Stone | Dean California Case Law White Paper
Quarter 4, 2016
SUMMARY OF CALIFORNIA LAW
October to
december 2016
Table of Authorities
Anti-Strategic Lawsuit Against Public Participation (Anti-SLAPP)
1
(2016) 6 Cal.App.5th 426
1
Industrial Waste and
Debris Box Service, Inc. v. Murphy (2016) 4 Cal.App.5th
1135
2
(2016) 6 Cal.App.5th 1207
3
Arbitration
5
Business and Corporate Law
7
Thompson v. Asimos,
(2016) 6 Cal.App.5th 970
7
Ryan
v. Crown Castle NG Networks, Inc., (2016) 6 Cal.App.5th 775
10
Insurance
13
(2016) 6
Cal.App.5th 443
13
Tidwell
Enterprises, Inc. v. Financial Pacific Insurance Company, Inc.,
(2016) 6 Cal.App.5th
100
13
Labor and Employment Law
15
Augustus v. ABM Security Services, Inc., 2016 Cal. LEXIS 10334
15
San Joaquin
County Correctional Officers Association v. County of San Joaquin,
(2016) 6 Cal.App.5th 1090
17
Walmart Stores, Inc. v. United Food and Commercial
Workers International Union,
(2016) 4 Cal.App.5th
194
18
Torts
20
Anderson v. Fitness
International, LLC, (2016) 4
Cal.App.5th 867
20
Foxen v.
Carpenter (2016) 6 Cal.App.5th 284
20
Khosh v. Staples
Construction Company, Inc., (2016) 4 Cal.App.5th 712
22
Moore v. Mercer,
(2016) 4 Cal.App.5th 424
24
Nava v. Saddleback
Memorial Medical Center, (2016) 4
Cal.App.5th 285
24
(2016) 4 Cal.App.5th 608
25
Wang v. Nibbelink,
(2016) 4 Cal.App.5th 1
26
569 East
County Boulevard, LLC, and others (“plaintiffs”) filed an action against
numerous entities and individuals. Plaintiffs’
complaint named Backcountry Against the Dump, Inc. (“BAD”) as a defendant and
alleged a single cause of action for unlawful interference with prospective
economic advantage. BAD moved to strike
the action pursuant to Code of Civil
Procedure § 425.16, commonly referred to as the anti-SLAPP statute. (Equilon
Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57.) After BAD’s anti-SLAPP motion was granted, it
sought attorney’s fees and costs in a total amount of $152,529.15 pursuant to §
425.16, subdivision (c)(1). Plaintiffs
did not contest defendant’s entitlement to a fees and costs award, but argued
that the amount sought was exorbitant. The
court found BAD was entitled to attorney’s fees and costs incurred for the
successful anti-SLAPP motion, but awarded a reduced amount of $30,752.86. BAD appealed from that order, arguing the
reduced award was an abuse of discretion.
The Court of
Appeal affirmed the trial court’s order, noting that review was under the
deferential abuse of discretion standard, rather than de novo, because the
record made clear that the trial court did not misunderstand the applicable
legal standards. Because there was
evidence that the motion was relatively uncomplicated and could have been
handled largely by associates billing lower rates, the trial court did not
abuse its discretion in determining a reasonable hourly rate accordingly. The record contained sufficient support for a
downward adjustment to the hour component of the lodestar because the trial
court reasonably could have concluded that many of the hours represented work
unrelated to either the merits motion or the fees motion, involved padded
entries, or were unnecessary.
(2016) 7 Cal.App.5th 416
The Court of Appeal
affirmed the trial court’s order holding that Kabateck
and McCormick’s statements were made in connection with an issue of public
interest because they related to allegations that plaintiffs conspired with
physicians to insert counterfeit hardware in thousands of people and to defraud
insurance companies, that a physician referral kickback scheme involved
prostitutes and lavish trips on private jets, and that there was a relationship
between the schemes and legislation supported by a state senator who received
financial benefits. The Court held that
plaintiffs did not have a probability of prevailing because the statements were
covered by the fair report privilege under Civil
Code § 47. The Court went on to
state that when viewed in context, the statements would have been understood as
referring to Kabateck and McCormick’s clients’ complaints, not facts, and were
therefore fair and true for purposes of the privilege.
October
28, 2016
At the center of this dispute are statements
about garbage; more specifically, statements about the activities of Industrial Waste and Debris Box Service,
Inc. dba Industrial Carting (“Industrial Carting”) which is in the business of hauling
solid waste under franchise agreements it has with several cities in Sonoma
County. Defendant Bruce Murphy is
the owner, president and sole employee of his co-defendant, IntelliWaste, Inc.,
(collectively, “Defendants”) which provides operational and financial review
and analysis of solid waste management systems, including collection, recycling
and disposal. IntelliWaste was
commissioned by North Bay Corporation (“North Bay”), to review and analyze the
Collection and Demolition (“C&D”) diversion rates by local licensed
services providers in Petaluma, Rohnert Park, Santa Rosa and Windsor. North Bay, like Industrial Carting, is
licensed or franchised to provide C&D hauling services in those
jurisdictions. IntelliWaste issued a
report to North Bay, entitled “Analysis of C&D Diversion for 2009 and 2010
in select Sonoma County Jurisdictions” (the “Report”). The Report questioned the accuracy of
statements in Industrial Carting’s public reports
about the percentages of the waste materials it collected that were recycled
and thereby diverted from landfills.
Industrial Carting’s complaint alleged IntelliWaste’s report was false
and defamatory and injured Industrial Carting’s business. Shortly after Industrial Carting served its
complaint on defendants, defendants filed an anti-SLAPP motion to dismiss the
complaint. The trial court held
defendants met their burden of showing Industrial Carting’s claims involve
speech concerning a matter of public interest and are therefore covered by the
anti-SLAPP statute, Code of Civil
Procedure §§ 425.16 to 425.18. However, the court denied defendants’ motion
because, in its view, Industrial Carting demonstrated a probability of success
on the merits sufficient to survive dismissal. Defendants timely appealed.
The Court of Appeal reversed and remanded. The Court determined that the statements
concerned a matter of public interest for purposes of anti-SLAPP protection (§
425.16, subd. (e)(4)) because limited landfill capacity and the environmental
effects of landfills are issues of significant interest. Although prepared for a competitor, the report
was not a commercial statement under Code
Civil Procedure § 425.17, subd. (c) because the consultant was not a
competitor. Because Industrial Carting provided
no evidence of its or an affiliate’s actual rates of recycling and diversion
from landfills (Public Resources Code
§§ 40124, 40180, 40192, subd. (a), 41780, subd. (a)(1), (2)), it did not show a
probability of prevailing (§ 425.16, subd. (b)(1)) on its claims.
(2016) 6 Cal.App.5th 527
Three members of a homeowners association’s board of directors brought an action
against six other board members (“director defendants”) and others following a
board vote of six-to-three to renew a homeowners association managerial
contract, in which plaintiffs voted against such renewal. Director defendants timely moved under Code of Civil Procedure § 425.16, to
strike plaintiffs’ complaint, which consisted of a single claim for declaratory
relief. The trial court denied the
motion. In so doing, the court ruled
that the “only relief” sought by plaintiffs was a “determination of what [was]
required under the homeowners association governing documents” and, as such,
that plaintiffs’ declaratory relief cause of action did not arise out of
director defendants’ “speech/petition rights.” The court therefore never reached the issue of
whether plaintiffs could satisfy their burden under subdivision (b)(1) of § 425.16
to establish a probability of success on their claim.
The Court of Appeal reversed the order with
directions. The homeowners association
board necessarily functioned similar to a quasi-governmental body, and the acts
of director defendants that were the primary focus of plaintiffs’ complaint
occurred in, or were made in connection with, meetings of the board as it was
conducting board business. That included
director defendants’ alleged failure to obtain at least three bids with respect
to a roofing project and the renewal of the management contract at issue and
their refusal to allow the board secretary to take verbatim board minutes. The Court thus concluded that the meetings of
the board in which director defendants allegedly engaged in such wrongful
conduct constituted a public forum within the meaning of § 425.16, subd.
(e)(3). Moreover, the Court held that
the acts of director defendants that were the principal thrust or gravamen of
plaintiffs’ complaint (as more precisely defined by plaintiffs on appeal) concerned
matters of public interest within the meaning of § 425.16, subd. (e)(3). Director defendants were each homeowners
association members and residents of the townhouse community, and were sued for
exercising their First Amendment rights as a result of how they voted on
subject matters pending before the board. Plaintiffs’ tactical decision to omit the
homeowners association from their action, when clearly the relief they sought
involved the homeowners association, its board, and their governance of the
community, further supported that conclusion. The Court concluded that plaintiffs could not
prevail on their claims regarding the roofing project, the taking of verbatim
notes of board meetings by the board secretary, and the management contract
because they could not show an actual controversy existed as to those claims.
