Litigation Update

Litigation Section News: January 2017

 • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District
 • Managing Editor, Reuben Ginsburg
 • Editor, Jessica Riggin


Table of Contents of This Issue

The California Supreme Court Speaks on Duty.

The persons injured or dead from exposure to asbestos are family members of persons who worked in facilities where they were exposed to asbestos. The questions answered by the California Supreme Court are: 1) Does an employer that uses asbestos in the workplace have a duty of care to protect employees‘ household members from exposure to asbestos through off-site contact with employees who carry asbestos fibers on their work clothing, tools, vehicles, or persons? 2) How, if at all, does this duty differ when the plaintiff states a claim for premises liability rather than general negligence? 3) If an employer or premises owner has such a duty, is that duty limited to immediate family members and members of the employee’s household, or does the duty extend to visitors, guests, and other persons with whom the employee may come into contact? California’s high court stated: “We hold that the duty of employers and premises owners to exercise ordinary care in their use of asbestos includes preventing exposure to asbestos carried by the bodies and clothing of on-site workers. Where it is reasonably foreseeable that workers, their clothing, or personal effects will act as vectors carrying asbestos from the premises to household members, employers have a duty to take reasonable care to prevent this means of transmission. This duty also applies to premises owners who use asbestos on their property, subject to any exceptions and affirmative defenses generally applicable to premises owners, such as the rules of contractor liability. Importantly, we hold that this duty extends only to members of a worker’s household. Because the duty is premised on the foreseeability of both the regularity and intensity of contact that occurs in a worker’s home, it does not extend beyond this circumscribed category of potential plaintiffs.” (Kesner v. Superior Court (Dec. 1, 2016) 1 Cal.5th 1132.)

Suit Against Lawyers Barred by Statute of Limitations. 

Plaintiff, who was represented by defendant lawyers in an underlying personal injury action, brought this action alleging numerous causes of action involving attorney fees and costs against her former attorneys. Plaintiff alleges she discovered no later than December 2011 that her former lawyers charged her too much. Based upon the statute of limitations set forth in Code of Civil Procedure § 340.6, the trial court sustained defendants’ demurrer with leave to amend. Plaintiff chose not to amend and appealed instead. The Court of Appeal affirmed, stating: “Under the three-year statute of limitations, her conversion claim had to be filed no later than December 2014. But, plaintiff did not file this action until March 25, 2015, over three months too late.” (Foxen v. Carpenter (Cal. App. 2nd Dist., Div. 8, Dec. 1, 2016) 6 Cal.App.5th 284.)

Caveat Sectorem. [“A verbal contract isn’t worth the paper it’s written on,” Samuel Goldwyn.] 

This is how the opinion begins: “We are all familiar with the phrase, ‘caveat emptor’: Buyer beware. This case deals with its less renowned cousin, ‘caveat sectorem’: Broker beware.” Defendants’ long−time friend and business acquaintance, plaintiff herein, is a licensed real estate broker. Plaintiff agreed to represent defendants in locating a home to buy, but their agreement was never put in writing. Plaintiff identified a potential property for defendants to buy—namely, a $65 million estate in the Bel Air neighborhood of Los Angeles. The listing for the property included an offer by the seller’s broker “to pay to the buyer’s broker a cooperating broker’s fee” of 2 percent of the sale price. Defendants asked plaintiff to apply any broker’s fee his company would receive and let them use it toward the purchase price, and plaintiff refused.  Plaintiff conducted negotiations, and presented an offer to the seller for a purchase price of $45 million. However, the following day, defendants instructed plaintiff to cancel the offer because they were “turned off” on the property. Three months later, defendants purchased the home for $46.25 million. Their attorney, acting as their broker, applied the $925,000 cooperating broker’s fee against the purchase price. Plaintiff brought suit, and the trial court sustained defendants’ demurrer based on the statute of frauds. In affirming, the Court of Appeal stated: “After examining in detail the statute of frauds and its exceptions, we conclude the trial court was right and affirm.” (Westside Estate Agency, Inc. v. Randall (Cal. App. 2nd Dist., Div. 2, Dec.1, 2016) 6 Cal.App.5th 317.)

The Law Never Requires Impossibilities, Civil Code § 3531. 

