Litigation Update

Litigation Section News: June 2016

 • 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

Terminating Sanction Granted For Violating Pretrial Orders Excluding Evidence.

Plaintiff fell 11 feet to the ground while throwing down bales of hay. Plaintiff alleged one of the bales was defective and brought an action against a manufacturer of bales. The trial court struck plaintiff’s expert designation after finding plaintiff calculated to place the defendant at a disadvantage by delaying designation of plaintiff’s experts until after the defense list was received. In a motion in limine, the defendant asked that plaintiff not be permitted to testify as an expert. The defense also asked that certain other evidence be excluded. The trial court granted both motions. In plaintiff’s opening statement, plaintiff’s counsel told the jury the evidence would show that “the alfalfa was from [defendant company]. Looking at the alfalfa hay that came from up north in Northern Nevada from [defendant company], it was greener. It didn’t contain the dryer hard stems that she noticed in other deliveries.” During direct examination of plaintiff, the court had to repeatedly order plaintiff’s counsel to move on to other areas that had not been excluded, but counsel kept going back to excluded areas. At one point, the court excused the jury and admonished plaintiff’s counsel for “flagrant, flagrant misconduct,” and the court dismissed the action with prejudice. In affirming the terminating sanction because there was no abuse of discretion, the Court of Appeal noted the trial court did not credit plaintiff counsel’s explanation and believed counsel acted intentionally, and that the appellate court was bound by that implied credibility finding. (Osborne v. Todd Farm Service (Cal. App. 2nd Dist., Div. 6, May 2, 2016) 247 Cal.App.4th 43.) http://www.courts.ca.gov/opinions/documents/B260280.DOC

Judgment Debtor Must Produce Tax Returns.

In a judgment debtor proceeding, the debtor contends the trial court erred when it ordered him to produce certain records because the subpoena service was improper and because his tax returns are privileged. With regard to the alleged service deficiency, the Court of Appeal found the argument was waived below. As to the tax returns, the Court of Appeal stated the purpose of a judgment debtor examination is to leave no stone unturned, and the debtor must produce his tax returns. (Li v. Yan (Cal. App. 1st Dist., Div. 2, May 2, 2016) 247 Cal. App. 4th 56.) http://www.courts.ca.gov/opinions/documents/A144994.DOC

“The Biggest Challenge After Success Is Shutting Up About It,” Criss Jam.

A jury awarded a plaintiffs’ verdict, and the plaintiffs’ law firm issued a press release headlined: “JM Eagle faces billions in damages after jury finds JM liable for making and selling faulty water system pipes.” The press release also stated that a federal jury unanimously agreed defendant knowingly manufactured and sold to governmental entities substandard plastic pipe. The defendant brought an action for defamation and trade libel. The plaintiffs’ law firm, now a defendant, brought a special motion to strike pursuant to Code of Civil Procedure § 425.16, contending the press release contained statements about ongoing litigation and that the pipe manufacturer could not show a probability of prevailing on the merits of its defamation claim. The trial court denied the motion. The Court of Appeal reversed, stating the plaintiffs’ firm “may be guilty of self-promotion and puffery,” but “[t]he substance of its report was accurate. The release was absolutely privileged under Civil Code section 47, subdivision (d).” (J-M Manufacturing. Co., Inc. v. Phillips & Cohen LLP (Cal. App. 2nd Dist., Div. 7, May 2, 2016) 247 Cal. App. 4th 87.) http://www.courts.ca.gov/opinions/documents/B256927.DOC

Factors, Factors Everywhere.

A man settled his workers’ compensation claim in a structured settlement approved by the Workers’ Compensation Appeals Board. The settlement provided for an immediate lump-sum payment and monthly payments of $2,800 for life, with ten years guaranteed. The employer assigned the obligation to an assignment company, and the agreement between the two provided that the payments “cannot be accelerated, deferred, increased or decreased” by the injured man. The agreement was approved by the Board. Three years later, the injured man filed a request for entry of a clerk’s judgment pursuant to Labor Code § 5806, which provides that a party to a workers’ comp proceeding may obtain a judgment on the award simply by filing a certified copy of the findings, order and decision. A funding company then moved for entry of a qualified order approving assignment of the judgment from the injured man to the funding company. The assignment company filed an opposition. The trial court denied the funding company’s motion, concluding that converting the workers’ compensation award to a judgment did not alter the character of the award and its assignment is prohibited by Labor Code § 4900, which prohibits assignment of workers’ compensation benefits but not judgments. The Court of Appeal affirmed, stating that it could not envision a way to separate the judgment from the structured settlement payment rights. (Matthews v. Liberty Assignment Corp. (Cal. App. 5th Dist., May 2, 2016) 247 Cal. App. 4th 71.)  http://www.courts.ca.gov/opinions/documents/F071371.DOC

Attempt To Amend Judgment To Add Additional Debtor “involves a civil procedure game of cat-and-mouse.”