(2016) 6 Cal.App.5th 1207
Defendants and appellants Morris Cerullo World Evangelism (“Cerullo”) and Roger
Artz filed a special motion under the
anti-SLAPP statute to strike the third amended complaint brought by plaintiffs
and respondents Newport Harbor Ventures, LLC, and Vertical Media Group, Inc. (collectively,
“plaintiffs”). The third amended
complaint alleged four causes of action: (1) breach of written contract, (2)
breach of the implied covenant of good faith, (3) quantum meruit, and (4)
promissory estoppel. The first two
causes of action were pleaded in earlier complaints while the latter two causes
of action were new to the third amended complaint. The act asserted by Cerullo and Artz to have
been “in furtherance of [their] right of petition or free speech” (Code of Civil Procedure § 425.16(b)(1))
was the settlement of an unlawful detainer action. That settlement was alleged in the initial
complaint and each succeeding complaint. The trial court denied the anti-SLAPP motion
on the ground it was untimely filed because it should have been filed in
response to the earlier complaints.
The Court of Appeal affirmed the order. The Court held that the filing of an amended
complaint does not automatically reopen the period for bringing an anti-SLAPP
motion. Whether the filing of an amended
complaint reopens the period for bringing an anti-SLAPP motion depends on the
basis and nature of the claims in the amended complaint. Under Code of Civil Procedure § 425.16,
subd. (f), an anti-SLAPP motion is untimely if not filed within 60 days of
service of the first complaint that pleads a cause of action coming within
anti-SLAPP protection unless the trial court, in its discretion and upon terms
it deems proper, permits the motion to be filed at a later time. Thus, the anti-SLAPP motion was untimely as to
the breach of contract and breach of implied covenant causes of action because
defendants could have challenged those causes of action by filing an anti-SLAPP
motion to prior complaints. However, the
anti-SLAPP motion was timely as to the quantum meruit and promissory estoppel
causes of action because they were new causes of action that could not have
been challenged by an anti-SLAPP motion to a prior complaint. The quantum meruit and promissory estoppel
causes of action were timely filed, and because plaintiffs met their burden of
establishing a probability of prevailing on both causes of action, the
anti-SLAPP motion was properly denied as to them. Nothing in the anti-SLAPP statute required
plaintiffs to make an election between the breach of contract and quantum
meruit causes of action in response to the anti-SLAPP motion. Moreover, at this stage, plaintiffs did not
have to elect between a promissory estoppel remedy and a breach of contract
remedy.
(2016) 6 Cal.App.5th 822
Stanley Wilson, a 51-year-old African- and Latino-American, began working for Cable
News Network, Inc. (“CNN”) in 1996 and became a producer in 2000. In 2004, Peter Janos became Wilson’s
supervisor. Wilson received no further
promotions. The final opening for which Wilson
applied was offered to a younger, Caucasian candidate with less experience. Wilson alleges that he repeatedly complained
about CNN’s failure to promote African-American men. In 2005, Wilson made a written complaint to
Janos. Allegedly in retaliation, Janos
issued Wilson a “Written Warning Regarding Performance.” In 2010,
Wilson took five weeks of paternity leave. Wilson alleges that upon his return to work,
Janos gave high-profile assignments to a younger Caucasian man with less
experience than Wilson. In 2014, Wilson submitted
a story to an editor, who expressed concern about similarity to another report.
The editor informed Janos, who, without
talking to Wilson, decided not to publish the story. Janos initiated an audit of Wilson’s work and
ultimately fired Wilson. Wilson filed
suit, alleging discrimination, retaliation, wrongful termination, and
defamation against CNN. CNN filed a
special motion to strike all causes of action under Code of Civil Procedure § 425.16, and submitted evidence of
plagiarism in Wilson’s story.
The trial court granted the motion.
The Court of Appeal reversed the judgment. The Court concluded that CNN’s conduct and
statement did not arise from an act in furtherance of their right of free
speech or to petition for redress of grievances, and were not in connection
with an issue of public interest, and therefore fell outside the scope of the
anti-SLAPP statute. This was a private
employment discrimination and retaliation case, not an action designed to
prevent CNN from exercising is First Amendment rights. The gravamen of Wilson’s employment-related
causes of action was CNN’s allegedly discriminatory and retaliatory conduct
against him, not the particular manifestations of the discrimination and
retaliation, such as denying promotions, assigning him menial tasks, and firing
him. Accordingly, the anti-SLAPP motion
was improperly granted with respect to Wilson’s discrimination, retaliation,
and wrongful termination causes of action.
CNN’s allegedly defamatory statement to the effect that Wilson
plagiarized passages in a news article regarding a public official’s retirement
in no way contributed to public debate regarding the official’s retirement. CNN’s
statement was entirely collateral to the issue of the official’s retirement and
was not made to the public. Accordingly,
the anti-SLAPP motion was improperly granted with respect to the defamation
cause of action as well.
(2016) 5 Cal.App.5th
1271
Since 1978, article V of the City of Palo Alto’s (hereafter, “City”) charter
provided that impasses in negotiations regarding wages, hours, and other terms
and conditions of employment for the City’s police and firefighters would be
submitted to binding interest arbitration. In 2011, the Palo Alto City Council (“City
Council”) voted to place on the ballot for the upcoming election a measure that
repealed this binding interest arbitration provision. Real party in interest the International
Association of Firefighters, Local 1319, AFL-CIO (“IAFF”) filed an unfair
practice charge with the Public Employment Relations Board (“PERB”), alleging
the City placed the measure before voters without consulting in good faith with
the IAFF, as required by the Meyers-Milias Brown Act (Government Code § 3500, et seq. comma after code section? Ital “et seq.”? ). A PERB administrative law judge found in the
City’s favor. This decision was later
reversed by PERB. By that time, the
measure repealing the binding interest arbitration provision had already been
passed by the voters. As part of its
remedy, PERB ordered the City to rescind its resolution from 2011 referring the
measure to the voters. Pursuant to § 3509.5,
the City requested that the Court of Appeal issue a writ of extraordinary
relief annulling PERB’s decision and directing PERB to dismiss the unfair
practice charge. The Court of Appeal
granted a writ of review.
The Court of Appeal
annulled PERB’s decision and remanded. The
Court held that PERB did not err when it found the binding arbitration charter
provision to be a mandatory subject of consultation, even if outside the duty
to meet and confer (Government Code
§§ 3504, 3505). The duty to consult in
good faith is comparable to the duty to meet and confer, requiring at least
that the parties meet and discuss the issues, which the City failed to do. Because consultation is a procedural matter,
requiring it does not violate charter city home rule (California Constitution, article XI, § 5, subds. (a), (b)). IAFF timely requested consultation. PERB exceeded its remedial authority (Government Code § 3509, subd. (b)) and
violated the separation of powers doctrine when it directed the City Council to
rescind the resolution.
Flores v.
Nature’s Best Distribution
December 2, 2016
(2016) 7 Cal.App.5th 1
Julie Flores filed a
lawsuit against Nature’s Best Distribution, LLC, Nature’s Best, KeHe
Distributors, Inc., and KeHe Distributors, LLC (collectively referred to as “defendants”),
alleging several claims under the California Fair Employment and Housing Act (Government Code § 12940 et seq.). Defendants filed a petition to compel arbitration
based on evidence that Flores signed an agreement for alternative dispute
resolution (the “Agreement”). The trial
court denied the petition. Defendants
appealed contending that the trial court erroneously concluded defendants
failed to prove Flores agreed to arbitrate her claims and that the arbitration
provision contained in the Agreement was unenforceable because it was unconscionable.
The Court of Appeal
affirmed the order. The Court held that
defendants failed to prove that Flores agreed to submit her claims to final and
binding arbitration. The Agreement was
ambiguous regarding whether the arbitration provision (not a grievance and
arbitration procedure of a collective bargaining agreement) applied to any or
all of Flores’ claims against any or all of defendants in the instant action
and regarding the governing rules and procedures for any such arbitration. The Agreement stated it was between “employee
and Company.” However, the signature
block for the employer was not filled in, dated, or signed under the heading “Authorized
Employer Signature.” The trial court
therefore did not err by denying the petition.
Business
and Corporate Law
Thompson v. Asimos
December 15, 2016
(2016) 6 Cal.App.5th 970
Jason Everett
Thompson founded a consulting firm and operated it as a sole proprietorship
under the dba Wired Real Estate Group (“WREG”) with the aim of advising clients
in a niche internet infrastructure industry called “colocation,” sometimes, but
not always, performing services that required WREG to have a real estate broker’s
license. Because Thompson did not have a
broker’s license when he founded WREG, he decided to collaborate with someone
who did, Dean Asimos. To memorialize the
terms of their collaboration, Thompson and Asimos adapted a standard form
independent contractor agreement typically used by real estate brokers and
agents. The form agreement Thompson and
Asimos used turned out to be a poor fit for the unique business context in
which WREG operated. A series of
disputes arose between the two of them concerning, among other things, alleged
underpayment of commissions and alleged failure to comply with regulatory
requirements governing real estate brokerage.
These disputes led to litigation, with the parties suing each other on
various breach of contract and business tort theories. After a bench trial,
Thompson prevailed in all respects, obtaining a substantial damages award, plus
an award of attorney’s fees. Asimos
appealed.