Penal Code § 31910, subdivision (b)(7)(A) provides that, commencing January 1, 2010, a semiautomatic pistol is an “‘unsafe handgun’” if “it is not designed and equipped with a microscopic array of characters that identify the make, model, and serial number of the pistol, etched or otherwise imprinted in two or more places on the interior surface or internal working parts of the pistol, and that are transferred by imprinting on each cartridge case when the firearm is fired . . . .” The National Shooting Sports Foundation, Inc. (NSSF) and Sporting Arms and Ammunition Manufacturers’ Institute, Inc. (SAAMI) filed the underlying action for declaratory relief seeking to enjoin this statute on the ground that it is impossible to comply with these dual placement microstamping requirements. The State of California moved for judgment on the pleadings. The trial court granted this motion without leave to amend on the ground that the separation of powers doctrine precluded appellants’ action. The Court of Appeal reversed, stating: “Civil Code section 3531 provides that ‘[t]he law never requires impossibilities.’ Appellants’ complaint alleges that it is impossible for a firearm manufacturer to implement microstamping technology in compliance with Penal Code section 31910, subdivision (b)(7)(A), because no semiautomatic pistol can be so designed and equipped. [¶] Because judgment was granted on the pleadings, we must accept the truth of the complaint’s properly pleaded facts.” (National Shooting Sports Foundation, Inc. v. State of California (Cal. App. 5th Dist., Dec. 1, 2016) 6 Cal.App.5th 298.)

Construction Defect “SB800.” 

Plaintiff filed a construction defect lawsuit, but did not follow the procedure set forth in Civil Code § 895 et seq., known as “SB 800” or the “Right to Repair Act,” which procedure permits a developer to try to resolve homeowners’ complaints without the necessity of litigation.  Plaintiff contends the prelitigation procedure does not apply because this action does not allege a statutory violation of the Right to Repair Act. The trial court denied the developer’s motion for a stay. The developer filed the instant petition seeking extraordinary relief and is the petitioner herein. The first question for the Court of Appeal was whether the developer must wait until the conclusion of the underlying action before raising the Right to Repair Act issue. The Court of Appeal concluded the developer does not have to wait to appeal later because it “does not have ‘a plain, speedy, and adequate remedy, in the ordinary course of law.’” Once it was found the developer had a right to bring the instant writ of mandate, the appellate court issued the writ after concluding “the Legislature intended that all claims arising out of deficiencies in residential construction, involving new residential units where the purchase agreement was signed on or after January 1, 2003 (§ 938), with limited exceptions not relevant here, be subject to the standards and requirements of the Act.” (Elliott Homes, Inc. v. Superior Court (Cal. App. 3rd Dist., Dec. 2, 2016) 6 Cal.App.5th 333.)

Just Because Husband is Making Less in Wages, No Showing of Changed Circumstances to Reduce Child Support. 

In a family law matter, the father petitioned the court to reduce his child support obligation due to a decrease in his wages. The court ordered the reduction despite the father’s overall wealth.  The Court of Appeal concluded that this was an abuse of discretion, stating: “We conclude that substantial evidence did not support the trial court’s finding of a material change in respondent’s circumstances for purposes of meeting his child support obligation. Specifically, we conclude that in light of respondent’s overall wealth, the reduction in his employment income did not materially impair his ability to pay the agreed upon child support.” (In re Marriage of Usher (Cal. App. 2nd Dist., Div. 4, Dec. 2, 2016) 6 Cal.App.5th 347.)

Attorney Fee Order After Successful Anti-SLAPP Motion. 

A defendant moved to strike plaintiff’s complaint pursuant to Code of Civil Procedure § 425.16, and the court granted the motion. Thereafter, the trial court ordered plaintiff to pay defendant’s attorney fees, but not in the amount requested by defendant. On appeal, the Court of Appeal noted the trial court found defendant’s request for fees (as the prevailing party) was excessive. Concluding the trial court was in the best position to judge the value of legal services rendered in its court and that the record contained sufficient support for the trial court’s decision to adjust downward the hours component for the lodestar calculus, the Court of Appeal affirmed the attorney fee order. (569 East County Boulevard, LLC v. Backcountry Against the Dump, Inc. (Cal. App. 4th Dist., Div. 1, Dec. 5, 2016) 6 Cal.App.5th 426.)

Construction Site Injury. 