A roofing subcontractor defeated claims against it and obtained prevailing party attorney fees. The trial court denied its motion to amend the attorney fee order to add a general contractor’s insurance company as a judgment debtor. The argument was that the insurance company had prosecuted the claims and, as such, it was the real party in interest liable for the fee award, in that it had also taken an assignment of the general contractor’s contractual indemnity rights. The trial court declined to amend the judgment. In reversing, the Court of Appeal stated that Code of Civil Procedure § 368.5 provides that an action or proceeding may be continued in the name of the original party or “the court may allow the person to whom the transfer is made to be substituted in the action or proceeding.” (Hearn Pacific Corp. v. Second Generation Roofing Inc. (Cal. App. 1st Dist., Div. 2, May 2, 2016) 247 Cal. App. 4th 117.) http://www.courts.ca.gov/opinions/documents/A142203.DOC

Even Though There Was a Valid Arbitration Agreement, It Did Not Apply To The Controversy At Issue.

The plaintiffs allege antitrust claims under the Sherman and Clayton Acts. The arbitration agreement states: “In the event of an objection to the new contractual arrangement, Judge Hogan shall determine whether the proposed new agreement is pro-competitive and if so, it may be approved.” The federal trial court denied defendant’s request to order the matter into arbitration. The Ninth Circuit observed that the Federal Arbitration Act limits a court’s determination to:  (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. In affirming, the Ninth Circuit stated: “Regardless of whether the provision constitutes a valid agreement to arbitrate, Plaintiffs’ claims are not within the scope of [the arbitration provision].” (Boardman v. Pacific Seafood Group (9th Cir., May 3, 2016) 2016 WL 1743350.) https://cdn.ca9.uscourts.gov/datastore/opinions/2016/05/03/15-35257.pdf

Prefiling Requirements For Vexatious Litigants Do Not Apply To Defendant Seeking To Appeal Adverse Judgment.

Without first obtaining leave of the presiding justice or judge, a vexatious litigant is prohibited from filing new litigation pursuant to Cod of Civil Procedure § 391.7(a). The California Supreme Court concluded the prefiling requirements “do not apply to a self-represented litigant previously declared a vexatious litigant seeking to appeal an adverse judgment or interlocutory order in an action where he or she was the defendant. A different interpretation would impede his or her right to access to the appellate courts without advancing the underlying purpose of the vexatious litigant statutes.” (John v. Superior Court (May 5, 2016) 63 Cal. 4th 91.)
http://www.courts.ca.gov/opinions/documents/S222726.DOC

Which Statute of Limitations Applies To Patient Who Fell Out of Bed In Hospital?

A patient had bedrails raised pursuant to her doctor’s order. When she attempted to raise herself up to get out of bed, the latch on the bedrail failed and the rail collapsed, causing her to fall on the floor. She filed an action against the hospital just under two years later. The trial court dismissed after concluding the one-year statute of limitations applies. The Court of Appeal reversed. The Supreme Court, agreeing with the trial court that the one-year statute applies, stated: “Because plaintiff’s injury resulted from alleged negligence in the use and maintenance of equipment needed to implement the doctor’s order concerning her medical treatment, we conclude that plaintiff’s claim sounds in professional, rather than ordinary, negligence. Therefore, as the trial court correctly ruled, the action is governed by the special limitations period in [Code of Civil Procedure] section 340.5 rather than the two-year statute of limitations under section 335.1.” (Flores v. Presbyterian Intercommunity Hospital (May 5, 2016) 63 Cal.4th 75.) http://www.courts.ca.gov/opinions/documents/S209836.DOC

Consequences For Doctor Working Outside Specialty.