The Court of
Appeal vacated the damages award, otherwise affirmed the judgment, and remanded
for further proceedings. The Court held
that Thompson properly prevailed on liability because substantial evidence
supported the trial court’s implied finding that the ambiguous independent
contractor agreements, together with the undisputed parol evidence, required Asimos
to comply with the statutes and regulations that regulate the activities of
licensed real estate brokers and to register the business with the California
Department of Real Estate. However, Asimos
should not have been found liable for the entire amount of the commission
claimed from a client because Thompson settled for far less; it could not be
assumed that, had the case been tried, he would have won every penny. Further, prejudgment interest, as reduced to
85% of the net amount of the settlement, had to be recalculated based on an
accrual date fixed as of the date of the settlement pursuant to Civil Code § 3287.
(2016) 6 Cal.App.5th
847
Landlord Beach Break
Equities, LLC (“Beach Break”) filed an unlawful detainer action against tenant
Martin Lowell. The court granted Beach
Break’s summary judgment motion on the possession issue, and issued a writ of
possession (reserving damage issues). Lowell appealed the possession order to the Appellate
Division of the Superior Court (“Appellate Division”). While the appeal was pending, Beach Break
evicted Lowell under the authority of the writ of possession. The Appellate Division reversed the possession
order, finding triable issues of fact on the possession issue and remanded for
a trial. In so doing, the Appellate Division
expressly ordered that Lowell was entitled to seek restitution for any damages
caused by the premature eviction. After
the matter was transferred to an unlimited civil department, the trial court
ruled Lowell was not entitled to a restitution hearing because he had not filed
an affirmative cross-complaint. Over
Lowell’s objection, Beach Break then dismissed its action and the court entered
a final judgment. Lowell appealed.
The Court of Appeal
reversed and remanded, holding that the tenant was entitled to seek restitution
under § 908 and the trial court’s inherent equitable powers. The trial court had an affirmative obligation
to provide a restitution hearing in compliance with the remand instructions. Beach Break could not defeat Lowell’s right to
a restitution hearing by dismissing the action. The entry of a final judgment after remand was
not necessary for restitution. The
absence of an affirmative pleading for restitution did not preclude
restitutionary relief because the existence of the power to restore benefits
flowed from the rule that upon reversal the action was as though it had never
been tried.
October
20, 2016
(2016) 840
F.3d 644
Travis Z.
Gonzales sued CarMax Auto Superstores, LLC (“CarMax”), a used car retailer,
after experiencing problems with a vehicle he purchased at one of its lots. Gonzales alleged violations of four California
consumer protection laws: (1) the Consumer Legal Remedies Act (“CLRA”); (2) the
Song-Beverly Consumer Warranty Act (“Song-Beverly”); (3) common law fraud and
deceit; and (4) the Unfair Competition Law (“UCL”). Gonzales’ claims under the CLRA and UCL were
both based on CarMax’s alleged violation of California Vehicle Code § 11713.18(a)(6), which requires a car dealer to
provide consumers with a “completed inspection report” prior to the sale of any
“certified” vehicle. The District Court
dismissed Gonzales’ fraud and Song-Beverly claims and granted CarMax summary
judgment on the CLRA and UCL claims.
The Court of Appeal reversed the District Court’s
summary judgment in favor of CarMax, and remanded with instructions to enter
summary judgment for Gonzales on his CLRA and UCL claims, based on CarMax’s
alleged violations of §
11713.18(a)(6). The Court held that the District
Court properly exercised diversity-based subject matter jurisdiction over the
case based on its finding that the jurisdictional amount-in-controversy
requirement was satisfied. The potential
cost of complying with injunctive relief was considered along with Gonzales’
claims for compensatory damages and punitive damages. Interpreting the requirements of §
11713.18(a)(6), the Court held that a report that fails to indicate the results
of an inspection in a manner that conveys the condition of individual car
components to a buyer is not a “completed inspection report” under California
law, concluding that CarMax’s generic list of car parts inspected failed to
inform consumers of the material results of the inspection.
(2016) 6 Cal.App.5th
1178
In late 2014 and early 2015, VitaVet hired plaintiff and cross-defendant
Integrated Dynamic Solutions, Inc. (“IDS”) to “develop an entirely new and more
efficient” software program for VitaVet that would increase the speed and
efficiency of its online ordering, billing, payments, shipments and customer
support. The parties’ performance did
not go as planned. VitaVet made a timely
payment of $30,000 in January 2015, but IDS did not deliver a Technical Design
Document by February 20, 2015, or by March 15, 2015. VitaVet consequently withheld both the
February and March payments. IDS
delivered an “incomplete” version of the Technical Design Document that it
acknowledged was still a “work in progress” on March 20, 2015; VitaVet
thereafter paid the February and March installments and gave IDS feedback on
the “rough” draft. IDS eventually
delivered a copy of the software itself on August 14, 2015, two and a half
months after the June 5, 2015 deadline. The
parties disputed whether the software was “finished,” but did not appear to
dispute that IDS refused to deliver the source code for the software, refused
to return any of the confidential and proprietary information VitaVet let IDS
use in developing the software, and never provided a final Technical Design Document.
VitaVet did not make the final payment
under the contract. As a result, the
parties sued each other for breach of contract and other claims. The trial court issued a preliminary
injunction that, among other things, ordered IDS to deliver the source code and
technical specifications to VitaVet. IDS
appealed.
The Court of Appeal
affirmed the order. The Court held that
an injunction that alters the status quo does not constitute an impermissible
final adjudication of the merits of the lawsuit, although such injunctions are
reserved for extreme cases where the right to relief is clearly established. The instant case was one of those extreme
cases. VitaVet clearly established that
it was likely to prevail on the merits of its breach-of-contract claim, and
that contract between the parties gave all ownership of IDS’ work product to VitaVet,
going so far as to empower VitaVet to obtain copies of that product whenever it
wanted. IDS’ refusal to hand over the
source code breached those contractual provisions and damaged VitaVet’s
business operations. The balance of
interim harms also clearly established VitaVet’s entitlement to the preliminary
injunction. Denying that injunctive relief
would leave VitaVet unable to make use of the software IDS delivered, forcing VitaVet
to continue using its outdated and slow software, which was already causing
extreme employee inefficiency and significant business losses, and was
stymieing VitaVet’s plans to expand its business. At the same time, granting that injunctive
relief would cause IDS no harm because it was customized software that IDS developed
for a specific customer and for which IDS itself had no use. The Court concluded that the injunction was
not a final adjudication on the merits.
(2016) 7 Cal.App.5th 49
In early 2010, Dr.
Christine Hoang, a dentist, was terminally ill. She succumbed to her illness in March of that
year. The next month, Neeshat Khan began
exploring the purchase of Dr. Hoang’s former dental practice in Cupertino,
California. Over the course of several
months, Khan negotiated with Michael Shim, who was Dr. Hoang’s widower and the
executor of her estate. The talks were
fruitful, resulting in a purchase agreement for the sale of the practice,
signed in July 2010 (“purchase agreement”). The purchase agreement has an attorney’s fee
clause, which allows the prevailing party to be awarded fees if “any litigation
. . . is commenced between the parties to this Contract of Sale . . .
concerning its terms, interpretation or enforcement or the rights and duties of
any party in relation thereto . . . .” In
September 2012, Khan filed suit against Shim individually and as executor of Dr.
Hoang’s estate. Alleging five causes of
action: breach of contract, fraud, concealment, negligent misrepresentation,
and rescission. Shim responded, filing a
cross-complaint against Khan, alleging, among other things, that Khan had
failed to collect and remit accounts receivable, failed to provide proper
accounting for those receivables, and that Khan herself had violated various
warranties and representations in the agreement. On February 10, 2014, before trial, Khan
voluntarily dismissed her entire complaint without prejudice. Ten days later, the case proceeded to a bench
trial solely on Shim’s cross complaint. The
trial court found for Khan on all causes of action stated against her in Shim’s
cross-complaint. Thereafter, Shim filed
a motion for attorney’s fees. In her
opposition, Khan asserted that, because she had dismissed her complaint prior
to trial, Civil Code § 1717,
subdivision (b)(2), barred the recovery of any attorney’s fees spent by Shim. Khan also argued that Shim’s appeal to the court’s
discretion and his arguments about “litigation objectives” did not override the
impact of her voluntary dismissal or the language of the fee provision. The trial court ruled in favor of Shim,
holding that “Shim is the prevailing party on Khan’s dismissed Complaint,
pursuant to Code of Civil Procedure §
1032(a)(4)” which states that “‘[p]revailing party’ includes . . . a defendant
where neither plaintiff nor defendant obtains any relief.”
The Court of Appeal
reversed the judgment insofar as it declared Shim to be the prevailing party on
the complaint as a whole and remanded the matter. Because Civil
Code § 1717, subd. (b)(2), generally bars the award of attorney’s fees
after a pretrial voluntary dismissal for defense of contract causes of action, Shim
was not the prevailing party on those claims. However, the Court interpreted the fee
provision in the parties’ purchase agreement to be broad enough to cover fees
for Shim’s defense against Shim’s tort actions. While Khan’s torts were not breach of contract
claims, nor did they directly seek to enforce the contract, the tort claims
easily fell within the reach of the fee provision covering any litigation
concerning the contract’s terms because the torts were directly tied to the
allegations that certain of the terms (Shim’s warranties) were false. The trial court must determine on remand what
fees could be properly awarded to Shim and whether the fees could be allocated
between the two types of claims.
