Untitled Document

Litigation Update

Litigation Section News: March 2015

Senior Editor
Eileen C. Moore, Associate Justice
California Court of Appeal, Fourth District

Managing Editor
Mark A. Mellor, Esq.

Table of Contents of This Issue

Stop Bothering Our Customers.

Plaintiff owns an outdoor shopping center with 60 retail stores, and has a policy of prohibiting solicitation of donations on shopping center property. Defendants, who provided evidence they operate youth centers outside the county, were repeatedly soliciting donations on the sidewalk areas immediately adjacent to store entrances. The police refused to intervene, and the shopping center asked the court to issue a preliminary injunction ordering defendants to cease trespassing. The trial court issued the injunction. On appeal, the appellate court noted that as a general rule, landowners and tenants have a right to exclude persons from trespassing on private property. Citing Robins v. Pruneyard Shopping Center (1979) 23 Cal.3d 899, [153 Cal.Rptr. 854, 592 P.2d 341] and Ralph’s Grocery Co. v. United Food & Commercial Workers (2012) 55 Cal.4th 1083, [150 Cal. Rptr.3d 501, 290 P.3d 1116], the appellate court stated that a shopping center may constitute a public forum because of its public character and that it is an important place for large groups of citizens to congregate, and that for constitutionally-protected freedom of speech in a public forum protection to apply, it must be in a place within the shopping center designed in a way that induces shoppers to congregate for entertainment, relaxation and conversation. In affirming the trial court’s grant of injunction in favor of the shopping center, the appellate court held that entrances and exits to individual stores are not public forums. (Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (Cal. App. Fifth Dist.; December 12, 2014) 232 Cal.App.4th 1171, [181 Cal.Rptr.3d 577].)

Create Your Member Profile. On-line My State Bar Profile allows you to access the Litigation Section’s members only area, update your contact information, pay your dues online, and more. To set up your account, go to calbar.ca.gov/members. Link to My State Bar Profile "Only Noneconomic Damages Awarded By The Court Are Actually Capped;" Settlement Didn’t Count Toward MICRA's $250,000 Limitation.

The California Supreme Court considered whether a jury's award of noneconomic damages, reduced by the court to $250,000 under Civil Code section 3333.2 [MICRA], may be further reduced by setting off the amount of a pretrial settlement attributable to noneconomic losses, even when the defendant who went to trial failed to establish any comparative fault of the settling defendant. In agreeing with the trial judge, who refused to further reduce the award of noneconomic damages, and disagreeing with the Court of Appeal, who ordered a reduction, the Supreme Court stated: "Neither the text nor the history of section 3333.2 reflects such an intent. Rather, the Legislature sought to address the problem of unpredictable jury awards. The limitation on noneconomic damages restrains settlements indirectly, by providing a firm ceiling on potential liability as a basis for negotiation. Only noneconomic damages awarded by the court are actually capped." (Rashidi v. Moser (Cal. Sup. Ct.; December 15, 2014) 60 Cal.4th 718, [181 Cal.Rptr.3d 59, 339 P.3d 344].)

Equitable Principles May Be Applied To Give Priority To An Earlier Unperfected Security Interest.

The facts here are complicated and lengthy, so they will not be set forth here. Suffice it to say, the appellate court pointed out that Commercial Code section 9310(a) provides that a financing statement must be filed to perfect all security interests and that Commercial Code section 9322(a) (2) further provides a perfected security interest has priority over a conflicting unperfected security interest. The Court of Appeal went on to hold: “Although the code reflects the Legislature’s intention to create a simplified, clear and uniform means of prioritizing security interests, there are circumstances when the letter of the law yields to the principles of equity and the spirit of justice. Here we hold that if a perfected security interest is created by breaching a fiduciary duty owed to another person, then equitable principles may be applied to give priority to an earlier unperfected security interest.” (Feresi v. The Livery, LLC (Cal. App. Second Dist., Div. 6; December 15, 2014) (As mod., January 8, 2015) 232 Cal. App.4th 419, [182 Cal.Rptr.3d 169].)