A gynecologist performed liposuction and cosmetic surgery in his office, which lacked an EKG machine, pulse monitor, backup oxygen, backup power supply, and a crash cart. The office had a limited supply of drugs to reverse the effects of narcotics and no certified advanced life support personnel, anesthesiologist, or nurse anesthetist. A patient, 61 years old, paid the doctor $100,000 to perform liposuction. When she arrived at the office, an opioid patch was applied to her skin and she was given Lidocaine, Oxycodone, Vicodin, Percocet, Zofran, and Zanax. After 11 hours into the procedure, during which 10,000 cc’s of aspirate were removed, the patient’s breathing was shallow and she was unresponsive. When paramedics arrived, they were delayed because the door was locked. When they gained entry, they found the doctor performing CPR “and blood was everywhere.” The patient was pronounced dead. The coroner concluded the cause of death was “opioid toxicity from the lidocaine, fentanyl and oxycodone she had received.” A jury convicted the doctor of involuntary manslaughter, and the court sentenced him to five years in state prison. The Court of Appeal found that there was substantial evidence to support his conviction. (People v. Mohamed (Cal. App. 2nd Dist., Div. 1, May 3, 2016) 247 Cal. App. 4th 152.) http://www.courts.ca.gov/opinions/documents/B262627.DOC

Determination of Whether Employee Acted Within Scope of Employment Not Limited to Third Party’s Allegations.

Student at a community college sued a community college district and a guidance counselor, alleging sexual assault during counseling services. The community college district refused to defend the counselor, so he paid for his own defense and sued the district seeking indemnity and reimbursement for his defense. After the district settled with the plaintiff in the underlying action without admitting liability, the student dismissed all claims against both the district and the counselor. The district then demurred to the counselor’s complaint, arguing the student’s allegations of sexual assault fell outside the scope of the counselor’s employment as a matter of law. The trial court agreed and sustained the district’s demurrer. In reversing, the Court of Appeal stated: “We agree with the trial court that the sexual assault alleged in the main lawsuit fell outside the scope of [the guidance counselor’s] employment as a matter of law. But under a proper interpretation of [Government Code] section 996.4, the determination of whether an employee acted within the scope of employment is factual and cannot be limited to the third party’s allegations in the underlying lawsuit when the employee denies those allegations, and the employee’s version of events would demonstrate acts within the scope of employment.” (Daza v. Los Angeles Community College District. (Cal. App. 2nd Dist., Div. 8, May 6, 2016) 247 Cal.App.4th 260.) http://www.courts.ca.gov/opinions/documents/B261525.DOC

Labor Code § 1164.9 Held Unconstitutional.

An employee of a farming company asked permission to observe a mandatory mediation and conciliation meeting that was being held between the agricultural employer and a union pursuant to Labor Code § 1164 et seq.The Agricultural Labor Relations Board had ordered the mediation. The Board denied the employee’s request to observe the mediation and issued a broad ruling stating there was no public access to its proceedings. Both the employer and the employee sought judicial declarations there should be public access. The trial court sustained the Board’s demurrer on the ground that Labor Code § 1164.9 limited all judicial review of the Board’s rulings to the Court of Appeal or Supreme Court. The Court of Appeal held that Labor Code § 1164.9 is unconstitutional because it “impermissibly divested the superior court of its original jurisdiction without an adequate constitutional foundation for doing so.” The judgment of dismissal was reversed and the matter was remanded to the superior court. (Gerawan Farming, Inc. v. Agricultural Labor Relations Board (Cal. App. 5th Dist., May 9, 2016) 2016 WL 2732128.) http://www.courts.ca.gov/opinions/documents/F069896.DOC

Law Firm Named as a Doe Defendant Successfully Moves To Quash.

An income beneficiary of a trust filed a petition for relief from breach of trust. In the petition, he named a lawyer who worked in a law firm, but did not name the law firm. Included in the petition was the following allegation: “Petitioner is ignorant of the true names and capacities of the Respondents named herein as Does 1 through 20, inclusive, and therefore names these Respondents by such fictitious names.” The law firm was added as a Doe defendant and the law firm responded with a motion to quash, arguing the law firm’s identity and the facts allegedly giving rise to its liability were known when the original petition was filed, so the court had no jurisdiction over it. The trial court granted the motion to quash. The Court of Appeal affirmed, but stated: “We observe that the order granting the motion to quash does not necessarily end the Firm‘s involvement in this litigation. . . . Appellant is not precluded from amending the petition to join the Firm as a named defendant in its own right and to include causes of action for which the statute of limitations has not run.” (McClatchy v. Coblentz, Patch, Duffy & Bass, LLP (Cal. App. 1st Dist., Div. 5, May 10, 2016) 2016 WL 2982756.) http://www.courts.ca.gov/opinions/documents/A144391.DOC

Antipsychotic Medication Ordered By The Court For A Man Who Does Not Want To Take It.