Ryan v. Crown Castle NG
Networks, Inc.
December 13, 2016
(2016) 6 Cal.App.5th 775
Plaintiff Patrick S.
Ryan brought an action against his former employer, NextG Networks, Inc., and
its successor Crown Castle NG Networks Inc. (collectively, “NextG”). Ryan alleged that NextG breached a promise to
grant him lucrative stock options as a condition of his employment. The case went to the jury with an unclear
special verdict form and unhelpful instructions. The jury sustained two contract-based causes
of action, but failed to find the value of the promised options, although it
was instructed to do so and an expert testified that the value was $326,250. Instead, the jury found that Ryan had lost
earnings of $73,522, even though the jury did not sustain a tort claim. Ryan moved for a new trial on the ground of
inadequate damages. The trial court
denied the motion while disclaiming the power to “substitute its judgment for
that of the jury” and suggesting that declarations were necessary to determine “what
the jury actually did.”
The Court of Appeal
reversed with directions as to a new trial (Code
Civil Procedure, § 657, subd. (5)). The Court held that the trial court improperly
refused to exercise its power to independently evaluate the sufficiency of the
award and incorrectly reasoned that the verdict could not be overturned in the
absence of factual declarations showing what the jury actually did. The special verdict clearly established that
the jury misunderstood the case, given that it awarded damages on causes of
action it rejected, while failing to award damages on causes of action it
sustained. The award was without factual
or legal basis because there was no evidence that the damages on the contract
claims were only $73,522; rather, the undisputed evidence was that if the
contract claims were sound, the damages were $326,250. As to remedy, the Court held that if the
employee elected to proceed with a new trial, all issues should be retried
because the record raised grave doubts as to whether the jury properly
understood the issue and suggested that the verdict may have been the product
of compromise.
October
25, 2016
(2016) 4 Cal.App.5th 698
Wolf Metals’ complaint asserted claims for open
book account, account stated, and breach of contract against Rand Pacific
Sales, Inc. (“RPS”). The complaint
alleged that Wolf Metals sold sheet metal to RPS pursuant to an oral agreement.
The complaint further alleged that RPS
owed Wolf Metals the sum of $292,055.93, which RPS had failed to pay despite
Wolf Metals’ demand. In February 2010,
RPS answered the complaint, and in June 2010, RPS filed a petition for Chapter
7 bankruptcy protection (11 United States
Code § 701 et seq.). As a result of
the bankruptcy proceeding, the Wolf Metals’ action was stayed. In the course of the bankruptcy proceeding,
Wolf Metals asserted a claim for $298,805.91 as an unsecured creditor on the
basis of “[g]oods sold.” The bankruptcy
court ultimately ordered the case closed without discharge. In September 2011, upon notice by Wolf Metals
that the bankruptcy proceeding had closed without a discharge, the trial court
authorized Wolf Metals to resume litigation of its claims against RPS. After RPS’ counsel repeatedly failed to attend
scheduled hearings, the court ordered RPS’ answer stricken and entered RPS’
default. On July 20, 2012, the trial
court entered a default judgment in Wolf Metals’ favor, awarding $292,055.093
in damages, together with $70,400 in pre-judgment interest and $430.00 in
costs. RPS did not satisfy the judgment.
In December 2012, in an effort to enforce the judgment, Wolf Metals arranged
for a judgment debtor examination of Donald Koh, RPS’ president and his wife,
who is RPS’ secretary and treasurer. After
initially refusing to answer questions, they were examined and excused. Later, when Wolf Metals propounded discovery
seeking RPS’ records, and Koh replied that he had none, stating that all such
documents had been transferred to the bankruptcy trustee or discarded. In September 2014, Wolf Metals filed motions
to compel responses to its post-judgment special interrogatories and request
for the production of documents. The
trial court granted the motions and issued an award of sanctions against RPS
totaling $1,245. In January 2015, Wolf
Metals conducted a second judgment debtor examination of Koh. Following that examination, Wolf Metals filed
a motion under Code of Civil Procedure
§ 187, seeking to amend the default judgment to name Koh and another
corporation, South Gate Steel (“SGS”), as additional judgment debtors. On March 19, 2015, the trial court issued a
written order granting the request, concluding that Koh was RPS’ alter ego and
that SGS was a successor corporation of RPS because Koh and his wife were
president, secretary and treasurer of SGS as well. Koh and SGS noticed their appeal from that
order. On May 4, 2015, the court entered an amended default judgment naming Koh
and SGS as additional judgment debtors.
The Court of Appeal reversed the amended judgment insofar as it named
Koh as a defendant, but affirmed the amended judgment in all other respects. The Court held that the trial court erred in
adding the Koh as a judgment debtor on an alter ego theory. The bankrupt corporation offered no
evidence-based defense in the underlying action, and the judgment against it
was entered by default. However, the
Court held that the trial court properly amended the judgment to add SGS as RPS’
corporate successor. RPS failed to
respond to Wolf Metals’ post-judgment discovery prior to the judgment debtor
examination, which ultimately alerted Wolf Metals’ to the SGS’ close
relationship to RPS. Thus, the trial
court reasonably rejected defendants’ contention that plaintiff failed to act
with due diligence.
(2016) 6 Cal.App.5th 443
Advent, Inc. (“Advent”) was hired as the general contractor for the Aspen
Family Village project in Milpitas, California. Advent subcontracted with Pacific Structures,
Inc. (“Pacific”). In turn, Pacific
subcontracted with Johnson Western Gunite (“Johnson”). Advent was covered by an insurance policy
issued by Landmark American Insurance Company (“Landmark”) and an excess
insurance policy issued by Topa Insurance Company (“Topa”). Johnson was covered by primary and excess
insurance policies issued by National Union Fire Insurance Company of
Pittsburgh, PA (“National Union”). While
construction on the project was underway, a Johnson employee, Jerry Kielty,
fell down an unguarded stairway shaft at the project site and sustained serious
injuries. Kielty sued Advent, and Advent
tendered its defense to its various insurance companies and to National Union. National Union initially refused the tender
but later accepted it under a reservation of its rights. Kielty settled his action for a sum of $10M. Various insurers, including Topa and National
Union (under its primary policy), contributed to the settlement. National Union continued to reserve its rights
during the settlement process, and it did not provide coverage under its excess
policy. Advent initiated an action when
it sued National Union, seeking a declaration that it was an “additional
insured” under National Union’s excess policy. Topa successfully intervened in the action,
seeking declaratory relief, equitable contribution from National Union, and
equitable subrogation. Advent moved for
summary judgment, which was denied. Advent
then dismissed its complaint against National Union with prejudice. Subsequently, Topa and National Union filed
cross-motions for summary judgment. The
trial court denied Topa’s motion and granted National Union’s motion. Topa appealed.
The Court of Appeal affirmed the judgment. The trial court did not err when it granted
summary judgment in favor of National Union because Topa failed to show that
Kielty’s injuries were caused by Johnson. Topa’s speculations about unknown facts failed
to show that a triable issue of material fact existed regarding actual
coverage. Without actual coverage, Topa
could not obtain equitable contribution from National Union. Even if National Union’s excess policy
provided coverage to Advent as an additional insured, National Union would
still be entitled to judgment in its favor, as the Advent’s excess policy was a
specific policy that attached prior to Johnson’s excess policy.
(2016) 6 Cal.App.5th 100
Financial Pacific issued general liability policies to fireplace contractor
Tidwell Enterprises between March 2003 and March 2010. Under the terms set forth in the standard CGL
forms in these policies, Financial Pacific agreed to pay sums that Tidwell
became legally obligated to pay as damages because of property damage caused by
an occurrence if the property damage occurred during the policy period. In 2006 or 2007, Tidwell worked on the
construction of a new home by installing the fireplace. On November 11, 2011 the house was damaged by
fire. State Farm, the homeowner’s
insurance carrier, covered the fire and issued a letter to Tidwell advising
that the fire may have been caused by the manufacture, design or installation
of the fireplace. Tidwell tendered State
Farm’s letter to claims professionals at Financial Pacific who, in turn, were
provided with a fire investigation report by State Farm’s forensic expert
during their investigation of the fire loss reflecting that the fire was caused
by the fireplace. State Farm sued
Tidwell for negligence to recover, in subrogation, amounts it paid to the
homeowner for the fire loss. State Farm
asserted that Tidwell negligently installed the fireplace systems in the
subject home and that Tidwell’s negligence was the proximate cause of the fire.
Tidwell tendered the suit to Financial
Pacific wherein Financial Pacific declined coverage on the grounds that no
potential for coverage existed with respect to the State Farm suit. Financial Pacific concluded that the fire
occurred long after Financial Pacific’s policies expired and that “for coverage
to exist, the property damage must take place during the policy period.” Ultimately, Tidwell initiated a bad
faith/declaratory relief action against Financial Pacific seeking a declaration
that Tidwell owed a duty to defend due to a continuing occurrences of property
damage allegedly caused by Tidwell during the operative policy period more than
a year before the fire. The trial court
granted summary judgment in favor of Financial Pacific noting that the fire
occurred after the expiration of the applicable policies and that Tidwell could
not “assert alternative causes State Farm ‘should have’ alleged in order to
create coverage issues.”