An employee of a subcontractor on a construction site was seriously injured when he fell down an unguarded stairway shaft. The subcontractor was insured by defendant insurance company. Various insurance companies settled the injured employee’s action for $10 million. One of the settling insurance companies sued defendant insurance company for declaratory relief and equitable subrogation. Cross motions for summary judgment were filed. The trial court granted defendant insurance company’s motion for summary judgment. The Court of Appeal began its analysis by stating: “First, we note that the discussion of ‘burdens’ is complicated by the fact that both [parties] filed motions for summary judgment, or in the alternative, summary adjudication, below. These cross-motions for summary judgment are crucial to understand each party’s burden of proof. That is because the burdens allocated to parties are, in part, dictated by whether a party is bringing the motion for summary judgment or opposing the motion for summary judgment.” The appellate court found plaintiff insurance company did not meet its burden to demonstrate there was coverage under defendant insurance company’s policies, and that defendant insurance company did meet its burden on its own motion for summary judgment by demonstrating its insureds’ acts did not cause the injured worker’s injuries, so there was no coverage under its policies. The summary judgment entered in favor of defendant insurance company was affirmed.  (Advent, Inc. v. National Union Fire Insurance Company of Pittsburgh (Cal. App. 6th Dist., Dec. 6, 2016) 6 Cal.App.5th 443.)

Litigation is the Basic Legal Right Which Guarantees Every Corporation Its Decade in Court,” David Porter.

Pursuant to the False Claims Act (FCA; 31 U.S.C. §§ 3729-3733) former claims adjustors filed a complaint under seal in April 2006 following Hurricane Katrina. The complaint alleged that State Farm Fire & Casualty Co. instructed them and other adjusters to misclassify wind damage as flood damage in order to shift State Farm’s insurance liability to the government. A federal trial court lifted the seal in January 2007. The government declined to intervene. State Farm moved to dismiss the suit on the grounds that plaintiffs had violated the seal requirement by disclosing the contents of the complaint to news outlets, which issued stories about the fraud allegations but not about the FCA complaint itself. Both the federal trial court and appellate court declined to dismiss the action, and State Farm took the issue to the United States Supreme Court. SCOTUS agreed with the lower courts that a seal violation does not mandate dismissal of the action, noting that State Farm did not ask for a lesser sanction, which the district court had the authority to grant. (State Farm Fire & Casualty Co. v. United States ex rel. Rigsby (Dec. 6, 2016) 137 S.Ct. 436.)

“Homeowners’ Association: The Means Whereby People Who Own Homes Are Able to Transfer Their Rights to the Neighborhood Control Freak,” Ron Brackin. 

Three board members of a homeowners’ association, without suing the HOA itself, sued six other board members for declaratory relief because they didn’t like the fact that the six voted to renew a managerial contract. The six defendants brought a special motion to strike pursuant to Code of Civil Procedure § 425.16. The trial court denied the motion because the "only relief" sought by plaintiffs was a "determination of what [was] required under the HOA governing documents," and plaintiffs' declaratory relief cause of action did not arise out of the director defendants' "speech/petition rights." The Court of Appeal reversed, stating: “As we explain, we independently conclude the court erred when it found the gravamen of plaintiffs' complaint did not involve protected activity under section 425.16. We further conclude plaintiffs cannot show a probability they will prevail on their claim.” (Lee v. Silveira (Cal. App. 4th Dist., Div. 1, Dec. 8, 2016) 6 Cal.App.5th 527.)

Batson/Wheeler Issue in Death Penalty Case.  

The holdings in Batson v. Kentucky (1986) 476 U.S. 79 and People v. Wheeler (1978) 22 Cal.3d 258 are implicated when there is a charge a lawyer exercised discriminatory peremptory challenges. In this case, the prosecutor unsuccessfully “begged” the trial court to delete a question about race on the jury questionnaire. The case involved murder and attempted murder charges against African American defendants. All three of the prospective African American jurors in the venire were struck by the prosecutor. The trial court found defendants had made a prima facie showing that the challenges were improper and required the prosecutor to state his reasons for the three challenges. The prosecutor began by explaining he made notes on the jury questionnaire without looking at the race of the prospective jurors. For #1, the prosecutor wrote:  “a no way, never will he ever sit on one of my juries. . .he had been court-martialed while in the Navy.  His brother-in-law was serving six years in state prison, which [the prospective juror] did not think was fair. [He] believes that police officers gather in the hallway to corroborate their false stories before they testify. . .”  With regard to #2, the prosecutor stated he “originally rated her  . . a 5 on a scale of 1 to 10, but after listening to her, I rated her a no way will she ever sit on one of my juries.” The prosecutor noted that #2 had been arrested for drugs and it was dismissed, and her brother and nephew were in state prison for robbery, and “she doesn’t read any newspapers or watch any news.  I think it’s important to have a juror who sits in a death penalty panel to be aware of his or her surroundings and their place in the community. A person who doesn’t watch the news and doesn’t read the newspaper has a limited view of their surroundings and has a limited connection with their community.  She had absolutely no feelings about the death penalty.” As to the third prospective African American juror, the prosecutor said he originally rated #3 a 4 because “one, he had no opinion about anything.  This is a 58-year-old man who was in the Marines. . . and when I asked him . . . he gave exactly the same response he gave on the questionnaire, nothing. I can’t have again a person deciding where they stand on the death penalty, where they stand on drug dealing, where they stand on rap artists, whether they can tell if somebody is telling the truth or not in the middle of my trial.” The trial court denied the Batson/Wheeler motion and imposed a judgment of death. The California Supreme Court affirmed, stating: “The court considered the prosecutor’s reasons very carefully and made a sincere and reasoned effort to evaluate them. Accordingly, we defer to its conclusions.” People v. Melendez (Dec. 8, 2016) 2 Cal.5th 1.)