The Cost Is Different For You.

A man with no medical insurance signed an agreement to pay a hospital’s full charges when he received emergency care at a hospital. He later filed a consumer class action asserting claims under Business and Professions Code section 17200 and Civil Code section 1750. His complaint alleges the hospital “failed to disclose uninsured patients would be required to pay several times more than other patients receiving the same services, the charges set forth on the invoice were not readily available, or discernable from the agreement, and the invoiced charges exceeded the reasonable value of the services.” The trial court sustained the hospital’s demurrer without leave to amend. Finding the patient has standing to sue and adequately alleged an injury in fact, the appellate court reversed. (Sarun v. Dignity Health (Cal. App. Second Dist., Div. 7; December 15, 2014) (As mod., January 13, 2015) 232 Cal.App.4th 1159, [181 Cal.Rptr.3d 545].)

Trial Court Erred In Applying The Doctrine Of Substantial Compliance To Consumer Protection Laws.

Civil Code section 2987, subdivision (d), subsection (2)(B), requires that lessors of vehicles which have been repossessed give the lessees a notice that contains this statement: “The amount you owe for early termination will be no more than the difference between the Gross Early Termination Amount stated above and (1) the appraised value of the vehicle or (2) if there is no appraisal, either the price received for the vehicle upon disposition or a greater amount established by the lessor or the lease contract. You have the right to get a professional appraisal to establish the value of the vehicle for the purpose of figuring how much you own on the lease.” If the notice is not given, a lessee is not liable for any deficiency. The notice sent to the plaintiff did not contain all of the required statutory language. Plaintiff filed a complaint against defendant alleging she represented a class of lessees to whom defendant sent the defective notice, and that defendant’s attempts to collect deficiencies violated Civil Code section 1788 et seq. [the Rosenthal Act] and Business and Professions Code section 17200 [Unfair Competition Law]. The court sustained defendant’s demurrer without leave to amend. On appeal, plaintiff argued the trial court erred by applying the doctrine of substantial compliance to consumer protection laws. In reversing, the appellate court stated: “Although the doctrine of substantial compliance has been employed when doing so avoids injustice and is consistent with the purposes of a particular statute, those considerations are not present here, where [defendant] failed to provide consumers with notice of their right to an appraisal upon early termination of their automobile leases in the language prescribed by Civil Code section 2987.” (Flannery v. VW Credit, Inc. (Cal. App. Fourth Dist., Div. 1; December 17, 2014) 232 Cal.App.4th 606, [181 Cal.Rptr.3d 589].)

CEB Benefits for Litigation Section Members.
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        Special discounts to members working for legal services organizations.
        10% discount for Section members on continuing ed programs cosponsored by the CEB and the Section. See ceb.com/litigationsection for additional details. Link to Litigation Section page on CEB site Filing A Complaint Relieves A Party From Proving The Other Party Refused To Arbitrate.

Two businesses entered into an agreement which provided that disputes would be subject to arbitration. Plaintiff sued defendant, and defendant moved to compel arbitration. Under Code of Civil Procedure section 1281.2, a party requesting arbitration must prove the other party refused to arbitrate the controversy. The trial court denied the motion to compel on the ground defendant failed to allege it demanded arbitration and plaintiff refused. In reversing, the appellate court stated: "We hold that [defendant] was not required to make a formal demand for arbitration because [plaintiff]'s filing of a complaint invoked the protections and procedures of the court system, and thus, was an effective refusal of arbitration. [Defendant] met its burden under section 1281.2." (Hyundai Amco America, Inc. v. S3H, Inc. (Cal. App. Fourth Dist., Div. 3; December 17, 2014) 232 Cal.App.4th 572, [181 Cal.Rptr.3d 470].)

Superior Court's Order Vacating Partial Award Of Arbitrator Not Yet Appealable Because Not Final.