A criminal defendant’s situation began when he called 9-1-1 because he believed his apartment was wired, people were tracking his movements, controlling his thoughts, and trying to control his behavior. At an E.R., he was diagnosed as psychotic and admitted for a 72-hour hold pursuant to Welfare & Institutions Code § 5150. After he was released from the hospital, he locked himself and his wife in the master bedroom and assaulted her. She called out for the children to call 9-1-1. He was charged with six felony counts. In court, the judge declared a doubt about the man’s competency to stand trial, and a neuropsychologist opined he was, indeed, incompetent and was in need of antipsychotic medication. The court found the man did not have the capacity to consent to antipsychotic medication, and that if he was not given the medication, it was probable that serious harm to his health would result. The court ordered the man should be committed to a state hospital and given the medication. The man did not want to take the medication and appealed. The Court of Appeal noted that the United States Supreme Court in Sell v. United States (2003) 539 U.S. 166 held that the Constitution permits the Government to involuntarily administer antipsychotic drugs to a mentally ill defendant facing serious criminal charges in order to render that defendant competent to stand trial. The trial court’s order was affirmed because the trial court found the man, while he had been charged with serious crimes and was awaiting trial, was also a danger to himself, and the antipsychotic medications were intended to prevent him from hurting himself, as he was having suicidal ideation. (People v. Lameed (Cal. App. 6th Dist., May 11, 2016)
2016 WL 2754342.) http://www.courts.ca.gov/opinions/documents/H042399.DOC

Statute of Limitations for Prenatal Exposure to Toxic Substances.

Plaintiff, age 12, through her mother as guardian ad litem, contends an electronics company is responsible for her birth defects due to her mother’s exposure to toxic substances when she worked for the electronics company while she was pregnant with plaintiff. The trial court granted the electronics company’s motion for summary judgment based on the statute of limitations. The Court of Appeal said it was asked to resolve whether an action alleging personal injuries caused by prenatal exposure to toxic substances is governed by the statute of limitations set forth in Code of Civil Procedure § 340.4, a six-year period applicable to tort actions for birth and prebirth injuries, or § 340.8, a two-year period which may be tolled during a plaintiff’s minority and is applicable to tort actions for exposure to hazardous materials and toxic substances. The appellate court affirmed the grant of summary judgment, stating: “We conclude section 340.4 governs plaintiff’s claims and that her action is time-barred. In so holding, we depart from our colleagues in the Sixth District who concluded that section 340.8 supplants the limitations period of section 340.4 for claims based on prenatal injuries caused by exposure to hazardous materials or toxic substances. (See Nguyen v. Western Digital Corporation (2014) 229 Cal.App.4th 1522 (Nguyen).)” (Lopez v. Sony Electronics, Inc. (Cal. App. 2nd Dist., Div. 8, May 13, 2016) 2016 WL 2864800.)
http://www.courts.ca.gov/opinions/documents/B256792.DOC

Summary Judgment in Favor of Manufacturer Reversed.

Plaintiff alleges he developed breathing difficulties and lung damage as a result of exposure to asbestos while working as a mechanic. He sued defendant as a successor in interest under theories of negligence and strict liability. The trial court granted defendant’s motion for summary judgment. The appeals court noted that 90 to 95% of brake linings contained asbestos during relevant time periods, and then posed the issue here as: “If virtually all brake linings during the relevant time period contained asbestos . . ., did the “intended use of [the] product inevitably create[] a hazardous situation”? The court further noted defendant knew the intended use of its product posed an unreasonable risk of harm, and that during the 1960’s and 1970’s, nonasbestos brake shoes were available. In reversing, the court stated: “Looking at the evidence in the light most favorable to plaintiff, [defendant] was in a position to provide safeguards from this exposure, and thus [defendant] should share liability for injuries resulting from the hazardous condition created by the use of its grinders in the 1950’s and 1960’s.” (Hetzel v. Hennessy Industries, Inc. (Cal. App. 1st Dist., Div. 1, May 17, 2016) 2016 WL 3004412.) http://www.courts.ca.gov/opinions/documents/A144218.DOC

Alleged Facts of Wrongful Foreclosure Sufficient to State A Cause of Action; No Further Allegations of Facts Showing Prejudice Necessary.

In Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, the California Supreme Court held that in a case where a homeowner alleges a nonjudicial foreclosure sale was wrongful because of a void assignment, the homeowner has standing to sue for wrongful foreclosure. However, Yvanova did not address prejudice as an element of wrongful foreclosure. In the present action, the Court of Appeal stated and held:  “Where a homeowner alleges foreclosure by one with no right to do so, do such allegations alone establish the requisite prejudice or harm necessary to state a cause of action for wrongful foreclosure? Or instead, to adequately plead prejudice, does the plaintiff-homeowner have to allege the wrongful foreclosure interfered with his or her ability to pay on the debt, or lead to a foreclosure that would not have otherwise occurred? . . . [W]e conclude that a homeowner who has been foreclosed on by one with no right to do so—by those facts alone—sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure. When a non-debtholder forecloses, a homeowner is harmed by losing her home to an entity with no legal right to take it.”  (Sciarratta v. U.S. Bank National Association (Cal. App. 4th Dist., Div. 1, May 18, 2016) 2016 WL 2941194.) http://www.courts.ca.gov/opinions/documents/D069439.DOC

It's Not Easy To Show You Didn’t Stipulate To A Commissioner.

After participating in a three-hour hearing, a man appealed from a domestic violence restraining order, contending he did not stipulate to a commissioner to hear the matter. In affirming the order, the Court of Appeal stated the man “has the burden to affirmatively show there was no written or oral stipulation to allow the commissioner to hear the matter,” and, “[b]y the parties’ conduct evincing their common intent to allow the subordinate officer conduct proceedings that can [be] done only by a judge, their agreement to allow the subordinate officer to resolve the matter is implied.” After noting the appellant did not include a court reporter’s transcript in the appellate record, the court stated: “If the invalidity does not appear on the face of the record, it will be presumed that what ought to have been done was not only done but rightly done.” (Elena S. v. Kroutik (Cal. App. 4th Dist., Div. 1, May 18, 2016) 2016 WL 2943411.) http://www.courts.ca.gov/opinions/documents/D068831.DOC

Substantial Caretaking or Custodial Relationship Required to Prove Neglect Under Elder Abuse Statutes.

The daughters of a woman who had lower extremity vascular disease brought an elder abuse action against defendant doctor. Their mother was seen by defendant doctor on an outpatient basis numerous times. The doctor prescribed a topical cream and special shoes, but did not refer her to a specialist, even after noting no pulse could be felt in her feet. The day after the doctor noted she had suffered abnormal weight loss, the woman was admitted to the hospital with symptoms consistent with gangrene, and her right leg was amputated. A few months later, she was again hospitalized for blood poisoning and died. The California Supreme Court was asked to determine whether the definition of neglect under the Elder Abuse and Dependent Adult Civil Protection Act [Welf. & Inst. Code § 15600 et seq.] applies when a health care provider who was delivering care on an outpatient basis failed to refer an elder patient to a specialist. California’s high court ruled: “What we conclude is that the Act does not apply unless the defendant health care provider had a substantial caretaking or custodial relationship, involving ongoing responsibility for one or more basic needs, with the elder patient. It is the nature of the elder or dependent adult‘s relationship with the defendant –– not the defendant‘s professional standing –– that makes the defendant potentially liable for neglect. Because defendants did not have a caretaking or custodial relationship with the decedent, we find that plaintiffs cannot adequately allege neglect under the Elder Abuse Act.” (Winn v. Pioneer Medical Group, Inc. (Cal. May 19, 2016) 2016 WL 2941968.)

Summary Judgment Reversed in Case Against School District.

The trial court granted summary judgment in a case brought by a 14-year-old middle school student against a school district. Students received permission from a teacher to use an unoccupied classroom to practice for a talent show. The boy was seriously injured in the unsupervised classroom when he and others were practicing break dancing and he did a flip. Viewing the situation in a light most favorable to the plaintiff, the Court of Appeal reversed. The court found there were triable issues of fact: whether the district increased the risks of harm to plaintiff by not supervising the practice; whether the teacher would have permitted the students to use the classroom to practice without supervision had the rules regarding supervision been properly communicated; and whether the school had sufficiently disseminated its rule against performing flips.  (Jimenez v. Roseville City School District (Cal. App. Cal App. 3rd Dist., May 19, 2016) 2016 WL 3029540.) http://www.courts.ca.gov/opinions/documents/C075366.DOC 

