Dan

Welcome to Sound Business Insights. I’m Dan Watkin. Welcome to War Stories two. This podcast is not intended to provide legal advice.

Neil

So Dan, in the first portion of this conversation, we covered what I’m going to call the eighties, the, uh, early parts of your career and we got into the early nineties. The world has come a long way since then, but there’s still a lot that happened in the law in the eighties and nineties that affects how things are handled today and the experiences that you gain that make you a better attorney. So let’s pick up in the nineties. What are some of the other types of cases that you managed that really apply yet to this day?

Dan

A fun one would be the time I got to take the deposition of Tom Cruise.

Neil

Whoa,

Dan

<laugh>. Well, I was just one of the lawyers in the, he was a witness because he made a movie named Cocktail. Yes. And T G Fridays was the bar in the movie. So the plaintiff’s council decided they would put a bunch of pressure on t g Fridays and notice his deposition

Dan

And he said, sure, take it. I don’t have anything to tell you. They didn’t teach me anything like that. Script writers do it. So it was a waste of time. But that’s just an example of how aggressive the plaintiff’s lawyers were. In that case, they did 60 depositions in 60 days and there was a special judge, private judge, appointed to rule on objections at the depositions. That’s how hard they were fighting. And had they won <laugh>, every hour they spent would be subject to an attorney’s fees claim in their favor. So the stakes were really high and they were going all in and they were doing press Releases.

Neil

And we’ll come back to that where we are in a moment, if you’ll put a pin in that. But that still applies to this day. And it ties to a really important point, which is if you’re in the sauce, if you’re an employer, if you’re a business owner, the faster they get ahold of you, the sooner you can act. And really the one thing we’re battling yet to this day is attorney’s fees. Is it not?

Dan

That is true. That’s true. And that is one of our main rules for our clients is if something like this happens, let us know right away because how you handle your investigations, how you handle your research counts tenfold down the line. And since we’ve done it for 35 years, we are going to be able to tell you immediately what to do. We’re not going to say, oh, let me do a memo. We’re going to say, okay, do this, this, and this. Take these actions right away and that should be our initial consultation. We’ll tell you that we know, we, we know what to tell you to do to really get your case going in the right direction

Neil

and to prevent an accumulation of fees.

Dan

Yeah, well if, if you can. Yeah. I mean you’ve got to manage the risk.

Neil
Absolutely. So Chris calls you and says, you know, I’m coming back, you’re going to be my boss. You hook back up and you start going back at it. What were some of the memorable cases that hit in that timeframe?

Dan

In that timeframe? Well first, let’s go back to one. I forgot when I was with Chris the first time. Sure. I had a client driving a BMW heat or core brakes, hot water on her ankle. She got a burnt ankle go to file a claim against BMW product liability. They are not going to pay. They’ve got a lawyer here in town. I knew the law firm, very good law firm. They weren’t going to pay. And so we have to go pursue the case and sue them. So I sent out subpoenas to every motor magazine and expert in auto repair that I could come up with to try to find information if this was an ongoing problem with the car or if it just a one off. And I got nothing back until I got a letter from Ralph Nader. Oh wow. Consumer protection guy. Absolutely. And he says, I want to know what about your case. And uh, we start sharing information. Before you know it, he lets us know that he’s got an investigation into this heat accord that failed and then he wants to go on a public campaign. And he asked if me and my client would go on the Good Morning America Show. And we did. And we found more and more information and before you know it, we ended up with a really good resolution, <laugh>, um, of the case. And the client was really happy. And that’s the second time I was on Good Morning America

Neil

The second time. What was the first?

Dan

Oh, in college I was at Loyola and a young friend of mine who was a tennis player there and he was handicap tennis player. And so they came out and did a story on him and I was, I played tennis with him. <laugh>, that’s, I say second time.

Neil

Awesome. So what happens after that?

Dan

After that? So I’m learning to be a lawyer differently as I learned to manage lawyers and hire lawyers and handle more business related cases instead of just plaintiff cases. Right. Or you know, non complicated business issues. So we are starting to handle shareholder fraud cases for closely held companies. And that’s just basically partners are ripping each other off. Right. You gather a bunch of money, you throw in 10,000, I’ll throw in 10,000, and then you forget about it and you don’t know. Or you find out that the company’s making a million dollars a year and your partner is driving a Rolls Royce. And that’s probably happened with our clients over the last 35 years, 50 times. Wow. And so knowing how to handle those cases has become sort of an art form. I’ve had my own ideas, but I’ve also learned from other lawyers here about, you know, their experiences and handling those disputes.

