FRIDAY, NOVEMBER 3, 1995 MORNING SESSION THE CLERK; Line 6, Adam Spence versus Sony Music. MR. MISKEL: Good morning, Your Honor. Glendon Miskel appearing for Plaintiffs. MR. KRISTENSEN: Daniel Kristensen on behalf of Matthew Katz. MR. HEYE; Tom Heye on behalf of Matthew Katz also, Your Honor. Your Honor, if I could address the tentative ruling of the Court. The last time we were before the Court, we did not have the case of Mills against Kopp. And that's basically what we are resubmitting this on. Because it's very much a case on point. The point of this, this summary judgment, is the issue of whether a person is competent mentally to contract, is a question that has to be determined by the Court based upon the facts. And in the Mills case' there was a psychiatrist who said clearly the person was not competent at all to contract. And the Court listened to the testimony of the attorney who was representing the person. In this particular case, we have submitted to the Court the excerpt of Nick Clainos' deposition, in which he does state that he did talk to Mr. Spence and Mr. Spence, in his opinion, was competent at that time. He was in a convalescent home at the time in the Santa Cruz area, I think it was. The second thing is that the question of the incompetence of one person who was not a party, by the way, at that time to the lawsuit, is not a basis for setting aside the agreement as to the people who were parties to-the lawsuit. Namely, the other three parties, other than Mosley and Spence. And finally, as the case of Mills against Kopp points out, that if you want to set aside a contract, the party wishing to set it aside must tender back the consideration that they got. And in this particular case, they got $48,000 from CBS Records, and if they want to set this aside on the basis of the incompetence of one of the five individuals -- THE COURT: Actually, it's the incompetence of two people, we are talking about, I thought. MR. MISKEL: That's correct, Your Honor. THE COURT: Not just one. And it wasn't simply the incompetence of Spence that was critical to the resolution of this issue. The fact of the matter was, was as you point out; Spence might not have been a party to the action at that point in time. But he becomes a party to the action by the representations of Clainos, and Clainos was not his attorney. And it's a different proposition to say that he was incompetent -- pardon me, insane or psychotic. I agree with Mills, obviously, by virtue of what I have said before. It's not for me to disagree with the Court of Appeal. And it's a different proposition to say because someone is psychotic, they can and cannot be competent to sign contracts. The problem is we really don't even have a contract here, because there's nobody who competently represents Mr. Spence. Mr. Clainos was not his attorney. There is no guardian ad litem appointed, ever appointed for Mr. Spence. And we have a person who is psychotic, and maybe not able to take care of his own affairs. And what the psychiatrist tells us about Mr. Spence is very simple. The psychiatrist says that when he is medicated and hospitalized, he may carry on conversations and appear to be competent. That doesn't make him competent. And so it was a combination of all of those things. it was really the fact that Mr. Clainos was not his attorney, as I understood the circumstances, and you can correct me if I'm wrong on that point. And the further fact that there was no showing at all that anybody represented him, that he had a guardian ad litem or other counsel who was competent to come into court and make a representation about settlement on his behalf. And I think we have somewhat the same kind of situation with Mr. Mosley. But maybe it's a closer question. MR. HEYE: But the deposition of Mr. Clainos, in the excerpted testimony, says, and Mr. Clainos says he was introduced, he introduced me, meaning Mr. Rubinson, introduced me as a person he would recommend to be their lawyer to take care of this matter in San Francisco. And then Mr. Miskel asked, "Do you recall whether or not you had a written-fee agreement with those band members before you commenced your representation of them"? "Answer. I don't recall, but it is my general recollection that I didn't have an agreement like that with any clients, so it's likely that I did not." And later he says, "Do you recall whether at this point in time, July 23rd, 1973, you were representing all five members of the Moby Grape or whether you were representing certain individuals within the band"? "Answer. My recollection would be that I was." THE COURT: Was what? MR. HEYE: Well, he was. The question is were you representing these five band members. THE COURT: Or MR. HEYE: Or the individuals. And he says "My recollection is that I was." THE COURT: So you tell me what that means. it means he was either representing the band, or some of the individuals. That's a totally ambiguous response. MR. HEYE: My recollection -- THE COURT: It's a bad question. It's the kind of question is I used to ask, which is why I stopped being a lawyer. MR. HEYE: But he goes on in that same response to say, "My recollection would have been that, yes, I was representing all the band members." That's Mr. Clainos' deposition. THE COURT: Okay. Let me see that again. A moment of levity is always MR. HEYE: helpful. THE