No Good Deed Goes Unpunished…Be Careful What You Guarantee! 

Plaintiff agreed to help his nephew purchase a gas station/convenience store. The nephew was to run the business, and plaintiff’s only role involved nothing more than providing the initial purchase funds and a $100,000 note secured by his residence. A year later, gasoline sales slumped by 40 percent due to the slowing economy and loss of a major state account, and the gas station began losing approximately $10,000 to $12,000 per month. Plaintiff testified he paid and borrowed more than $400,000 to keep the gas station business from defaulting on the lease. Eventually the leaseholder demanded the personal guarantee and plaintiff turned to the insurance company. However, an employee of the escrow company that obtained the insurance negligently listed the wrong name of the insured purchaser of the gas station when securing a new certificate of insurance for the business. Plaintiff sued the escrow company. So, the question became one of duty: Did the escrow company owe a duty to plaintiff, whose name was not mentioned in the escrow documents as either the purchaser or a third party beneficiary? Finding in favor of the escrow company, the Court of Appeal stated:  “We conclude [the escrow company] did not owe a duty of care to [plaintiff] because he was not a party to the escrow, not mentioned in the escrow instructions as a third party beneficiary, and did not sustain his losses as a direct result of the escrow company’s negligence.” (Alereza v. Chicago Title Co. (Cal. App. 3rd Dist., Dec. 9, 2016) 6 Cal.App.5th 551.)

Educational Benefits For Undocumented Students at the University of California. 

In 1996 Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. § 1621(a)) which, among many other things, makes undocumented immigrants ineligible for postsecondary education benefits unless a “state law” provides otherwise. The Regents of the University of California adopted policies to provide educational benefits such as a waiver of the higher nonresident tuition fees to some undocumented students. A taxpayer filed a lawsuit against the Regents alleging that its policies are contrary to federal law in that the federal statute allows a state to pass a statute to provide educational benefits, and the University of California is not a state. The taxpayer suit alleges that undocumented immigrants are ineligible for educational benefits at the University of California and seeks to enjoin the University of California from spending taxpayer funds to exempt unlawfully present aliens from paying nonresident supplemental tuition or participate in state-sponsored financial aid programs. The Court of Appeal held it need not decide whether the policies of the Regents have the force and effect of state law because the California Legislature already enacted Education Code §§ 66021.6, 68130.5, 68130.7, 70030 et seq. The Court of Appeal affirmed the trial court’s grant of the Regents’ demurrer and dismissal of the taxpayer action. (De Vries v. Regents of the University of California (Cal. App. 2nd Dist., Div. 7, Dec. 9, 2016) 6 Cal.App.5th 574)

Alleged Retaliation Against Police Officer Who Reported Other Officers for Filing False Police Reports. 

According to the complaint filed by a police officer, in 2008, while working as a detective-I in a narcotics enforcement division, plaintiff reported two of his fellow officers for filing false police reports and testified against the officers at an administrative hearing that ultimately resulted in their termination. Afterward, plaintiff’s colleagues referred to him as a “snitch” and refused to work with him. At times they even ignored plaintiff’s requests for assistance in the field. Fearing for his safety, plaintiff transferred to another division. Between 2011 and 2013 he applied for 14 highly desirable detective-I and detective-II positions. Notwithstanding his superior qualifications, his applications were denied each time in favor of less experienced or less qualified persons. Plaintiff sued the police department for unlawful retaliation. Plaintiff 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, arguing 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 plaintiff—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 plaintiff’s injury. The superior court agreed and denied plaintiff’s motion. The Court of Appeal granted plaintiff’s petition for extraordinary relief, stating the superior court should look at those officers’ personnel records and order production of those records that are relevant and not otherwise protected from disclosure. (Riske v. Superior Court (Cal. App. 2nd Dist., Div. 7, Dec. 12, 2016) 2016 Cal. App. LEXIS 1076.)