The Court of Appeal reversed the judgment and remanded the case
with instructions. The Court held that even
though the fire occurred after the relevant policy periods ended, Financial
Pacific could potentially be liable under its policies to pay any sums that
Tidwell became legally obligated to pay State Farm as damages because the
repeated exposure of the wood framing a chimney chase to the excessive heat in
the chimney, for which the contractor was responsible, may have caused physical
injury to the wood (by altering its chemical composition and reducing its
ignition point) during one or more policy periods, and that physical injury
would have caused Tidwell’s legal obligation to pay damages for the fire that
resulted (at least in part) from the damaged wood. Thus, Financial Pacific failed to eliminate
all possibility of coverage, and the trial court erred in granting summary
judgment.
Augustus v. ABM Security
Services, Inc.
December 22, 2016
2016 Cal. LEXIS 10334
ABM Security Services, Inc. (“ABM)” employs security guards across California. Jennifer Augustus and others sued ABM claiming
that ABM failed to provide guards with uninterrupted, 10-minute rest periods as
required by California law because ABM required its security guards to keep
their radios and pagers on during rest breaks, remain vigilant and respond to
emergencies. ABM’s understanding about
the scope of such needs, meanwhile, encompassed a variety of circumstances,
including situations where a building tenant wished to be escorted to the
parking lot, a building manager had to be notified of a mechanical problem, or
the occurrence of some kind of “emergency situation.” Plaintiffs sued ABM, alleging the company
failed to provide the rest periods that state law entitles employees to
receive. The trial court granted summary
judgment for plaintiffs, finding ABM liable and awarding approximately $90M but
the Court of Appeal reversed. California
Supreme Court granted review to address two related issues: whether employers
are required to permit their employees to take off-duty rest periods under Labor Code § 226.7 and Industrial
Welfare Commission Wage Order No. 4-2001 (California
Code of Regulations., tit. 8, § 11040 (“Wage Order 4”)), and whether
employers may require their employees to remain “on call” during rest periods.
California Supreme Court
reversed the Court of Appeal’s judgement holding that California law requires
employers to relieve their employees of all work-related duties and employer
control during 10-minute rest periods. The
Court found that the trial court’s summary adjudication and summary judgment orders
were premised on the understanding that Wage Order 4, subdivision 12(A) and§
226.7 prohibit on-duty rest periods which require that employers relinquish
control over how employees spend their break time, and relieve their employees
of all duties, including the obligation that an employee remain on call. The Court went on to state that “a rest
period, in short, must be a period of rest.”
(2016) 6 Cal.App.5th 215
Graniterock is a concrete company that manufactures, delivers and pours
concrete. Concrete is delivered by
Graniterock’s concrete mixer drivers, who assist in loading the concrete into
the mixer trucks, delivering the concrete to customers, and pouring the
concrete at a construction site. The
concrete that Graniterock produces is a perishable product that cannot be
stored. In addition, freshly batched
concrete must be poured within 60-90 minutes to ensure its structural
integrity. Graniterock provided its
concrete mixer drivers with the option of signing an on-duty meal period
agreement pursuant to Industrial Wage Commission (“IWC”) Wage Order No. 1,
which states: “when the nature of the work prevents an employee from being
relieved of all duty and when by written agreement between the parties an
on-the-job paid meal period is agreed to.” Graniterock provided an On-Duty Meal Period
Agreement to the concrete drivers and also advised them that if they did not
sign an On-Duty Meal Period Agreement and were
asked to work through a meal, they would receive one hour of special pay. All concrete drivers acknowledged receiving
and reviewing this policy. The concrete
drivers were also notified of their right to a 30-minute, off-duty meal period
through IWC Wage Order and other mandatory state and federal postings at each
Graniterock branch. The concrete drivers
testified that they understood that they could revoke the On-Duty Meal Period
Agreement at any time. Graniterock Concrete
drivers Brian Driscoll, Kenneth Gallardo, Donald Hopf, Chris Nowak and Brad
Storm filed an action on behalf of a class of approximately 200 current and
former concrete mixer drivers (collectively, “plaintiffs”). Plaintiffs claimed that Graniterock failed to
provide concrete mixer drivers with off-duty meal periods and failed to provide
them with one additional hour of pay for meal periods during which the drivers
opted to continue working. Plaintiffs
sought restitution under Business and
Professions Code §17200, penalties under the Private Attorneys General Act
and damages and penalties under Labor
Code §§ 226.7 and 512, subdivision (a).
The class action was tried without a jury, and the court returned a
verdict in favor of Graniterock. The
court found that Graniterock did not violate labor laws in its meal period
policies. Plaintiffs appealed.
The Court of Appeal
affirmed, holding that the Graniterock satisfied its obligation because it
informed the drivers of their right to a meal period and made an off-duty meal
period available to drivers who requested one. Although the nature of the concrete mixing and
delivering industry precluded scheduling off-duty meal periods in advance
because a driver might need to be on duty at various times depending on when
the concrete was mixed and the type of construction job, the employer was not
required to schedule meal periods.
(2016) 6 Cal.App.5th 647
Robert Riske, a retired Los Angeles police officer, sued the City of Los Angeles
(“City”) alleging the Los Angeles Police Department had retaliated against him
for protected whistleblower activity by failing to assign or promote him to
several positions, selecting instead less qualified candidates. Riske filed a discovery motion pursuant to Evidence Code §§ 1043 and 1045, which establish
procedures for the disclosure of confidential personnel records of peace
officers, to obtain certain records of the officers selected for the positions
to which he had applied. Riske asserted the
documents he sought were necessary to show the City’s stated business reason
for its promotion decisions, the successful candidates were more qualified than
Riske, was pretext for retaliation. The
City opposed the motion, claiming the officers’ personnel records were not
subject to discovery because the officers were innocent third parties who had
not witnessed or caused Riske’s injury. The superior court agreed with the City and
denied Riske’s motion. Riske petitioned
for a writ of mandate.
The Court of Appeal
granted Riske’s petition for a writ of mandate and directed the trial court to
vacate its order denying Riske’s discovery motion and to enter a new order
requiring the City to produce the
reports sought by Riske
for an in camera inspection pursuant to Evidence
Code § 1045 and to thereafter order production of all discoverable
information. The statutory scheme
governing the discovery of peace officer personnel records is not limited to
cases involving officers who either witnessed or committed misconduct. If a plaintiff can demonstrate the officer’s
personnel records are material to the subject matter of the litigation, the
records must be produced by the custodian of records and reviewed by the court at
an in camera hearing in accordance with the statutory procedures to assess the
discoverability of the information contained in them. The court must then order production of those records
that are relevant and not otherwise protected from disclosure.
San Joaquin County
Correctional Officers Association v. County of San
Joaquin
December 20, 2016
(2016) 6 Cal.App.5th
1090
In a dispute between the
County of San Joaquin (“County”) and San
Joaquin County Correctional Officers Association (“Association”) over
pension payments, specifically, cost-of-living adjustments (“COLA”), for
association members, the trial court granted summary judgment in favor of the County.
The trial court reasoned that because Government Code § 31631.5, subd. (b),
preserved the County’s right (both explicitly under Government Code § 31581.2, and by
implication under Government Code §
31873) to end the County’s payment of the employee portion of COLA payments,
which it elected to provide by local ordinance since 1975, the Association’s position
that § 36131.5, subd. (a), insulated it from any employee compensation
reductions until 2018 was not linguistically tenable.
The Court of Appeal
affirmed the judgment. The Court held
that the California Public Employees’ Pension Reform Act of 2013 (“PEPRA”) (Government Code § 7522 et seq.) was
intended to rein in what was perceived by the Legislature to be overly generous
retirement packages for public employees, but delayed the effective date of
some provisions to ease the transition and allow some changes to be negotiated
gradually. PEPRA was not designed to
shield compensation packages that were already subject to reduction under prior
laws, specifically, the County Employees Retirement Law of 1937 (“CERL”) (Government Code § 31450 et seq.). Under CERL, the County had the power to change
the COLA before 2012, subject to external labor laws, and once a bargaining
impasse was reached, had the power to impose its last, best offer, which
eliminated the COLA “pickup” it had elected to provide by local ordinance, but
had not been statutorily compelled to provide, since 1975. Nothing in PEPRA limited the County’s power in
that regard.
October 20, 2016
(2016) 4 Cal.App.5th 385
Lidia Soto sued her former employer, Motel 6 Operating, L.P. (“Motel 6”),
alleging Motel 6 violated Labor Code §
226, subdivision (a) by failing to include the monetary amount of accrued
vacation pay in its employees’ wage statements. Soto filed the action in her individual
capacity and on behalf of all aggrieved workers under the Private Attorneys
General Act of 2004 (Lab. Code § 2698,
et
seq.). Motel 6 demurred, asserting
that § 226, subdivision (a) does not require employers to itemize the monetary
value of vacation balances before the employment relationship is terminated. Motel 6 relied on the plain language of the
statute, the language of related statutes (§§ 227.3, 227.5), federal and state
case law, and a sample itemized wage statement contained on the Division of
Labor Standards Enforcement (“DLSE”) website.