A lot of accounting. I don’t have any background on accounting, but I can read a spreadsheet <laugh>, just because I’ve hired so many experts to explain how the accounting goes, profit and law statements and how they get money out of a corporation without anyone knowing about it.

Neil

That’s why we have forensic accounting experts. Right?

Dan

Right. So before we even hire an expert, our team here knows, bring in your books and records. We’ll do something called the Spot Audit of our own and we’ll just look to see if things match randomly off by a penny.

Neil
Off by a penny, off by a million.

Dan
That’s right. So we’ve done that and our whole team is really good at doing that. And we’ve gotten some very good results from people who would probably not have gotten anything from their investment when it turns out down the road they do own and they, they were ripped off.

Neil
Mm-hmm. <affirmative>

Dan
and vice versa. A lot of times my clients will put this thing together and it won’t be doing as well as they think it is and they’ll end up with these creditor groups or investor groups saying, we want our money and you ripped us off. Or you know, you bought lunch for yourself, whatever you did, they want to make these accusations and we have to be ready to defend that and we do. So it’s been a lot of fun.

Neil
So Dan, we’ve had some really interesting work associated with the medical field. San Diego’s a large healthcare and medical community. Tell us about a few of those cases.

Dan
Well, Chris has been representing doctors and healthcare providers for 45 years. That’s one of his first, I remember the first, when he first worked for him in the eighties, he had a doctor, orthopedic surgeon here in town and helped bring in partners and, set up agreements and expense agreements and everything else and do compliance. California got a lot of compliance to be

Neil
Oh, amen.

Dan
In the healthcare work. So sometimes they fight with each other. These groups get together and one of the groups that was fighting with each other was in the surgery centers. We took on one case <laugh> and found through this spot audit process. Then we got a CPA to look at it and we found that the administrator was taking expenses out for let’s say the seven centers it managed.

Dan
And it was the same amount. Well that seems odd why maybe they just break it up evenly. But it was the same amount and it was the total amount <laugh>, meaning you think that it should be, you know, telephone expenses $400 a month, but it should have been split by seven. Instead it was multiplied by seven. I got an invoice here for a thousand.

Neil
So it’s a thousand against you, a thousand against you, a thousand against you. 10 times later now you got 10 grand.

Dan
Yeah. And on and on. And then they brought it to us and said, well what can we do? Do we just try to get our money back or you know, have them refund our money? At the same time other surgeons were signing on based on these financial records. So they were being misrepresented to. So while they’re, I don’t know if intentional or not, but while these accounting numbers were being floated around, people were signing agreements and paying membership fees and relying on them, then the company grows, it’s worth a lot more money. They should have a right to rescind the deal, which means they get much more than just your, your money back. Anyways, there’s about 14 causes of action. We brought that suit and ended up resolving that one suit favorable for our doctors where they were able to buy a hundred percent of the center and did quite well. And then Word got out <laugh> and I think we did about nine or 10 of those around the state and advised on a few outside the state.

Neil

So Dan, one of the most common new things that we’re facing are these pod actions, private attorneys, general acts. So has there been a PAGA case that sticks out in your mind that’s really interesting?

Dan
Yes, we do. A lot of them. In fact, we get tired of shipping them out. So we decided to hire an associate with lots of experience to train us up as to how to do PAGA cases <laugh>. And she has just done exactly that. And so our ability to do those cases has improved tremendously in the last five to 10 years. And we don’t refer them out, we do them ourselves and we have great success. An example, we had an employer with 170 employees and they were doing their payroll stubs incorrectly and they were going to get hit with claims going back years for every one of them that ever worked there. Plus the obligation to notify them. And so we had to jump on it quick and fast and identify it and correct as much of it as we could to take the teeth out of the case. And our clients came to us through another law firm and that lawyer also helped and followed along with our strategy and game plan. And everybody was extremely happy when the whole thing didn’t go completely bad. You have to face a judge, maybe a jury, but a judge mostly who’s got to decide what’s fair and what’s not fair on behalf of the class. And if that class is massive and all damaged and the attorney’s fee award goes through the roof and the state gets a whole big chunk of change on top of that,

Neil

You’re talking about the viability of the company itself.

Dan
Yes. Yes. That can happen.

Neil

Yes. Then when people are served, they get these complaints and they throw in the kitchen sink in a minute. But one of the things that’s almost always in there you said was unfair competition. Can you give us an example of an unfair competition case that we’ve handled?

Dan
Well first I’ll tell you what and how. How big unfair competition is.

Neil
Sure.

Dan
Unfair competition in the state of California has its own code sections. A group of them in the business and professions code. In addition, there are federal unfair competition laws and it links all the way to monopolies. And if you hear what’s going on in the golf world,

Neil
right,

Dan
what they’re saying, this is unfair competition, you can’t do this.