“In the Case of News, We Should Always Wait For the Sacrament of Confirmation,” Voltaire. 

Plaintiff is a television reporter who was fired by a network. He brought an action for race and age discrimination. Defendant network filed a special motion to strike pursuant to Code of Civil Procedure § 425.16. As part of its evidentiary showing, defendant submitted a copy of a newspaper article and a copy of a piece submitted for broadcast by plaintiff. There were three similarities between the newspaper article and the proposed broadcast piece. The trial court granted the special motion to strike. In reversing, the Court of Appeal stated:  “This is a private employment discrimination and retaliation case, not an action designed to prevent defendants from exercising their First Amendment rights.”  A dissenting justice stated: “I would hold that a news organization’s employment decisions concerning a person, like [plaintiff], who has an undisputedly central role on the content of the news concerns an act in furtherance of the organization’s First Amendment rights and made in connection with issues of public interest.” (Wilson v. Cable News Network, Inc. (Cal. App. 2nd Dist., Div. 1, Dec.13, 2016) 2016 Cal. App. LEXIS 1085.)

Trial Court Erred in Denying Motion For New Trial. 

A lawyer sued his former employer for breach of a promise concerning stock options. The case went to a jury “with an unclear special verdict form and unhelpful instructions.” The jury had been instructed to find the value of promised stock options, but failed to do so. Instead, it made a finding of the income the lawyer lost when he left private practice to work for defendant, despite a directive not to do that if it rejected the tort allegations, which it had. Plaintiff moved for a new trial on the ground of inadequate damages, which the trial court denied. The Court of Appeal reversed with directions the trial court grant the motion for new trial, stating: “the court was fully empowered and indeed obligated to make an independent assessment of the adequacy of the verdict. Moreover, the verdict was unmistakably unsound. If viewed as an award of tort damages, it had no foundation in law. If viewed as an award of contract damages, it had no foundation in fact. It is in all likelihood the product of juror confusion, improper compromise, or some combination of the two. Either way the findings of liability are sufficiently suspect that a retrial cannot fairly be limited to damages. Accordingly, we will direct that the court conduct a new trial on all issues unless plaintiff elects to stand on the previous judgment.” (Ryan v. Crown Castle NG Networks, Inc. (Cal. App. 6th Dist., Dec. 13, 2016) 2016 Cal. App. LEXIS 1079.)

When Unlawful Detainer Judgment is Reversed, Tenant Need Not File Cross-Complaint to Seek Restitution. 

A landlord evicted a tenant, and the tenant obtained a reversal of the judgment of unlawful detainer. The tenant then sought restitution for damages caused by premature eviction. The trial court ruled the tenant was not entitled to a restitution hearing because he had not filed an affirmative cross-complaint. The sole issue on appeal was whether a party who has obtained a reversal of judgment in an unlawful detainer case must file a cross-complaint seeking restitution to obtain that form of relief. In reversing, the Court of Appeal stated:  “We determine the court erred in denying [the tenant’s] request for a hearing on his restitution claim. Under settled law, [the tenant] was entitled to a restitution hearing even without filing a cross-complaint.” (Beach Break Equities, LLC v. Lowell (Cal. App. 4th Dist., Div. 1, Dec. 14, 2016) 2016 Cal. App. LEXIS 1084.)

“A Well Regulated Militia, Being Necessary to the Security of a Free State, the Right of the People to Keep and Bear Arms, Shall Not Be Infringed,” The Second Amendment. 

California has had some kind of waiting period statute for firearm purchases continuously since 1923. The waiting period provides time both for law enforcement to do a background check and for the purchaser to “cool off” and perhaps reconsider a contemplated impulsive act of violence or self-harm. Plaintiffs, both individuals and firearms-rights organizations, brought the present action in federal court to challenge the full 10-day waiting period imposed by Penal Code §§ 26815 and 27540 as applied to subsequent purchasers, who had previously been approved to buy firearms. That is, once the background check is completed for a current purchase, subsequent purchasers should not have to wait any longer to buy a gun. The State’s contention is that the full 10-day cooling off period is a justifiable safety precaution. The federal trial court agreed with plaintiffs that subsequent purchasers’ Second Amendment rights were violated between the time of approval of the new purchase and receipt of the new weapon. The Ninth Circuit Court of Appeals reversed, stating: “We hold that the law does not violate the Second Amendment rights of these Plaintiffs, because the ten day wait is a reasonable precaution for the purchase of a second or third weapon, as well as for a first purchase.” (Silvester v. Harris (9th Cir., Dec. 14, 2016) 2016 U.S. App. LEXIS 22184.)

