Hiring a court reporter is expensive. Do you really need a court reporter for every occasion, such as a hearing where no testimony will be offered?
Before you answer, consider the perspectives of the appellate justices who disagreed sharply on the question in Weischadle v. Vo (D2d1 Jul. 2, 2021) 2021 WL 2766771 (no. B304845) (nonpub. opn.). The majority held the lack of a reporter's transcript at a hearing on a motion to compel arbitration was not fatal. But Justice Chaney penned a forceful dissent. The majority opinion is logical and seems to reach the right result. But Justice Chaney raises important questions whether the majority evaded important procedural safeguards to reach its result.
Given the outcome was a close call, as a practical matter it would be wise to assume a reporter's transcript is necessary for any important law-and-motion hearing, even if testimony will not be offered.
Here is what happened in Weischadle.
The plaintiff was a former personal injury client of the defendant law firm. The defendant law firm had withdrawn before the trial, leaving the plaintiff in pro per at trial, where she got nonsuited. The plaintiff sued the defendant law firm for legal malpractice. The law firm moved to compel arbitration based on the arbitration clause in the retainer agreement.
The court heard the motion at a January 2020 hearing – which was not reported. Although the plaintiff’s opposition to the motion to compel arbitration did not raise the issue of unconscionability, the trial court requested supplemental briefing on that issue, noting the retainer called for “commercial” arbitration as opposed to “consumer.” Importantly, the court ordered that no declarations or exhibits were to be included with the supplemental briefing.
Following a continued hearing in February (which was reported), the trial court ruled the arbitration agreement was procedurally and substantively unconscionable because of the “commercial” arbitration provision. The court reasoned that this would impose unreasonable costs on the plaintiff, and that it was not disclosed to the plaintiff, who was in an inferior bargaining position. (Notably, none of these findings was supported by the evidence submitted in connection with the motion or opposition.)
The trial court also found the defendant law firm had waived arbitration by seeking an extension under Code of Civil Procedure section 430.41 to file a demurrer. (But this part of the ruling was clearly incorrect, as the Court of Appeal would hold: filing a demurrer itself does not waive arbitration (Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 662), so obviously the preliminary step of obtaining an extension to file a demurrer cannot constitute waiver, either.)
So just to keep score, by this point in the opinion – even before getting to the analysis – there already are several reasons to be suspicious of the trial court’s ruling here. First, the trial court raised an issue, unconscionability, that the plaintiff had not raised (and thus arguably had waived). Second, the unconscionability issue is a fact-driven issue, yet the trial court provided no opportunity to either party to adduce evidence on it. Third, the trial court went ahead and made those fact findings in the absence of evidence. And fourth, the trial court also ruled on a separate ground that was clearly incorrect. This reader was left with the distinct impression that, so long as this judge had anything to do with it, this case simply was not going to be arbitrated.
So the fact that the Court of Appeal reversed was not surprising, even though the order denying arbitration was reviewed under the deferential substantial-evidence standard. Writing the majority opinion, Justice Helen Bendix noted “there was virtually no evidence to support” the trial court’s findings, because the plaintiff – whose burden it was to prove unconscionability – “submitted no evidence regarding the circumstances in which she entered into the retainer agreement.” Certainly there was no evidence in the papers submitted to the trial court. And there was no indication any evidence was offered at the two hearings. Instead, all of the findings about the circumstances under which the plaintiff signed the retainer were based solely on the retainer itself. That was not substantial evidence, the majority held.
The Lack of the Reporter's Transcript Was Not Fatal to Appellant’s Case:
But what about the missing reporter's transcript from the first hearing in January? The trial court raised the unconscionability issue at that hearing, so surely that must have been an important hearing. Justice Bendix did acknowledge the lack of a transcript for that hearing. But the missing reporter's transcript was not fatal to the law firm-appellant’s case, because the minute order relating to that hearing "did not refer to any testimony or submission of evidence,” so “[w]e may infer from the minute order that no such testimony or evidence was received.” (See Copley Press, Inc. v. Superior Court (1992) 6 Cal.App.4th 106, 113 [official court minutes “accurately and officially reflect the work of the court”].) Moreover, in the reporter's transcript from the second hearing at which the court made its ruling, and in the five-page ruling itself, the trial court “never referred to any evidence other than the retainer agreement itself,” and the declaration the law firm submitted before the unconscionability issue ever arose.