30 Years After Conviction and Death Sentence, Conviction Overturned.

In Batson v. Kentucky (1986) 476 U.S. 79, the United States Supreme Court held the Equal Protection Clause of the Fourteenth Amendment forbids prosecutors from challenging potential jurors solely on account of their race. In the current case, a black man was convicted of murder and sentenced to death in Georgia in 1986. During jury selection at his trial, the prosecutor exercised peremptory challenges against all four black perspective jurors qualified to serve. The trial court and the Georgia Supreme Court rejected the man’s claim that the prosecutor acted in violation of Batson v. Kentucky. The man filed a petition for habeas corpus, and while that proceeding was pending, he obtained from the State of Georgia copies of the file used by the prosecution during his trial, through the Georgia Open Records Act. The file contained copies of the jury list on which the names of each black prospective juror was highlighted in bright green, with a legend indicating that the highlighting represents black persons. A notation stated: “If it comes down to having to pick one of the black jurors, [this one] might be okay.” Questionnaires filled out by five prospective black jurors, on which each indicated his or her race had been circled. The United States Supreme Court determined “prosecutors were motivated in substantial part by race” when they struck some of the black jurors from the panel. The man’s conviction was reversed and remanded for a new trial. (Foster v. Chatman (U.S. May 23, 2016) 2016 WL 2945233.) http://www.supremecourt.gov/opinions/15pdf/14-8349_6k47.pdf

Sophisticated Intermediary Doctrine.

Plaintiff was diagnosed with mesothelioma, a fatal cancer caused by inhalation of asbestos fibers. At the close of plaintiff’s case, defendant moved for nonsuit, contending it discharged its duty to warn about the hazards of the asbestos it sold when it warned the sophisticated purchaser about the health risks of asbestos. The trial court deferred ruling, and the jury returned a verdict finding defendant liable for failure to warn and negligence. Thereafter, the trial court granted defendant’s nonsuit and directed verdict motions, after construing them to be motions seeking judgment notwithstanding the verdict [JNOV]. A divided Court of Appeal reversed the trial court’s grant of JNOV because substantial evidence demonstrated defendant breached its duty to warn downstream users about the risks of asbestos exposure. The California Supreme Court agreed with the Court of Appeal, also finding entry of JNOV was unjustified, and holding: “When a hazardous raw material is supplied for any purpose, including the manufacture of a finished product, the supplier has a duty to warn about the material’s dangers. Under the sophisticated intermediary doctrine, the supplier can discharge this duty if it conveys adequate warnings to the material’s purchaser, or sells to a sufficiently sophisticated purchaser, and reasonably relies on the purchaser to convey adequate warnings to others, including those who encounter the material in a finished product.” (Webb v. Special Electric Co., Inc. (May 23, 2016) 2016 WL 2956882.) http://www.courts.ca.gov/opinions/documents/S209927.DOC

Unity of Interest Exception Regarding Prevailing Party Determination No Longer Applies.

Code of Civil Procedure §1032 gives a “prevailing party” the right to recover its litigation costs. It is undisputed defendant meets § 1032’s definition of a prevailing party. Plaintiffs contend the trial court erred in awarding defendant costs because she was united in interest and shared costs with other defendants who did not satisfy the statutory definition. In support, plaintiffs rely on cases applying the so-called unity of interest exception, which provides a trial court with discretion to deny prevailing party status to a defendant who otherwise would be entitled to recover costs as a matter of right when that defendant is united in interest with, and asserted the same defenses in the same answer as, other defendants who did not prevail and are not entitled to recover their costs. The Court of Appeal concluded the unity of interest cases are no longer controlling because they related to the former repealed language of § 1032, and therefore affirmed the trial court’s determination that defendant was a prevailing party entitled to recover costs as a matter of right. The appellate court further stated: “We therefore conclude the Legislature intended to eliminate the unity of interest exception as a basis for denying a prevailing party the right to recover costs. Although most of the appellate cases on which Plaintiffs rely postdate the repeal and reenactment of section 1032, we do not find these cases persuasive because none of them explain how the unity of interest exception survived the Legislature’s actions.” (Charton v. Harkey (Cal. App. 4th Dist., Div. 3, May 24, 2016) 2016 WL 2994747.) http://www.courts.ca.gov/opinions/documents/G050514.DOC

Mandatory Attorney Fee Arbitration.