In opposing the demurrer, Soto argued that § 226, subdivision (a)
requires itemization of earned “wages” and California cases have recognized (in
other contexts) that a “wage” includes vacation pay. (See Murphy
v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103; Suastez v. Plastic Dress-Up. Co. (1982) 31 Cal.3d 774, 784.) Soto emphasized the legal principle that
vacation benefits are earned and become vested during the pay period when they
accrue. (See Suastez, supra, 31
Cal.3d at pp. 778-784.) Soto
additionally argued a vacation wage reporting requirement is supported by the
strong public policy favoring timely pay for completed work. After considering the arguments and taking
judicial notice of the DLSE sample wage statement, the trial court sustained
the demurrer without leave to amend. The
court concluded Ҥ 226(a) does not require a wage statement to include the
value of vacation or paid time off wages accrued and earned.”
The Court of Appeal affirmed the trial court judgment,
holding that § 226, subdivision (a) does not require employers to include the
monetary value of accrued paid vacation time in employee wage statements unless
and until a payment is due at the termination of the employment relationship.
October
14, 2016
(2016) 4 Cal.App.5th
194
United Food
and Commercial Workers International Union (“UFCW”) and Organization United for
Respect at Walmart (OUR Walmart; collectively, the “union”) began organizing
and conducting demonstrations at Walmart stores across the United States,
including in California. The
demonstrations were part of a union campaign designed to induce Walmart to
provide its employees better working conditions and pay. The campaign also sought to pressure Walmart
to reinstate employees the union alleged Walmart had discharged or disciplined
for exercising their rights under the National Labor Relations Act (29 United States Code
§ 151, et seq.) (“NLRA”). The union
publicly indicated it was not seeking to act as the representative or
bargaining agent for Walmart employees. During the demonstrations in California, large
numbers of people typically assembled outside a store. Groups of demonstrators also entered stores.
The union filed
an unfair labor practice charge with the National Labor Relations Board (“NLRB”).
In the charge, Walmart alleged
defendants violated § 8, subdivision (b)(1)(A) of the NLRA (§ 8(b)(1)(A); 29 United States Code § 158, subd.
(b)(1)(A)) by “planning, orchestrating, and conducting a series of unauthorized
and blatantly trespassory in-store mass demonstrations, invasive ‘flash mobs’,
and other confrontational group activities at numerous facilities nationwide .
. . by which the UFCW restrained and coerced employees in the exercise of their
§ 7 rights (which includes the right to refrain from supporting the UFCW) by
attempting to impose its will on local facility management in front of facility
employees through the sheer force of a mass of moving bodies despite requests
and direction by local management to leave.” The unfair labor practice charge alleged UFCW
coerced employees when it blocked ingress and egress from Walmart facilities,
filmed employees reacting to the in-store demonstrations, threatened violence,
and attempted to make “improper payments to employees to yield to the UFCW’s
wishes.” The charge challenged union
conduct across the United States. It
also complained of conduct outside Walmart stores, including picketing and
demonstrations near store entrances and in store parking lots. The union then filed a complaint in the Los
Angeles Superior Court for trespass, seeking injunctive and declaratory relief
against UFCW. The complaint alleged UFCW
trespassed inside Walmart stores to engage in “unauthorized activities.” UFCW argued the action was preempted because
the NLRA arguably prohibited the union conduct Walmart was seeking to enjoin. The union did not argue its conduct was
arguably protected under the NLRA. The
trial court issued a preliminary injunction prohibiting UFCW, and persons
acting in concert therewith (excluding Walmart employees), from entering
Walmart’s stores to engage in “unlawful activities, such as picketing,
patrolling, marching, parading, ‘flash mobs’, demonstrations, handbilling,
solicitation, manager confrontations, or customer disruptions. . . .” The injunction did not prohibit union
representatives from accompanying a Walmart employee in discussions with a
manager to discuss labor conditions. Eventually
the parties stipulated to the issuance of a permanent injunction with terms
identical to those of the preliminary injunction, to expedite appellate review.
Pursuant to the parties’ stipulation,
the trial court entered judgment in favor of the union on all causes of action
in the complaint. An appeal timely
followed.
The Court of Appeal affirmed the judgment, holding that when a dispute
involves conduct that is arguably prohibited under the NLRA and also
constitutes trespass under state law, the NLRA will not preempt the state
trespass claim so long as it concerns the location of union conduct, rather
than the objective, purpose, or effect of the conduct.
October
27, 2016
(2016) 4 Cal.App.5th 867
Kirk Anderson, who was in his early 60’s, joined the L.A. Fitness health club
in Glendale, California. He signed a
membership agreement, which released L.A. Fitness from all liability to for any
loss or damage or injury whether caused by the active or passive negligence of
L.A. Fitness. Approximately a year
later, Anderson finished his exercises at the health club and went to take a
shower. The shower room is a single
large room with approximately seven shower heads on the walls. It has a tile
floor which Anderson alleges has significant and sharply downward slanting
slopes towards two drains located in the center of the room and is layered and
covered with body oil and soapy residue. There are no handrails, shower mats,
or friction strips in the room. Anderson
wore shower sandals and was carrying his soap in one hand. As Anderson moved towards one of the shower
nozzles, his left foot slipped, and he began to fall. Anderson extended his
left arm to brace himself. When he hit
the floor, he felt extreme pain in his arm between his elbow and shoulder; his
humerus had snapped in two. Anderson filed
a complaint against L.A. Fitness a result of the incident. L.A. Fitness moved for summary judgment,
asserting “[t]he release and waiver of liability within [Anderson’s] Membership
Agreement bars any and all claims against [L.A. Fitness].” In support of its motion, L.A. Fitness also
filed a separate statement of undisputed facts, which set forth the language of
the Release. The trial court noted that
Anderson had conceded the waiver he signed with L.A. Fitness barred any claim
against L.A. Fitness for negligence and that both parties agreed that the
waiver did not bar a claim for gross negligence. The trial court found that Anderson had “neither
pled, in the complaint, nor articulated, in opposition to the motion, any facts
that would support a finding that [L.A. Fitness] acted with gross negligence,
as opposed to ordinary negligence.” The
trial court thus granted the summary judgment motion and entered judgment in
favor of L.A. Fitness. Anderson filed a timely notice of appeal.
The Court of Appeal affirmed, holding that Anderson failed to plead
sufficient facts to support a theory of gross negligence by alleging that the
tile floor in the shower room was routinely covered in oily and soapy residue
without alleging any further facts to show that the condition of the floor was
an extreme departure from ordinary conditions in such facilities or that L.A.
Fitness had taken no measures to reduce the inherent risk. L.A. Fitness’ assertion of a release as a
complete defense to an ordinary negligence cause of action (Civil Code § 1714, subd. (a)) shifted
the burden to the patron on summary judgment to produce evidence showing a
triable issue of material fact. The
Court further held that the release was not invalid on public policy grounds (Civil Code § 1668) absent evidence of
grossly negligent conduct.
Foxen v. Carpenter
November 3, 2016
(2016) 6 Cal.App.5th 284
Christine Foxen sued her former attorneys, John Carpenter, Paul Zuckerman,
Nicholas Rowley and Carpenter, Zuckerman & Rowley, LLP (“attorneys”), who
had represented her in a personal injury action. Foxen alleged 10 causes of action: (1)
declaratory relief; (2) breach of fiduciary duty; (3) breach of contract/fee
agreement; (4) breach of contract/personal injury lien; (5) unfair and
deceptive business practices; (6) fraud; (7) conversion; (8) breach of the
implied covenant of good faith and fair dealing; (9) money had and received;
and (10) accounting. The attorneys demurred,
arguing primarily that Foxen’s claims were time-barred. After oral argument, the court sustained the
attorneys’ demurrer with leave to amend. Foxen chose not to amend, and a dismissal of the
action was entered. Foxen appealed.
The Court of Appeal
affirmed the judgment. The Court
disagreed with Foxen’s effort to characterize her contract claims as arising
from breaches of ordinary, non-legal duties. The Court held that the contract claims were
based on the attorneys’ alleged misconduct in allocating the settlement funds in
the personal injury action, either because they incorrectly calculated the
litigation costs, or because they breached their fiduciary duties to her by
intentionally manipulating those charges in order to recover more monies than
that to which they were entitled. Foxen
would not be able to establish her contract claims without demonstrating that
the attorneys breached the professional duties owed to her, or non-legal
services closely associated with the performance of their professional duties
as lawyers. Code Civil Procedure § 340.6, subd. (a), therefore applied, and Foxen’s
failure to file her action within one year after she discovered the false
charges that formed the basis of the contract claims was fatal to the claims. Foxen’s accounting claim was untimely for the
same reasons. Even assuming that Foxen’s
conversion claim was not governed by § 340.6, subd. (a), the claim was still
time-barred under Code Civil Procedure
§ 338, as was her fraud claim, because she failed to bring the claims within
three years of her discovery of the alleged wrongful charges and fraudulent
withholding by the attorneys. The Court
concluded that Code of Civil Procedure
§ 340.6, subd. (a), applied to bar Foxen’s unfair business practices claim
because it is more specific than Business
and Professions Code § 17208.