The majority concluded: “In short, every indication in the record is that nothing occurred at the January 14 hearing to support the trial court's ruling. The record therefore is not “ ‘ “ ‘silent' ”' ” as to what transpired at the hearing, even in the absence of a transcript, and we need not make “ ‘ “ ‘[a]ll intendments and presumptions' ”' ” in favor of the trial court's ruling.” (Quoting People v. Torres (2020) 47 Cal.App.5th 984, 989.)
(You may be interested to know that Justice Bendix’s majority opinion was joined by a trial court judge sitting by assignment.)
Again, this struck me as the right result. But now consider what Justice Chaney said in dissent.
The Lack of the Reporter's Transcript Should Be Fatal, Says Justice Chaney in Dissent:
Justice Chaney makes a strong case why a reporter's transcript is necessary in most appeals.
First, the California Rules of Court require a record of oral proceedings where an appeal involves a review of those proceedings. (Cal. Rules of Ct., rule 8.120(b).) True, a reporter's transcript “may not be necessary if the appeal involves legal issues requiring de novo review.” (Southern California Gas Co. v. Flannery (2016) 5 Cal.App.5th 476, 483.) But: “In many cases involving the substantial evidence or abuse of discretion standard of review, however, a reporter's transcript or an agreed or settled statement of the proceedings will be indispens[a]ble.” (Id.) (But note the term “many cases” – not “all.”)
Why is a record so important? That gets to Justice Chaney’s second point: “The necessity for a record of oral proceedings rests on the bedrock principle that the trial court's orders are presumed to be correct – the “Presumption of Correctness.” (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2020) ¶ 8:17.) .... This includes the presumption ‘that the record contains evidence to support every finding of fact.' [¶] Appellate courts never speculate that trial court error occurred. Any ambiguity in the record is resolved in favor of the appealed judgment or order.” (Id. at ¶¶ 8:15, 8:16, original italics.)”
“ ‘A necessary corollary to this rule [is] that a record is inadequate, and appellant defaults, if the appellant predicates error only on the part of the record he provides the trial court, but ignores or does not present to the appellate court portions of the proceedings below which may provide grounds upon which the decision of the trial court could be affirmed.' ” (Osgood v. Landon (2005) 127 Cal.App.4th 425, 435, italics added.)
Justice Chaney is on to something here. Simply put, appellate courts always assume the record supports the judgment, so the appellant must prove otherwise. And ordinarily, that starts with offering the appellate court the entire record. If the appellant omits portions of the record, the court may presume those omitted portions support the judgment, and will affirm.
That is exactly what Justice Chaney says ought to have happened here: “We cannot know what happened at the hearing on January 14, 2020. Consequently, we must presume that something happened that would justify the trial court's denial of the motion to compel arbitration.”
Justice Chaney’s italics here now prompt the reader to ask: ok, what sort of “something” might one reasonably presume to have happened to support the otherwise unsupportable findings. Because surely this can be taken to extremes. One does not presume Justice Chaney means that we should presume that “something happens” at any given unreported case management conference, for instance, that may be said to support the eventual judgment. And no one contends here that anyone was sworn in to testify at the unreported January hearing. So why does Justice Chaney presume “something happened” that would fill the evidentiary holes in the trial court’s factual findings?
Here is Justice Chaney’s answer: “Litigants frequently concede points in response to bench officers' questions or make representations or assertions of fact upon which trial courts must be allowed to rely.”
That is all. Justice Chaney does not presume there was an impromptu swearing in of witnesses, or surprise evidence offered to the court. No, Justice Chaney is only talking about oral advocacy about “representations or assertions of fact” in the case. It is worth pausing a moment to ask ourselves how far Justice Chaney’s point goes. On the one hand, attorneys are aware that "It is axiomatic that the unsworn statements of counsel are not evidence. [Citations.]" (In re Zeth S. (2003) 31 Cal.4th 396, 413, fn. 11.) So Justice Chaney must not be suggesting that statements made during oral argument may be relied upon as ordinary evidence. But on the other hand, advocates may make judicial admissions during oral argument. For example, during closing arguments in a trial over a contractor dispute in Fassberg Const. Co. v. Housing Auth. of City of Los Angeles (2007) 151 Cal.App.4th 267, the defense counsel unambiguously and deliberately conceded one of the issues raised at trial concerning a $402,000 credit on a change order. That was treated as a judicial admission.