Attorney and clients participated in arbitration pursuant to Business & Professions Code § 6200 et seq. The arbitrator concluded the legal services provided were valued at the amount the clients already paid. However, the arbitrator erred in stating the amount of the fees already paid, and when the error was brought to his attention, he declined to change or correct the award. Also, after the arbitration concluded, the attorney discovered the arbitrator was in the business of auditing attorney bills and had written extensively about attorney overbilling. The trial court declined to vacate the award, and the Court of Appeal affirmed. With regard to the arbitrator’s clear error, the Court of Appeal stated:  “While it is understandably frustrating for [the attorney] that the arbitrator’s decision was based on demonstrably flawed reasoning, we are not authorized to vacate the award for that reason.” As to the arbitrator’s alleged failure to disclose, the appellate court stated: “The type of information [the attorney] contends [the arbitrator] was required to disclose—essentially, his experience in auditing attorney bills and his attitude toward proper methods of billing—is just the type of information that Haworth [v. Superior Court (2010) 50 Cal.4th 372] holds is not within the arbitrator’s duty of disclosure.” (Baxter v. Bock (Cal. App. 1st Dist., Div. 1, May 24, 2016) 2016 WL 2995535.) http://www.courts.ca.gov/opinions/documents/A142372.DOC

Statute of Limitations in Church Abuse Case.

Insurance Code § 11583 tolls the statute of limitations period once a person makes an “advance payment or partial payment of damages” unless he notifies the recipient of the applicable statute of limitations or until the recipient hires a lawyer. In this case, a monsignor in the Catholic Church allegedly molested two teenage boys, who are now in their 50’s. During the period of time they were molested, the monsignor lavished them with meals, clothes, travel and money. In this case, the victims contend those gifts amounted to an advance payment or partial payment of damages so as to toll the statute of limitations. The trial court sustained the demurrer of the Church. The Court of Appeal agreed with the trial court, stating: “We conclude that [the meals, clothes, travel and money] did not [toll the statute of limitations], to the extent those gifts were not solely to compensate for past sexual abuse but were also to facilitate criminal conduct such as ‘grooming’ the boys for further sexual abuse or encouraging the boys not to report the past abuse they suffered.” Nonetheless, the appellate court reversed and remanded to give the plaintiffs an opportunity to amend their complaint “to allege whether there were any solely compensatory payments made while the statute of limitations period had yet to expire.” (Doe v. Roman Catholic Archbishop of Los Angeles (Cal. App. 2nd Dist., Div. 2, May 26, 2016) 2016 WL 3034674.) http://www.courts.ca.gov/opinions/documents/B264947.DOC

Agreement to Arbitrate Contract, But Not Tort Claims.

Plaintiffs sued a lawyer for legal malpractice. Pursuant to a written agreement to arbitrate [“Except as otherwise provided in this Agreement, any controversy between the parties arising out of this Agreement shall be submitted to the American Arbitration Association for arbitration in Los Angeles, California”], the trial court ordered the matter to arbitration. The arbitrator ruled in favor of plaintiffs, and the lawyer appealed. The Court of Appeal affirmed the trial court’s ordering the contractual claims into arbitration, but found the arbitration provision did not encompass tort claims. The judgment was reversed with respect to the claims for legal malpractice, breach of fiduciary duty, and rescission. (Rice v. Downs (Cal. App. 2nd Dist., Div. 1, June 1, 2016) 2016 WL 3085995.) http://www.courts.ca.gov/opinions/documents/B261860.DOC

Primary Assumption of Risk.

A father and his two sons were skateboarding downhill in a resort area without helmets. The skateboard of one of the boys hit a small gap between the paved road and a cement collar surrounding a manhole cover. The boy was ejected from his skateboard, suffered a brain injury and later died. The family brought a wrongful death action against various entities, including a water district responsible for inspecting and maintaining the manhole cover, a community association, and the owner of the road. The trial court granted defendants’ motion for summary judgment, concluding the doctrine of primary assumption of the risk barred plaintiffs’ lawsuit as a matter of law. In affirming, the Court of Appeal stated the inherent risk of injury while cruising down a hill on a skateboard is precisely what materialized the morning of the accident and resulted in the tragic death. (Bertsch v. Mammoth Community Water District (Cal. App. 3rd Dist., June 1, 2016) http://www.courts.ca.gov/opinions/documents/C076872.DOC

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