“I’ll Even Throw in 30 Days Free Towing,” Car Sales Quotes. 

The Automobile Sales Finance Act (ASFA or the Rees-Levering Motor Vehicle Sales and Finance Act; Civ. Code, § 2981 et seq.) is a consumer protection law that governs the sale of vehicles where the buyer finances all or part of the purchase price. Plaintiffs purchased automobiles from a dealership. The dealership has a practice of negotiating with the customer that it has a right to rescind the purchase contract if it cannot find a lender willing to take on the finance contract within ten days. When that happens, the dealership contacts the customer and requests to change the terms of the sale and financing. Once terms are renegotiated, the dealership backdates the second contract to the date the first contract was entered. The dealership had another practice of charging unnecessary smog fees. The trial court held a court trial and ruled in favor of the dealership on all claims. The California Supreme Court held the dealership’s practice of backdating contracts does not violate ASFA, but held that its inaccurate smog fees did violate ASFA; however, plaintiffs were not entitled to a remedy under ASFA because the violation was due to an “accidental or bona fide error in computation.” (Raceway Ford Cases (Dec. 15, 2016) 2016 Cal. LEXIS 9594.)

California Supreme Court Says City Abused Its Discretion in Upholding Private Development on Public Open Space. 

A city amended its general plan to permit private development on public open space. When a citizens’ group challenged the city’s action, the city changed course and decided there was no need to amend its general plan because the development was already permissible without any amendment. Both the trial court and the Court of Appeal held in favor of the city and the developer. The California Supreme Court reversed, concluding the city abused its discretion in approving the project. (Orange Citizens for Parks and Recreation v. Superior Court (Dec. 15, 2016) 2016 Cal. LEXIS 9595.)

“Advertising is Legalized Lying,” H.G. Wells; Summary Judgment in Favor of Retailer Reversed.  

Plaintiffs filed a putative class action citing various consumer violations against a clothing retailer, alleging that signs in store windows advertising a 40−percent−off sale were false or misleading because they did not disclose that the discount applied only to certain items. The retailer brought a motion for summary judgment on three grounds: (1) plaintiffs could not establish they suffered injury as a result of the allegedly misleading advertising; (2) the signs were not misleading; and (3) plaintiffs were not entitled to injunctive relief because plaintiffs did not know whether the retailer continued to engage in the contested conduct. In opposition, plaintiffs produced evidence that in reliance on the allegedly false advertising, they were lured to shop and selected various items for purchase at the advertised discount. However, as the items were being rung up at the cash register, plaintiffs were told for the first time that the advertised discount did not apply to their chosen merchandise. Having waited in line to purchase the selected items, and out of frustration and embarrassment, they ultimately bought some (but not all) of the items they chose even though the discount did not apply. The trial court granted summary judgment in favor of defendant retailer on the ground that plaintiffs failed to establish any economic injury, reasoning that “lost shopping time” was not “money or property” as required to confer standing. The Court of Appeal concluded “that neither the ground cited by the trial court, nor the other grounds raised in [defendant retailer’s] motion, support summary judgment. Instead, we conclude that on the evidence presented, plaintiffs raised a triable issue as to whether they lost 'money or property sufficient to qualify as injury in fact, i.e., economic injury,' and whether 'that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.' (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322 (Kwikset).) Therefore, we reverse the judgment.”  (Veera v. Banana Republic, LLC (Cal. App. 2nd Dist., Div. 4, Dec. 15, 2016) 2016 Cal. App. LEXIS 1091.)

Dangerous Condition of Intersection. 

A wife and mother of five children was killed when she was hit by a car as she was walking in a crosswalk at an intersection. The family sued the driver and the city. At the close of evidence, the city unsuccessfully moved for a directed verdict on the grounds the undisputed evidence established it was entitled to design immunity under Government Code §§ 830.4 and 830.6. The jury returned a special verdict in favor of plaintiffs. The jury found that the intersection was in a dangerous condition at the time of the incident, the condition created a reasonably foreseeable risk that this kind of incident would occur, thecity had notice of the dangerous condition long enough to protect against it, and the dangerous condition was a substantial factor in causing plaintiffs’ harm. As to the driver of the car, the jury found she was not negligent, and assigned 100 percent of the responsibility for plaintiffs’ harm to the city. The jury awarded plaintiffs $3,214,134 in damages comprised of $14,134 for funeral and burial expenses, $1.2 million for past non-economic losses, and $2 million for future non-economic losses. In reversing, the Court of Appeal agreed with the city that the design immunity defense insulates it from liability for any dangerous condition of the intersection. (Gonzales v. City of Atwater (Cal. App. 5th Dist., Dec. 15, 2016) 2016 Cal. App. LEXIS 1092.)