But judicial admissions are special creatures. (Tim Kowal, A Defense Lawyer’s Complaint: Some Judges Don’t Get It About Judicial Admissions, Verdict, 2018 vol. 2.) Judicial admissions are not evidence. A judicial admission is “a conclusive concession of the truth of a matter which has the effect of removing it from the issues …. " (Troche v. Daley (1990) 217 Cal.App.3d 403, 409, quoting Walker v. Dorn (1966) 240 Cal.App.2d 118, 120.) A trial court "may not ignore a judicial admission in a pleading, but must conclusively deem it true as against the pleader." (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 187 (citing Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1155).)
So if Justice Chaney is talking about judicial admissions made by counsel during the hearing, and if judicial admissions “remov[e the matter] from the issues,” then it seems reasonable to ask: wouldn’t the trial court have reflected such an important occasion in the minutes? As Justice Bendix noted in the majority opinion, the official court minutes “accurately and officially reflect the work of the court." (Copley Press, Inc. v. Superior Court (1992) 6 Cal.App.4th 106, 113.) If the trial court accepts a judicial admission from a litigant, it seems fair to presume the trial court would reflect such a significant event in the minutes. And contrariwise, if the minutes do not reflect that significant event, it seems fair to conclude that it did not happen.
But Justice Chaney has a parting shot that may be her most persuasive: “Finally, procedural rules applied consistently are part of the foundation of due process. The rules that govern our review – like other rules of procedure, standards of review, and presumptions parties are entitled to – are intended in part to give litigants equal access to the judicial process. Courts tip the scales when they decline to consistently apply those procedural prescriptions.” This is an important point. Subtlety is an tax levied on the legitimacy of the judiciary. The rule of law requires that like things be treated alike. But experience may counsel that, in fact, the world is infinitely subtle, and no two things are truly alike. But that empirical reality is not one in which the judiciary may indulge. Our rules are no longer fixed and intelligible we oblige them each to permit of a thousand exceptions.
So Justice Chaney would leave well enough alone: the rules of appellate procedure demand that appellants to provide a record of the key hearings, the appellant failed to do that here, so the appellant must lose.
Comment: I am torn between Justice Bendix’s opinion, which seems clearly the right result for this case, and Justice Chaney’s dissent, which would prevent standard appellate procedure from starting down the road to becoming a dog’s breakfast of exceptions. But if forced to choose. I would join Justice Bendix’s opinion, while offering a concurrence along these lines:
“While it is important that litigants provide a complete record on appeal, the legislature and the judiciary have been too cavalier about how difficult we make this for litigants. Unlike federal courts where the record is deemed to include the entire trial court file, in appeals in our state the record is limited to what the appellant provides to the reviewing court. Also unlike federal courts, many California courts no longer provide court reporters, so in addition to the expense, litigants must directly arrange for the preparation of a record. And our rules offer appellants no real alternative. True, we often note that, in the alternative to a reporter’s transcript, litigants may opt for an agreed statement or a settled statement. But let’s not be glib. A litigant does not have a right to an agreed statement, because opposing counsel may simply decline to agree. Nor does a litigant have a right to a settled statement, because the trial court, also, may simply decline to settle one. (I am aware of no reviewing court to hold a trial court abused its discretion in failing to settle a statement; and I am aware of one reviewing court to summarily deny a writ petition raising the issue.) The legislature previously allowed courts to record proceedings that could later be made into transcripts. In short, there are measures available to make record preparation less cumbersome and less expensive to litigants. For whatever reason, our state has chosen not to adopt those measures. Given we have already rather stacked the deck against appellants in terms of the appellate record, I would not heap further hardship upon the appellant in this case by presuming things happened at an unreported hearing that no one actually suggests happened anyway.”
Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at firstname.lastname@example.org or (714) 641-1232.
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