COURT: His answer is all over the place, isn't it? I mean qontextually, I'm not sure that the answer means much of anything. "My recollection would have been," meaning in the past. "My recollection would have been"? I mean if we really take the plain meaning of the language, it means that I have no present recollection, but if I had a recollection in the past, it probably would have been that, yes, I was representing all the band members. That's almost no answer at all. I suppose if we extrapolate that, or telescope it into the future and into the present, then we would say that what he's really trying to say, and rather inarticulately, is t@at my best guess is, guess is, that I was under the impression that I was representing all the band members. MR. HEYE: If he wasn't representing them, why would he have made the trip down to see Mr. Spence? It doesn't make any sense, for him to be driving down to see Mr. Spence specifically as an attorney if he wasn't representing Mr. Spence. MR. MISKEL: Your Honor, I think there is some serious problems of credibility, for obvious reasons, with Mr. Clainos' testimony. He also testified -- THE COURT: There is also a conflict between Mr. Clainos and the band members, but that's a different proposition. MR. MISKEL: That's true, Your Honor. But at the time he said that he had a conversation with Mr. Spence and that Mr. Spence was articulate, the medical records reflect that he was talking about people growing out of his neck; that he was having conversations with historic figures. And it's clear from the expert opinion of the doctor that's reviewed all of his records back into the sixties, that he was, at that time, and was prior to that time, psychotic. And that he has been consistently psychotic since the sixties. And that the cause of that psychosis is organic. It's the not the passing kind of schizophrenia that comes and goes. He is and was organically psychotic. It's significant, Your Honor, that no evidence either in the form of medical records, or evidence in the form of a contrary expert psychiatric opinion was placed before the Court in its consideration of the motion. Similarly, with respect to this motion to reconsider, no new evidence of any sort has been submitted. This is a pure rehash of what was discussed earlier. THE COURT: This is almost like a renewal motion. And I view it very kindly because what counsel is saying, you know, one of the problems with being in civil law and motion is that we really do rely in this department, unlike perhaps in criminal departments where judges really do develop expertise, on the lawyers' to supply all of the pertinent law. Which means if you don't, give us the law, sometimes we do find it on our own, but the very strong likelihood is that we will not find it and we do try to do what is ultimately right. So sometimes it is a little bit, shall I Bay, okay, to ignore the techni6al requirements of Code of Civil Procedure Section 1008, to get to what is the heart of the issue to rule appropriately. At least to have counsel have their best opportunity to prevail upon the Court to rule correctly. So while I don't encourage thi s, you know, I also can't say that as a matter of policy one should not say, "Okay, we made a mistake before.11 The fact that you haven't brought up new grounds under 1008, doesn't mean thkt we won't necessarily reconsider. Because there are, there still is a policy in the law for the court to try to do what's right. MR. MISKEL: I r espect that flexibility, Your Honor. Just my concern is that I also did not get a reply brief to my opposition. So some of this I am hearing for the first time here in front of you. I also would like to state, Your Honor, that with regard to this case of Mills v. Kopp which they are relying .upon, the argument was that the Plaintiffs in this case received the consideration of that approximately $50,000 in money, and that that is what places the Plaintiffs' circumstances within the scope of Mills v. Kopp. That's not correct, Your Honor., You may recall that what occurred in this case is that third parties, the people that Clainos was actually representing, took those royalty funds. They never were paid out to the Plaintiffs. And we have submitted evidence in our Motion to Set Aside in support of that contention. Additionally, the ruling in Mills v. Kopp, as I argued in my opposition, is a very narrow ruling that applies in specific circumstances where a person is asserting their lack of mental capacity as an excuse or defense to their having to restore the consideration that they got. I agree with the ruling in Mills v. Kopp. I think any other result would have been unfair. There was no determination that the woman in that case was mentally incapacitated. At least no strong evidence. And I think that to rule otherwise in that case would have been unreasonable and unfair. But the circumstances here, Your Honor, are very different. We have a party who clearly was grossly psychotic and mentally incapacitated. And we have submitted the expert testimony in support of that fact. THE COURT: Gentlemen, I will take it under submission. I will take a look at it again. Okay. MR. HEYE: Thank you, Your Honor. THE COURT: Do you have a proposed order, Counsel? MR. MISKEL: Yes, I do. THE COURT: Thank you, very much. SF SUPERIOR - Department 10 - Law & Motion