Personal Waiver of Jury Trial Requirements in Conservatorship proceedings. 

In conservatorship proceedings under the Lanterman-Petris-Short Act (Welf. & Inst. Code, § 5000 et seq.), the trial court must obtain a personal waiver of a jury trial from the conservatee, even when the conservatee expresses no preference for jury trial. In the present case, the trial court appointed respondent C.S. as probate conservator for her niece, appellant B.C., who suffered cardiac arrest and brain damage from the combined effect of methamphetamine and alcohol.  The Court of Appeal held:  “[P]robate conservatorships do not require a personal waiver of the conservatee’s right to a jury trial because the proceedings pose no threat of confinement and are conducted ‘according to the law and procedure relating to the trial of civil actions, including trial by jury if demanded by the proposed conservatee.’” (Conservatorship of B.C. (Cal. App. 2nd Dist., Div. 6, Dec. 16, 2016) 2016 Cal. App. LEXIS 1096.)

Libel Allegations Do Not Involve Protected Activity. 

Defendant, a former certified substance abuse counselor, is the editor and publisher of a weekly electronic newsletter related to alcohol and drug treatment distributed via email to 22,000 readers and made available on a website. In 2015, an edition of the newsletter included links to 2010 and 2013 newspaper articles stating plaintiff had been stripped of his medical license in the United Kingdom. Shortly thereafter, plaintiff expressed concern about the linked articles, stating they were false, and defendant published a retraction and apology in the newsletter. Three weeks later, plaintiff sued defendant for libel and negligence. Pursuant to Code of Civil Procedure § 425.16, defendant filed a special motion to strike the complaint, asserting the statements were made in connection with matters of public interest. The trial court denied the motion, and defendant appealed. Agreeing with the trial court that the claims do not arise from activity protected by the anti-SLAPP statute, the Court of Appeal affirmed, stating: “Thus, in order to trigger section 425.16, the speech must have occurred ‘in the context of an ongoing controversy, dispute or discussion.’” (Dual Diagnosis Treatment Center, Inc. v. Buschel (Cal. App. 4th Dist., Div. 3, Dec. 20, 2016) 2016 Cal. App. LEXIS 1112.)

“Justice? - - You Get Justice in the Next World. In This One, You Have the Law,” William Gaddis.

Assembly Bill 1513 codified the holdings in two cases regarding payment to piece-rate workers for nonproductive work time and simultaneously created a safe harbor that provided employers with an affirmative defense against claims alleging failure to pay previously for nonproductive work time. (Lab. Code, § 226.2.) The safe harbor provision, however, does not apply to all employers.  Plaintiffs are employers who were precluded from using the safe harbor exception. Arguing they were not given those protections because certain labor unions objected to them, those employers brought an action against the Secretary of the California Labor and Workforce Development Agency. A federal trial judge dismissed the action, but the Ninth Circuit reversed, stating: “We hold that Plaintiffs’ complaint states a plausible claim for relief under the Equal Protection Clause.” (Fowler Packing Co. v. Lanier (9th Cir., Dec. 20, 2016) 2016 U.S. App. LEXIS 22627.)

The Trial Judge Dubbed a Family Law Party’s Conduct a “Litigation War.” 

In a family law matter, the trial judge sanctioned the wife $767,781.23 pursuant to Family Code § 271. That amount included $500,000 for her “relentless and culpable conduct” in driving up the cost of the litigation and purposefully frustrating a final settlement of the case. The Court of Appeal affirmed in part and reversed in part, stating:  “We conclude sanctions awarded pursuant to section 271 are limited to ‘attorney’s fees and costs’ and, as a result, the court erred by imposing sanctions of $500,000 for [the wife’s] conduct in increasing the cost of the litigation and frustrating settlement, and by imposing sanctions of $180,000 for causing a reduction in the sale price of real property awarded to [the husband] in the dissolution judgment, because these amounts were untethered to attorney fees and costs incurred by [the husband].” (Sagonowsky v. Kekoa (Cal. App. 1st Dist., Div. 5, Dec. 21, 2016) 2016 Cal. App. LEXIS 1117.)