Plaintiff brought a private attorney general action [PAGA] alleging various employment related issues on behalf of herself and other aggrieved employees. In a separate action, filed as a class action, she alleged similar employment claims on behalf of herself and class members. The trial court declared the two actions as being related actions, but did not order them consolidated. The trial court granted defendants’ petition to compel arbitration and stay proceedings in the individual/PAGA action, concluding the FAA governed the arbitration agreement and that plaintiff’s “employment-related claims” and her “individual PAGA claims” were covered by the arbitration agreement. The court also granted defendants’ petition in the class action to compel arbitration and stay proceedings “only as to Plaintiff’s individual claims,” again concluding that the FAA applied. Both cases proceeded to arbitration. The arbitrator decided both of plaintiff’s actions, including her representative and class claims, were subject to arbitration. The arbitrator proceeded to make a “partial final award,” and defendants successfully moved for vacation of the “partial final award” in the trial court. Plaintiff appealed the order vacating the “partial final award.” The Court of Appeal dismissed the appeal, holding the partial award was not appealable because the arbitrator had not yet ruled on any of the substantive issues in arbitration. (Judge v. Nijjar Realty, Inc. (Cal. App. Second Dist., Div. 7; December 17, 2014) 232 Cal.App.4th 619, [181 Cal.Rptr.3d 622].)

Denial Of Motion To Stay Proceedings Pending Arbitration Is Not An Appealable Order.

Defendant filed a motion to stay proceedings in the superior court pending arbitration, and the trial court denied the motion. Defendant appealed, and the Court of Appeal dismissed the appeal, stating: “[T]he trial court’s denial of the stay motion unaccompanied by any motion or petition to compel arbitration or a pending arbitration is not an appealable order.” (Wells Fargo Bank, N.A. v. The Best Service Co., Inc. (Cal. App. Second Dist., Div. 5; December 17, 2014) 232 Cal.App.4th 650, [181 Cal.Rptr.3d 597].)

You Call It Human Rights Abuses; I Call It A Political Question. Let’s Call The Whole Thing Off.

An internal struggle in Colombia has been ongoing since the 1960’s involving guerrilla forces trying to overpower the Colombian government. In 1986, oil extraction of one of the largest oil fields in the country began, and the first 110 miles of pipeline ran through especially volatile guerrilla territory. In 2002, because of Colombia’s inability to secure the pipeline on its own and its importance to U.S. energy security, the U.S. created a $99 million aid program to secure the pipeline. In 2004, after both the U.S. and Occidental Petroleum’s Colombian subsidiary provided funding for government troops, the troops murdered three union leaders not far from the pipeline. Seven years later, plaintiffs, family members of the slain workers, filed suit against Occidental Petroleum in federal court in California under 28 U.S.C. § 1350 [Alien Tort Statute], claiming Occidental hired the troops, fully aware of their human rights abuses. Both the federal trial and appeals courts concluded Occidental’s partial funding of the pipeline security program is inextricably bound to an inherently political question of the United States and thus, was nonjusticiable [not capable of being decided under legal principles]. (Marina v. Occidental Petroleum Corporation (Ninth Cir.; December 15, 2014) 774 F.3d 544.)

Deed Altered, Omitting Plaintiff’s Name, But She Still Loses Quiet Title Action.

In her quiet title action, plaintiff alleges she pooled her $150,000 with two entities in partnership for the purchase of a residential property at a foreclosure auction for the purchase price of $250,000. In the original version of the trustee’s deed, it stated that one of the entities had a 75 percent and the other a 25 percent ownership interest in the property, but it also named plaintiff as a grantee without any stated percentage interest in the property. The trustee’s deed that was executed and recorded omitted plaintiff’s name. Without plaintiff’s knowledge, one of the entities quitclaimed the property to the other, who then sold the property. The buyer of the property is the defendant in the present quiet title action. The trial judge sustained defendant’s demurrer without leave to amend. In affirming, the appellate court held “the alteration of the deed to omit [plaintiff’s] name was not material because the original version of the deed showed she had no interest in the property.” (Lin v. Coronado (Cal. App. Second Dist., Div. 5; December 18, 2014) 232 Cal.App.4th 696, [181 Cal.Rptr.3d 674].)

Law Partner Added As A Judgment Debtor After Multi-Million-Dollar Verdict Against Firm.