(2016) 6 Cal.App.5th 929
In December 2010, Michelle Carrizales was making a left turn at an intersection
in the City of Atwater (“City”) when she struck and killed Delia Gonzales, a
pedestrian in a crosswalk. Gonzales’ husband
and five adult children (collectively, “plaintiffs”) sued Carrizales and the
City for wrongful death, alleging Carrizales was negligent and the City was
liable under Government
Code § 8351 for the dangerous condition of the intersection. A jury trial was held, at which the jury found
Carrizales not negligent and
the City solely liable
based on the dangerous condition of the intersection; the jury awarded
plaintiffs approximately $3.2M in economic and non-economic damages. In its motion for judgment notwithstanding
the verdict (“JNOV”), the City renewed an argument it made on its unsuccessful
motion for directed verdict that the design immunity defense of Government Code § 830.6 shielded it from
liability. The trial court denied the JNOV. The City appealed challenging the jury’s
finding that the intersection was in a dangerous condition and asserts it established
the design immunity defense as a matter of law. The City also attempted to challenge the jury’s
finding that Carrizales was not negligent and contended that the non-economic
damages awarded to plaintiffs were excessive.
The Court of Appeal
reversed the judgment against the City and remanded the matter with directions.
The Court observed that the parties agreed
that the first element of design immunity, a causal relationship between the
design and the fatality, had been satisfied. The Court held that the evidence demonstrated
the discretionary approval element as a matter of law because the City
presented undisputed evidence that the 2001 plans for the intersection were
designed by a professional engineering firm, reviewed and approved by the city
engineer, who had the discretionary authority to approve the plans, and
approved by the city council. The 2001
plans consisted of detailed drawings of the intersection where the accident
occurred, including the light phasing and signage. Evidence of the deliberative process was not
required to show discretionary approval. Instead, the wisdom of approving the 2001
plans with permissive phasing was judged under the reasonableness element of Government Code § 830.6. The record showed that plaintiffs conceded at
trial that the 2001 plans were reasonable when they were approved. Specifically, the concession was made by
plaintiffs’ counsel in the midst of the City’s case-in-chief, during a break in
the direct examination of one of its witnesses, and there was nothing in the
record to suggest the concession was inadvertent or spontaneous. Accordingly, plaintiffs were bound by the
concession, and the City was therefore not required to prove reasonableness. Because all the elements of design immunity
were established, the City was immune from liability for any dangerous
condition of the intersection.
October 19, 2016
(2016)
4 Cal.App.5th 329
Jing Huang was injured boarding a shuttle bus provided by The Bicycle Casino,
Inc. (“Bicycle Casino”), which transported passengers from Monterey Park to
Bicycle Casino in Bell Gardens. Huang
alleged Bicycle Casino was a common carrier and had a duty and responsibility
to ensure the safety and security of its patrons who took the shuttle bus. On the day in question, Huang was waiting for
the Bicycle Casino shuttle along with a crowd of others. When the shuttle arrived, it stopped
approximately 20 to 30 meters from where the group was standing. The waiting
crowd ran toward the shuttle, and Huang rushed to the shuttle with everyone
else. Huang was on the left side of the
shuttle entrance, and with her left hand on the handrail, she put her right
foot on the first step. The crowd on the
right side surged, and she was pushed and fell. Paramedics took Huang to the hospital, where
she had an X-ray. She had a broken bone
in her left hip that required surgery the next day. The court granted Bicycle Casino’s motion for
summary judgment holding that Bicycle Casino was not a common carrier and owed
only a duty of ordinary care to the shuttle passengers, and that the scope of
the ordinary duty of care did not extend to protecting Huang from being bumped
by other passengers as she boarded the shuttle. Huang timely appealed.
The Court of Appeal reversed the trial court’s ruling,
holding that material fact issues as to whether Bicycle
Casino indiscriminately offered the shuttle bus to the public for reward
precluded summary judgment on common carrier status and the applicable standard
of care (Civil Code §§ 2096, 2100,
2168). Even if Bicycle Casino had only a duty of ordinary care (Civil Code § 1714, subd. (a)) as a
private carrier, there was no exemption from the duty of ordinary care as a
matter of law because it was foreseeable that a large group of passengers might
push while boarding even if there had been no prior similar incidents,
inexpensive measures could be taken to control such crowds, and questions of
proximate cause and whether the conduct of third parties might relieve Bicycle
Casino of liability were for the jury.
October 26, 2016
(2016)
4 Cal.App.5th 712
Al Khosh was injured while performing electrical work at California State
University Channel Islands (the “University”). He was employed by Myers Power Products, Inc.
(“Myers”), a subcontractor on the project. The University hired Staples Construction
Company (“Staples”) to install a backup electrical system at the university. Staples hired DK Electrical Systems, Inc. (“DK”)
as the high-voltage subcontractor for the project. DK hired Myers to construct and install
electrical switchgear for the system. The
contract between Staples and the University required Staples to “exercise
precaution at all times for the protection of persons and their property,” and
to “retain a competent, full-time, on-site superintendent to . . . direct the
project at all times,” among other things. It made Staples “exclusively responsible” for
the health and safety of its subcontractors, and required Staples to submit “comprehensive
written work plans for all activities affecting University operations,”
including utility shutdowns. Myers
informed Staples it needed three days to accomplish its last task on the
project, including a shutdown of the electrical system. The University scheduled a campus-wide
electrical shutdown. The shutdown was to
be followed by final testing of the system’s operation. Khosh arrived at the University two and a
half hours before the scheduled shutdown time. The University’s project manager let Khosh and
a helper into a substation containing electrical switchgear. Khosh performed work in the substation, while
the switchgear was still energized. An
electrical arc flash occurred, severely injuring him. The flash occurred approximately half an hour
before the shutdown was scheduled to begin. Staples did not have any personnel
at the University at the time. Khosh
filed a complaint, asserting a cause of action for general negligence against
Staples. Staples moved for summary
judgment relying upon the Privette doctrine (Privette v. Superior Court (1993) 5 Cal.4th 689, 702 (Privette)) which generally prohibits the
employee of a contractor from suing the hirer of the contractor for
work-related injuries. (Privette,
supra, 5 Cal.4th at p. 702.) Khosh argued Privette did not bar his claim because (1) Staples retained control
over the work and affirmatively contributed to his injuries (Hooker
v. Department of Transportation (2002) 27 Cal.4th 198, 202 (Hooker)) and (2) Staples violated non-delegable
regulatory duties because it did not have a qualified electrical worker present
to supervise Khosh and did not prepare a written procedure for the electrical
shutdown. The trial court granted
Staples’ motion for summary judgment because Khosh failed to establish that
Staples retained control over his work and affirmatively contributed to his
injury.
The Court of Appeal affirmed the judgment. The Court held that while Khosh presented sufficient evidence that the Staples
retained control over safety, there was no evidence that Staples affirmatively
contributed to Khosh’s injury. Staples’
agreement with the University imposed only a general duty to prevent accidents,
it did not impose specific measures that Staples was required to undertake in
response to an identified safety concern. There was no evidence that Staples refused a
request to shut off electrical power or prevented Khosh from waiting until the
scheduled shutdown before starting work. There was also no evidence Myers or Khosh
relied on a specific promise by the Staples. The Court concluded that safety regulations
that Khosh claimed required Staples to have a qualified electrical worker
present to supervise Khosh and to prepare a written procedure for the
electrical shutdown did not impose non-delegable duties. However, even if they did, the absence of a
work plan or a supervisor did not affirmatively contribute to Khosh’s injuries.
October 24, 2016
(2016)
4 Cal.App.5th 500
Joshua B. Nozar drove a Range Rover to college for a 9:30
a.m. class and could not find parking in a campus parking lot. Sometime between 9:20 a.m. and 9:45 a.m., he
exited the parking lot and drove southbound on 10th Street looking
for a place to park. He proceeded to the
intersection of 10th Street and Broadway. While 10th Street was controlled by
a stop sign going southbound and going northbound, Broadway was not controlled
by a stop sign, and he knew motorists on Broadway had the right-of-way. Nozar saw a parking space on the street on the
opposite side of the intersection. At
the same time, Sassa Minnegren was driving eastbound on Broadway in a small
car. When Nozar proceeded into the
intersection, Minnegren hit Nozar and was injured in the collision. The jury rendered a special verdict in favor
of Nozar. The trial court entered judgment
on the special verdict, and Minnegren filed a notice of intention to move for a
new trial, and filed motions for a new trial and judgment notwithstanding
verdict based on insufficiency of the evidence. The trial court denied both motions.
The Court of Appeal affirmed the judgment and order holding
that the evidence was sufficient to support the jury’s finding that Nozar was
not negligent because he testified that he looked, saw Minnegren’s car
approaching, and thought he could make it through the intersection safely. According to his testimony, Nozar exercised
some measure of care, and it was up to the jury to determine whether he
exercised due care. Nozar’s failure to
take a second look was not per se negligent, and the jury was empowered to
decide if it was reasonable.
October 21, 2016
(2016) 4 Cal.App.5th 424
Lillie Moore was injured in a collision and sued Richard
Mercer, the driver of the other car, who admitted to negligence. During discovery, the trial court denied Mercer’s
motion to compel Dr. Orisek, a nonparty to the litigation, to produce billing
records, payment records, and records evidencing any agreements for the medical
care of Moore related to her treatment. Citing
privacy and confidentiality, Dr. Orisek refused to produce his agreement with
MedFin, a financial service company that purchases medical bills, and the liens
securing them, from health care providers.