Take a Break, But Don’t Relax. 

Plaintiffs worked as security guards for a security service. A job requirement was that the guards keep their pagers and radio phones on during their rest breaks. In a putative class action, plaintiffs sued their employer alleging the company failed to provide state-mandated rest periods. The trial judge found the employer liable and granted plaintiffs’ motion for summary judgment, awarding plaintiffs approximately $90 million. The Court of Appeal reversed. The California Supreme Court reversed the decision of the Court of Appeal, stating:  “[S]tate law prohibits on-duty and on-call rest periods. During required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time. . . . What they require instead is that employers relinquish any control over how employees spend their break time, and relieve their employees of all duties –– including the obligation that an employee remain on call. A rest period, in short, must be a period of rest.” (Augustus v. ABM Security Services, Inc. (Cal. Dec. 22, 2016) 2016 Cal. LEXIS 9627.)

Time For Filing Anti-SLAPP Motion. 

A special motion to strike under California’s anti-SLAPP statute, Code of Civil Procedure § 425.16, is to be filed “within 60 days of the service of the complaint or, in the court’s discretion, at any later time upon terms it deems proper.” Defendants filed a special motion to strike plaintiffs’ third amended 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 granted extraordinary relief to defendants, stating: “We hold that, under section 425.16(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, we conclude 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. 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.” (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (Cal. App. 4th Dist., Div. 3, Dec. 22, 2016) 2016 Cal. App. LEXIS 1126.)

Claimed Impermissible Final Adjudication on the Merits After Court Orders a Preliminary Injunction. 

A company hired a computer software consultant to create custom-built software, and the consultant delivered an unfinished version of the software and withheld the source code and technical specifications needed to finish it. The parties sued each other. The trial court issued a preliminary injunction that, among other things, ordered the software consultant to deliver the source code and technical specifications to the company. On appeal, the consultant argued the preliminary injunction alters the status quo and constitutes an impermissible final adjudication of the merits of the lawsuit. In affirming the order of the trial court, the Court of Appeal stated: “[A]lthough such injunctions are reserved for ‘extreme cases’ where the right to relief is ‘clearly established’ . . . this is one of those ‘extreme cases.’” (Integrated Dynamic Solutions, Inc. v. Vitavet Labs, Inc. (Cal. App. 2nd Dist., Div. 2, Dec. 22, 2016) 2016 Cal. App. LEXIS 1123.)

Filing Peremptory Challenge of a Judge After a Successful Appeal. 

Plaintiff brought an action against the National Collegiate Athletic Association (NCAA). The NCAA exercised a preemptory challenge of the trial judge pursuant to Code of Civil Procedure § 170.6. Thereafter, the NCAA unsuccessfully filed an anti-SLAPP motion. The NCAA appealed the trial judge’s denial of its special motion to strike. The Court of Appeal affirmed most of the trial court’s order, preserving most of plaintiff’s claims, but did reverse in part. The NCAA then filed a peremptory challenge of the second trial judge. Subdivision (a)(2) of § 170.6 authorizes a post-appeal peremptory challenge when the same trial judge is assigned to conduct a new trial after reversal on appeal. The Court of Appeal granted plaintiff’s petition for extraordinary relief, stating: “[W]e hold that Code of Civil Procedure section 170.6, subdivision (a)(2) allows a party to exercise a second peremptory challenge only after prevailing in an appeal from a final judgment, but not following reversal of an interim decision.” (McNair v. Superior Court (Cal. App. 2nd Dist., Div. 3, Dec. 23, 2016) 2016 Cal. App. LEXIS 1130.)

Court Declined to Order Arbitration in Employment Case. 

In an employment action, the employer petitioned the court to order the matter to arbitration. In opposition, the plaintiff former employee said she did not remember signing the “take it or leave it” arbitration provision and that there was no opportunity to negotiate its terms. The signature line for a representative of the employer was left blank. Plaintiff further argued the arbitration provision did not specify which of the 69 sets of the American Arbitration Association rules would apply to this particular binding arbitration. Further, plaintiff pointed out that the arbitration provision required mediation prior to arbitration, and the employer did not seek mediation before petitioning to compel arbitration. The trial court declined to order the matter to arbitration. In affirming, the Court of Appeal stated: “Defendants failed to prove plaintiff agreed to submit her claims to final and binding arbitration.” (Flores v. Nature’s Best Distribution (Cal. App. 4th Dist., Div. 3, Dec. 27, 2016) 2016 Cal. App. LEXIS 1133.)


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