Neil
Yeah.

Dan
The Sherman Act, all those things are coming to play and all those laws are coming to play. And when you have your own business and you start doing well, if you advertise in a way that’s not true or fair, it’s unfair competition to your competitors.

Neil
Mm-hmm. <affirmative>,

Dan

if you don’t pay your employees the same as they have to pay, you break the law, you have an unfair advantage. So pretty much anything you do in business that’s shady, untrue, unfair, fraudulent, fraudulent can subject you to an unfair competition claim.

Neil
Ok.

Dan

On the other side, if you have a competitor doing that to you, you want a lawyer who knows how to sue for that.

Neil
Right.

Dan
And so some of the times we’ll get these real true unfair competition cases. Like for example, up in Mammoth California, we had a client and they were in business competing with another party.

Neil
Right.

Dan
And that party was making false representations about its product, its cost everything right down just clear cut. And we brought an action based on these code sections and at first the lawyers aren’t familiar with it and then they start looking down and looking in it and they see the teeth, they see the attorney’s fees, they see the punitive damages, they see the injunctive relief available for this kind of conduct. And neither to say we had a really good result, client was happy. A lot of these times you’ll see I won’t talk about details or identification because we signed confidentiality agreements. Yeah. So, but yeah, we had been utilizing those terms, those terminologies. And so when I see the arguments from the live golf tour or the PGA or um, I get tuned in, I’m like, okay, let’s see where are they going because you’re Talking my Story, you’re talking, you’re talking my language. I want to see who’s full of it. And my wife sometimes get mad at me because I’ll be yelling at the TV saying, that’s not true, <laugh>, you’re never going to win that case. Or that’s never going to happen. Yeah. So

Neil

Yeah, the worst person to take legal advice from is somebody who is in an attorney.

Dan
Well you see them on, they’re all on TV making puffing their chest out and bluffing their way around everything.

Neil

And that’s probably because they can’t do what you do in the real world.

Dan
Okay. Let’s talk about real estate and neighbors.

Neil

So we get into a lot of neighbor disputes and here, here in San Diego there is a lot of reason to have neighbor disputes. I mean the property values are huge, the view disputes. Can you tell us about a, a couple of examples on neighbor disputes.

Dan
Neighbor disputes happen all the time. Property line water. Yes. Nuisance noise, barking dogs. I mean it’s very personal and sometimes it starts with a remark and you’ll follow it through all the way to the point where they’re past the point of no return. They want to win and judges hate these kind of cases. But there are clients and we have to handle them and handle them well. We have to know the law really well and we have to do everything we can not to let our clients spend a bunch of money on us if we can’t achieve an acceptable result.

Neil

How many of these cases actually go to a trial versus what percentage of them are we able to resolve before ever getting to that point?

Dan
90% of all cases are settled. Are resolved. So I would say about the same percentage of them go to trial. The most important thing for us is, you know, the lawyers here have 25, 15, 20 years experience. Yes. And we handle 20 of these cases a year. And so once we get all the facts in, then we want to make sure that our clients are educated on the law. I mean there may be facts where your rights are being violated or your rights are not being violated. You want to know that right away without having to pay a lawyer $3,000 to research it. You should pick up a lawyer at our hourly rates and get the answer now.

Neil

Right.

Dan

And so we do that. We answer that question 20 times or more a year. And so all the lawyers, we all know the answers and we give that to them. But we also want their facts because sometimes someone’s doing you wrong, you think it’s because of one thing and you’re actually being wronged another way.

Neil
Right.

Dan
And the damages can be way higher and vice versa if you are in the right on one part. But there’s this other little part that you don’t know about. And we’ve got to say, look, sooner or later neighbors just look for pressure points. When they’re mad at each other, they are looking for any reason to be the winner and say, see I told you were wrong. And so we need to make sure we can help them. If they’re going to fight, they should have someone in their corner. We should be able to help them. And also at the same time explain this could be real costly.

Neil
It is the sum of your trial experience. Dan and Chris’s, you’ve been there, you’ve done that. You’ve established a huge track record of success, a reputation. And so what percentage, what factor do you think that comes into play when you have somebody across the table from you and they realize that our clients are represented by the Watkins firm and they know, hey you want to go to trial, we’ll take you to trial and we’re going to beat you.

Dan
Well don’t want to predict, we’re going to beat them, but we feel like it when we go to trial, we’re going to win. I mean that unless our client’s making us go against our advice.

Neil
Right.

Dan
When we finally come to the conclusion with our client saying, this is the only way we have to go to trial. And that does happen. We want to be so prepared that we feel like we’re going to win.

