of the Family Law Department at Reuben Raucher & Blum, is featured in the February 2025 issue of Living Brentwood magazine.

 

This thoughtful profile highlights Stephanie’s exceptional career and her dedication to achieving meaningful, life-changing results for her clients. Whether through strategic mediation or vigorous courtroom advocacy, Stephanie blends empathy, creativity, and expertise to deliver solutions that not only resolve immediate issues but also set families on the path to long-term success.

 

With over 25 years of experience in family law, Stephanie has earned recognition for her ability to navigate even the most complex cases, leveraging the unique full-service capabilities of RRB to protect her clients’ interests at every turn.

 

We invite you to explore Stephanie’s story in Living Brentwood and learn more about her work and the distinct advantages of working with Reuben Raucher & Blum.

Vindicating a Nonprofit in High-Stakes FEHA Race Discrimination Case

 

Recent Client Win

Reuben Raucher & Blum successfully defended a nonprofit foundation providing low-income housing to the elderly in a high-stakes employment dispute brought by a terminated Chief Operating Officer. The COO, who alleged racial discrimination as the reason for his dismissal, filed multiple claims under the Fair Employment and Housing Act (FEHA).

 

Given the sensitive nature of the allegations and the COO’s prominent role within the organization, the case presented significant reputational and legal risks for the client. Recognizing the advantages of arbitration for employers, RRB successfully obtained a court order compelling the matter to arbitration under the American Arbitration Association (AAA), despite the plaintiff’s initial filing in superior court.

 

In arbitration, RRB secured summary adjudication on the key claim of race discrimination, effectively establishing that the client’s termination decision was not racially motivated. This decisive finding absolved the foundation of the stain of a racism allegation, significantly reducing potential exposure and mitigating reputational harm. Following this critical victory, the remaining issues were resolved through a favorable settlement, bringing the matter to a successful conclusion.

AB 2505: New Pro Bono Reporting Requirements

Stephen L. Raucher

Though the State Bar of California encourages lawyers to provide at least 50 hours of pro bono services per year, until now there has been no formal mechanism to measure the percentage of attorneys meeting this goal. Assembly Bill 2505, signed into law by Gov. Newsom on Sept. 27, 2024, will add sections 6073.1 and 6073.2 to the Business and Professions Code, requiring attorneys with active licenses to annually report the number of pro bono hours they complete each year. Under this new requirement, the State Bar must collect and maintain the reported data for at least five years, though the information will not be subject to public disclosure. Instead, the State Bar will be authorized to publish aggregated and anonymized reports based on the information provided.

Attorneys will report through the State Bar’s website at the same time that they pay their annual membership dues. However, some attorneys will be exempt from the reporting requirement. AB 2505 includes exceptions for licensees employed by an organization primarily engaged in the provision of pro bono services, legal aid organizations, and nonprofit benefit corporations, as well as for full-time employees, officers, or elected officials of the State of California, a political subdivision thereof, or the federal government. Licensees whose employers prohibit them from performing pro bono services will also be exempt. Additionally, the State Bar may permit licensees to decline to answer or to indicate that they do not track their pro bono hours.

One important aspect of AB 2505 is its definition of “pro bono services,” which appears narrower than the broader framework set forth under Business and Professions Code Section 6073, providing that “Every lawyer authorized and privileged to practice law in California is expected to make a contribution.”  Under the new law, pro bono services are defined as providing or enabling the direct delivery of legal services without expectation of compensation to the following:

– An indigent person;

– A charitable, religious, civic, community, governmental, or educational organization in matters that are designed primarily to address the needs of persons of limited means; or

– A charitable, religious, civic, community, governmental or educational organization in matters in furtherance of its organizational purposes.

This definition raises questions about whether certain public service activities, currently recognized as pro bono under Section 6073, will still count for the new reporting requirement. For instance, certain volunteer work with one’s local bar association may not be considered pro bono under the narrow definition of AB 2505, unless that work is tied to the organization’s charitable arm. Furthermore, while Section 6073 allows for pro bono services to be measured collectively, the new reporting requirement does not appear to provide a means of capturing firm-level pro bono activities or legal contributions.

Although the new law does not mandate attorneys to complete any pro bono hours, nor is there any penalty associated with failing to complete pro bono hours or the reporting requirement, supporters of AB 2505 hope that the reporting requirement will help increase access to legal aid for low-income Californians by motivating attorneys to complete their pro bono commitment. At the very least, the reporting requirement will provide new insight into how many pro bono hours California attorneys are actually completing.

(This article appeared in the January 3, 2025 issue of the Daily Journal’s New California Laws 2025)

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