After practicing law together for 14 years, two lawyers parted. One of the lawyers sued the other as well as their former firm. The issue, of course, was money. The trial court granted a directed verdict in favor of the individual lawyer defendant. A jury returned a multi-million-dollar verdict. Thereafter, the plaintiff filed a motion to amend the judgment to include the individual lawyer defendant as a judgment debtor, arguing: “The jury found that, when he terminated [plaintiff], [the individual lawyer defendant] knew that the firm owed [plaintiff] more than $2 million. Nonetheless, at every opportunity [the individual lawyer defendant] drew out as personal distributions all the firm’s available funds without reserving any amounts to satisfy the debt he knew was owed to [plaintiff]. When [the individual lawyer defendant] reached the limits on the checks he could write to himself, [the individual lawyer defendant] began writing checks to others for his personal benefit, dropping the pretense that the sums were earned as ‘salary.’ Thus, in a concerted effort to wring from the firm every last dollar, he wrote firm checks to others to: build and furnish for him and his wife a luxury ranch in Idaho; buy expensive vintage cars here and abroad in furtherance of his racing hobby; buy fine wine, entertainment systems, and clothes; pay taxes and insurance on his home in San Francisco; fly around on private jets, take ski vacations, and travel to rugby matches; pay for vacations and shopping sprees for his current spouse; and fund his personal trust, and retirement accounts, and pay the living expenses of various family members. By the time of the verdict, [the individual lawyer defendant] had largely gutted the firm.” The appellate court stated: “The sole issue presented is whether the trial court here abused its discretion by amending a judgment against a dissolving law firm by adding a former name partner of that firm as an additional judgment debtor. We conclude not.” The appellate court’s reasoning included a discussion of the original Field Code provisions enacted in 1872; the court stated that buried in the opaque language of the 1872’s Code of Civil Procedure section 187 “is the power of a trial court to amend a judgment by adding judgment debtors.”(Danko v. O’Reilly (Cal. App. Second Dist., Div. 5; December 18, 2014) 232 Cal.App.4th 732, [181 Cal.Rptr.3d 304].)

Trial Court Erred When It Did Not Order All Claims, Even Those For Injunctive Relief, Into Arbitration.

Credit card holder sued Citibank under Business and Professions Code section 17200 for unfair competition and false advertising over an insurance plan she purchased to protect her Citibank credit card account. The trial court granted Citibank’s petition to compel arbitration on the claims for money damages and restitution, but denied the petition on the injunctive relief claims. The appellate court reversed and remanded for the trial court to order all the claims into arbitration, stating: “[W]e join several federal court decisions in concluding the Federal Arbitration Act (9 U.S.C. § 1 et seq.; hereinafter FAA) preempts the Broughton-Cruz, [Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, [90 Cal.Rptr.2d 334, 988 P.2d 67]] rule. In AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___, [131 S.Ct. 1740, 179 L.Ed.2d 742], (AT&T Mobility), the United States Supreme Court unmistakably declared the FAA preempts all state-law rules that prohibit arbitration of a particular type of claim because an outright ban, no matter how laudable the purpose, interferes with the FAA’s objective of enforcing arbitration agreements according to their terms. The Broughton-Cruz rule falls prey to AT&T Mobility’s sweeping directive because it is a state-law rule that prohibits arbitration of UCL, FAL, and CLRA injunctive relief claims brought for the public’s benefit.” (McGill v. Citibank, N.A. (Cal. App. Fourth Dist., Div. 3; December 18, 2014) 232 Cal. App.4th 753, [181 Cal.Rptr.3d 494].)

Suspended Corporation Could Not Have Its Cake And Eat It Too.