Neil

Yeah. We’re not out there talking and challenging people. But the reputation itself communicates a clear message, does it not?

Dan
I hope so. Yeah.

We have this, our war stories page. We have really experienced lawyers. I learn more now than I teach from the lawyers in my office for the last 30 years. We’ve had a deal that if anyone can catch me wrong on the law, I’ve got to buy them a six pack of beer <laugh>. And if they get, they don’t catch me wrong, they’ve got to buy me a six pack of beer,

Neil
that’s a good deal.

Dan
And these days I don’t bet because I’m just going to be buying six packs.

Neil
<laugh>. So of all the experiences that you’ve had Dan over the years, what was your favorite case? What was your favorite experience?

Dan
My favorite trial. Oh it had to be a last sexual harassment defense case. I did.

Neil

What happened in that case?

Dan
We were so lucky to win. Had a wonderful client, definitely wanted to go to trial. <laugh> was about principle and we went to trial and I was so stressed out because good friend of mine I didn’t want to lose.

Neil
Right.

Dan
And it was close, it was really close. The jury came back, not a hundred percent in our favor, but enough <laugh> for us to win. And so <laugh> the other side didn’t file a motion for judgment notwithstanding the jury verdict. But we filed a motion for costs and stuff like that because my client really was determined that he was in the right <laugh>. And the judge denied that and says, you should be glad that they didn’t file a motion to kick the jury verdict out and let me rule. And I folded up my file and said, thank you your honor. <laugh> And I walked out and uh, my good friend got to have the victory even though probably cost him more in fees than he could have settled it for. But I was so relieved you wouldn’t believe it.

Neil

Well Dan, that was your favorite. I think my favorite is you have a story about the second trial I think you ever did.

Dan
Yeah, I represented my parents.

Neil

Oh my

Dan
<laugh>. Yeah. Say my parents had built an industrial building, 8,000 square feet, hired a contractor. I was barely a first, second year attorney. And all the while my Dad had me help him read and draft the contract and completed the building and then the contractor sued him for change orders and he said, that’s it. We’re going to trial. My son’s a lawyer. I was oh my god, <laugh>. And of course he helped me get through law school. So it was a free trial.

Neil
Absolutely.

Dan
But it was incredibly stressful. They wandered $125,000 back in 1986. My parents, and it was a judge trial, it was his last trial, it was a bench trial and his last trial before he retired and he was falling asleep on the bench while I’m trying to win this case for my parents. And they wanted $125,000 in change charges. And I can tell you nothing prepares you for that except for maybe one class in law school where they say when the judge falls asleep, maybe drop some law books on the table to wake them up. <laugh>. So you don’t bump the table, bump the table, make a noise or something, but don’t yell at them.

Neil
Right,

Dan
right. So, uh, and

Neil

Don’t say your honor,

Dan
<laugh>. Yeah. You just, it’s very delicate. Absolutely. So we did the trial and my parents wouldn’t even sit next to each other at the same table at lunch because my Mom wanted it settled and he wasn’t going to pay a dime.

Neil
Right.

Dan
And we cross complained for some construction defect that we said there was problems with the construction, which you almost always see lawyers do in San Diego, Diego County. Whenever you know there’s a fight like this, you, if they’re going to fight about your performance, you’ve got to go inspect their performance. So we went back and forth, back and forth and then the judge says to me, at the close of my closing argument says, oh, I just want to tell you that no matter how this turns out, whether you win or lose, I think you did a fine job and your parents should be proud of you.

Dan
But even if it doesn’t go your way, you did a good job.

Neil

Oh no, that’s a kiss of death.

Dan

Yeah. I thought that was it. <laugh>, I destroyed my parents $125,000, like a million dollars today. They were like, I mean they were not going to be able to and plus attorney’s fees. So it took six months. The judge forgot about the whole trial. They had to have his research attorney review the transcript. We had, luckily we had a transcript.

Neil

Yeah.

Dan
Review the whole transcript and send us a written notice that we won <laugh> and all their claims were denied and our claims were granted. And my father was so happy and my Mom was so relieved. And then the money we received from the contractor all went to my Mom for home repairs.

Neil

<laugh>. Well I know I speak for our listeners when, you know, the law is very esoteric in some ways, but in the real world that you live in and that I live in, it comes down to very practical application and real people and real money. And

Dan
So real stress

Neil

Going through these stories, we can all see ourselves in them. And we, we really appreciate you taking the time, Dan. Thanks for sharing some of your stories,

Dan

Thank you. You can learn more about the Watkins firm at https://watkinsfirm.com or call (858) 535-1511 for a free consultation.