Moore’s lawyer made repeated efforts to meet and confer with defense
counsel and produced all the documents sought by Mercer except the written
agreement between Dr. Orisek and MedFin regarding the sale of bills and liens. The documents produced by Dr. Orisek included
both the lien agreement between Dr. Orisek and plaintiff, and the notification
from Dr. Orisek to plaintiff that her lien had been sold to MedFin and that she
was obligated to pay the full amount to MedFin. Defense counsel did not respond to the
meet-and-confer efforts by plaintiff’s counsel.
The trial court denied the motion and awarded Moore $2,500
in sanctions. At trial, the jury awarded
Moore $522,689 in damages, including $122,689 for past medical expenses, which
was $51,582 more than what the defense expert opined was the reasonable value
of the services.
The Court of Appeal reversed the order for discovery
sanctions and otherwise affirmed the judgment, holding that case law does not
cap a plaintiff’s damages to the amount a medical finance company pays health
care providers for their accounts receivable and medical liens. Further, case law does not limit the trial
court’s discretion pursuant to Evidence Code
§ 352, to exclude evidence of the amount a medical finance company pays if the
court decides that the evidence was minimally probative and would necessitate
an undue consumption of time to try collateral issues. In the current case, the trial court carefully
weighed the minimal probative value against the cost and distraction of trying
why Dr. Orisek would sell and MedFin would buy a substantially discounted
account receivable and lien. The Court
also held that the terms of the agreement between MedFin and Moore’s providers
may be relevant and discoverable. The
Court also held that in the current case, no prejudice resulted from denying Mercer’s
motion to compel, and sanctions should not have been imposed.
September 23, 2016, publication ordered October 18, 2016
(2016) 4 Cal.App.5th
285
Manuel Nava was injured while a patient at Saddleback Memorial Medical Center (“Saddleback”).
His injury occurred while he was being
transported in the hospital on a gurney. Nava filed a complaint sounding in negligence
against Saddleback and an ambulance service, Herren Enterprises, Inc. (“Herren”).
The complaint was filed more than one
year, but less than two years, after his injury. Both Saddleback and Herren filed motions for
summary judgment, contending that the complaint was time-barred under Code of Civil Procedure § 340.5, which
imposes a one-year statute of limitations when an injury is caused by the
professional negligence of a health care provider. The trial court granted the motions ruling
that the statute of limitations for professional negligence under § 340.5
barred Nava’s claims.
The Court of Appeal affirmed, holding that the alleged
negligence was integrally related to Nava’s medical diagnosis or treatment and
therefore was subject to the one-year statute of limitations for professional
negligence under § 340.5, instead of the two-year statute of limitations for
ordinary negligence (Code of Civil
Procedure § 335.1), because the patient was being transported pursuant to a
medical professional’s directive. The
Court also held that there was no merit to Nava’s argument that a premises
liability cause of action should be analyzed any differently, and summary
judgment was properly granted because there were no disputed issues of material
fact as to the date on which the injury occurred or that the complaint was filed
more than one year later.
October
6, 2016
(2016)
4 Cal.App.5th 608
Helmerich
& Payne International Drilling Co. (“H&P”) operates oil drilling
rigs. The rigs operate 24 hours a day
with two crews working 12 hours per day for 14 days. H&P provides employees who live more than
two hours away from the rig location with free lodging at a local hotel. Employees who stay at the hotel are
responsible for arranging and paying for their own transportation between home
and the hotel and between the hotel and the job site. Luis Mooney, who lives near the rig provided
two out-of-town employees, his supervisor, Ruben Ibarra, and Mark Stewart, with
rides to and from the drill site in his Ford pickup. On the date in question, after the end of
their shift, Mooney was driving home and giving Stewart and Ibarra a ride to
the hotel when his truck collided with a truck driven by Plaintiff Brent
Pierson. Both drivers and all of the
passengers were transported to the hospital.
Pierson and his wife filed a personal injury lawsuit against
Mooney. Approximately one year later,
they added H&P as a defendant. Pierson’s
employer’s worker’s compensation carrier intervened in the lawsuit, alleging
that Mooney was the employee of H&P and that he was acting in the scope and
course of his employment with H&P.
H&P filed a motion for summary judgment against Pierson and the
worker’s compensation carrier asserting that the accident occurred when Mooney
was driving home from work and did not occur while he was in the course or
scope of his employment. The trial court
granted H&P’s motion. Pierson
appealed.
The
Court of Appeal affirmed the judgment holding that H&P was not liable as a
matter of law for the traffic accident, because the undisputed facts
established that the going and coming rule applied. Thus, it could not be reasonably inferred
that H&P impliedly required or requested Mooney to provide transportation
to Ibarra between the hotel and the jobsite. Ibarra’s requests for such rides were personal
in nature and were not reasonably imputed to H&P.
October 13, 2016
(2016) 4 Cal.App.5th 1
A
horse ran away from a meadow owned by defendants Gregory Nibbelink, Bevlee
Nibbelink, Gary D. Nibbelink, Linda A. Nibbelink, Robert G. Goulding, Diane K.
Goulding, and Nibbelink Revocable Family Trust (“Meadow Landowners”) onto
adjacent property known as Strawberry Lodge (“Lodge”) and trampled plaintiff
Yan Wang as she and her husband, plaintiff Tyler Raihala (collectively, “Plaintiffs”),
got out of their car to dine at the Lodge.
The horse was part of the Wagon Train, an annual historical event
simulating Old West travel by stage coach across the Sierras in Northern
California. The Meadow Landowners were
not involved in the event but allowed the event organizers and participants to
use the meadow for overnight camping and horse containment. Plaintiffs had nothing to do with the Wagon
Train, not even as spectators. The trial
court entered summary judgment in favor of defendants holding that under Civil Code § 846, the Meadow Landowners
were shielded from liability “for any injury to person or property caused by
any act of the person to whom permission has been granted.”
The
Court of Appeal affirmed the judgment. The court concluded that § 846, applies to
relieve a landowner of liability for injury caused by a recreational user to an
off-premises nonparticipant. The event
and the horse rider were using the land as part of their recreational
activities. § 846 applied despite
plaintiffs’ allegations that the Meadow Landowners’ own negligence contributed
to the injuries. Plaintiffs failed to
show any potential for liability independent of § 846; accordingly, the trial
court properly entered summary judgment in favor of the Meadow Landowners.
Roberta F. Miller sued the City of Portland and three Portland police officers under 42 United States Code § 1983 for asserted Fourth Amendment violations. Portland made a Federal Rule of Civil Procedure 68 Offer of Judgment for $1,000, plus reasonable attorney’s fees to be determined by the District Court, which Miller accepted. When Miller moved for fees, however, the District Court denied the motion on the ground that the $1,000 award was a de minimis judgment under 42 United States Code § 1988.
David M. Emanuel attended a basketball game at the Los Angeles Lakers’ (“Lakers”)home arena, the Staples Center. While at the game, Emanuel observed a message on the scoreboard, inviting attendees to send a text a message to a specific number. Emanuel sent a text message to the number, hoping the Lakers would display the message on the scoreboard. In response, Emanuel received the following text message: “Thnx! Txt as many times as u like. Not all msgs go on screen. Txt ALERTS for Lakers News alerts. Msg&Data Rates May Apply. Txt STOP to quit. Txt INFO for info.” 
86-year-old Frederick Mahan and his 79-year-old wife Martha Mahan and their daughter, Maureen Grainger, as trustee of the revocable living trust that held their life insurance policies, filed suit against Charles W. Chan, the Charles W. Chan Insurance Agency, Inc., Omar Kaddoura, Cung Thai, and the American Brokerage Network (collectively “Defendants”), all of whom provided life insurance advisory services to the couple. The complaint alleged causes of action for violations of the Elder Abuse and Dependent Adult Civil Protection Act (“The Elder Abuse Act”) (Welfare & Institutions Code § 15600 et seq.), negligence, breach of fiduciary duty under Insurance Code § 785 et seq., fraud, and unlawful business practices under Business & Professions Code § 17200.
Riddell, Inc. and other football helmet manufacturers and affiliates (collectively, “Riddell”) are defendants in lawsuits filed by numerous former professional football players alleging personal injuries resulting from their use of Riddell football helmets (“third party actions”). Riddell filed suit against numerous insurers (collectively, the “Insurers”) alleging that they owe Riddell a defense and indemnity in the third party actions. In Riddell’s action against the Insurers (the “Coverage Action”), the Insurers propounded discovery seeking information relating to prior claims against Riddell, which model of Riddell helmet each of the plaintiffs in the third party actions wore, and the dates of use.
Antonio Alamillo filed this suit against BNSF Railway Company (“BNSF”) for wrongful termination in violation of public policy, based on underlying violations of California Fair Employment and Housing Act (“FEHA”), California Government Code § 12940 et seq. Alamillo claims that BNSF discriminated against him on the basis of his disability, failed to accommodate his disability, and failed to engage in an interactive process with him to determine a reasonable accommodation for his disability. See California Government Code §§ 12940(a), (m)(1), (n).