After a man left his employment at a retirement home, he filed a claim with the Labor Commissioner, who awarded him $131,096.77 for unpaid wages. The retirement home appealed the Labor Commissioner's order to the Superior Court, posting an undertaking. The man moved to dismiss the appeal, arguing the retirement home lacked the capacity to appeal because it was a suspended corporation. Instead of releasing the undertaking to the man after the retirement home failed to pay, the court released the money to the retirement home, analyzing it lacked the jurisdiction to accept the money in the first place. The Court of Appeal reversed and ordered the lower court to release the money to the man, finding the retirement home could have revived its corporate powers, but chose not to do so. (Tabarrejo v. Sup. Ct. (Princess Retirement Homes) (Cal. App. Sixth Dist.; December 18, 2014) 232 Cal.App.4th 849, [182 Cal.Rptr.3d 30].)

Not Everything In Mediation Is Confidential.

Husband and wife resolved their marital dissolution in mediation after exchanging financial disclosure declarations. Shortly after entry of judgment, the husband sold a company, which he listed on his financial disclosure document of having a value of $10 million, for $75 million. The wife moved to set aside the judgment on grounds of fraud and duress, and the husband refused to respond to discovery conducted in connection with the set-aside motion, asserting the information he provided during the mediation was confidential. The trial court denied the wife’s motion to compel discovery on grounds of mediation confidentiality. The appellate court granted the wife’s petition for writ of mandate, agreeing with the wife that the financial disclosure documents were necessarily prepared in compliance with the Family Code's statutory mandate. (Lappe v. Sup. Ct. (Murray Lappe) (Cal. App. Second Dist., Div. 5; December 19, 2014) 232 Cal.App.4th 774, [181 Cal.Rptr.3d 510].)

Masthead. Senior Editor: Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District. Managing Editor: Mark A. Mellor, Esq.. Executive Committee: Carol D. Kuluva, Chair; Reuben A. Ginsburg, Vice-Chair; Kathleen Brewer,Treasurer; Robert Bodzin, Immediate Past Chair; Megan A. Lewis, Secretary. Members: Bruce P. Austin; Cynthia Elkins; Terrance James Evans; J. Thomas Greene; Jewell J. Hargleroad; Susan Kay Horst; Kevin J. Kelly; Karen J. Petrulakis;  Edward A. Torpoco; Klnh-Luan Tran; George Walles. Judicial Advisors: Hon. Suzanne Bolanos; Justice Victoria Chaney; Hon. Lawrence W. Crispo (Ret.); Hon. M. Lynn Duryee; Hon. Elizabeth Feffer; Hon. Terry B. Friedman; Hon. J. Richard Haden (Ret.); Hon. Jamie A. Jacobs-May; Justice Eileen Moore; Hon. Ronald S. Prager; Hon. John L. Segal; Hon. James L. Warren (Ret.). Advisors: Donald Barber; Charles V. Berwanger: Paul S. Chan; Tanja L. Darrow; Elizabeth A. England; David P. Enzminger; Michael D. Fabiano; Terry Barton Friedman; Michael A. Geibelson; Ruth V. Glick; Kevin J. Holl; Jamie A. Jacobs-May; Joel Kleinberg; Mark A. Mellor; Eileen C. Moore; Bradley A. Patterson; Norm Rodich; Jerome Sapiro, Jr.; e. robert (bob) wallach; Joan Wolff; Herb Yanowitz. Board of Trustees Liaisons: Daniel Dean (District 1); Craig Holden and Mark Shem (District 6); David J. Pasternak, Board Liaison. Section Coordinator: Mitch Wood, 415-538-2594, mitch.wood@calbar.ca.gov. Administrative Assistant: Ana Castillo, 415-538-2071, ana.castillo@calbar.ca.govDismissal Of Action Ordered Vacated So Defendant May Seek Attorney Fees.

A plaintiff may dismiss an action without prejudice prior to trial and there is no prevailing party for purposes of awarding attorney fees under Civil Code section 1717. But in the present case, while there was indeed a contract which provided for an award of attorney fees to the prevailing party, the complaint also alleged the action was "ancillary to" an arbitration. The superior court action was stayed pending arbitration. After an interim arbitration award in favor of defendants, plaintiff dismissed the superior court action. Thereafter, defendant moved in superior court to set aside the dismissal for purposes of recovering prevailing party attorney fees in the superior court action. Reasoning the arbitration was a separate proceeding and the dismissal of the superior court action was prior to the commencement of trial, the trial judgment declined to set aside the dismissal. The appellate court reversed because the arbitration and the lawsuit were based on the same causes of action and differed only in the remedies sought. (Mesa Shopping Center-East, LLC v. Hill (Cal. App. Fourth Dist., Div. 3; December 23, 2014) 232 Cal.App.4th 890, [181 Cal.Rptr.3d 791].)

No Showing Electronic Signature Was That Of Plaintiff, So Motion To Compel Arbitration Denied.

In a class action wage and hour action, the trial court denied defendant's petition to compel arbitration, implicitly finding defendant did not present evidence to support its claim there was an arbitration agreement. At the hearing, defendant asserted plaintiff electronically signed a 2011 arbitration agreement, but did not explain how it verified there was such a signature. Plaintiff conceded he may have signed an agreement, but was uncertain. In affirming, the appellate court noted that Civil Code section 1633.9 describes how to show that an electronic signature is attributable to a particular person. (Ruiz v. Moss Bros. Auto Group, Inc. (Cal. App. Fourth Dist., Div. 2; December 23, 2014) 232 Cal.App.4th 836, [181 Cal.Rptr.3d 781].)

Printed Name At The Bottom Of An Email Not Enough To Show There Was A Settlement.

Plaintiffs filed a motion pursuant of Code of Civil Procedure section 664.6, to enforce a settlement. In concluding there was a settlement, the trial court found e-mails coupled with a voice mail qualified as an electronic signature under the Uniform Electronic Transactions Act [Civil Code section 1633.1, et seq.; UETA]. The Court of Appeal reversed, concluding one party’s printed name at the bottom on one among many emails did not qualify under either Code of Civil Procedure section 664.6, or Civil Code section 1633.7, to effectuate a settlement. (J.B.B. Investment Partners, Ltd. v. Fair (Cal. App. First Dist., Div. 2; December 5, 2014) 232 Cal.App.4th 974, [182 Cal.Rptr.3d 154].)

The Law Changed After The Demurrer Was Sustained But Before The Appeal Was Heard.

The director of a clinical laboratory informed executive staff and owners of the lab that there were numerous violations of state and federal laws in the lab’s operations. The director was terminated, and thereafter, filed suit alleging violation of Labor Code section 1102.5. The trial court sustained defendants’ demurrer because the plaintiff did not exhaust administrative remedies prior to filing an action in superior court. After judgment was entered and plaintiff’s appeal was filed, the Legislature enacted Labor Code section 244(a), and amended Labor Code section 98.7, which provide that an individual is not required to exhaust administrative remedies. After giving the parties an opportunity to file briefs, the Court of Appeal reversed the judgment, stating: "We conclude that because the amendments merely clarified existing law, they may be applied to this case without transgressing the general rule against the retroactive application of statutes." (Satyadi v. West Contra Costa Healthcare Dist. (Cal. App. First Dist., Div. 5; December 31, 2014) 232 Cal.App.4th 1022, [182 Cal.Rptr.3d 21].)

Defendant Waived Arbitration By Propounding Discovery.

In a wage and hour case filed as a class action, instead of petitioning for arbitration outright, the employer defendant answered the complaint, asserting the plaintiff’s claims were subject to arbitration. The defendant proceeded to both respond to plaintiff's discovery and propound discovery of its own. The parties then agreed to stay discovery for the purpose of discussing settlement. After settlement discussions failed, discovery continued and plaintiff sought to amend his complaint. At that point, defendant petitioned to compel arbitration. The trial court’s order stated: “Defendant waived the right to arbitrate by propounding and responding to class discovery. Finding substantial evidence to support the trial court’s ruling, the appellate court affirmed. (Bower v. Inter-Con Security Systems, Inc. (Cal. App. First Dist., Div. 3; December 31, 2014) 232 Cal.App.4th 1035, [181 Cal.Rptr.3d 729].)

Motion For Class Certification Denied.

The trial court denied class certification in a wage and hour case, and the appellate court, finding no abuse of discretion, affirmed. The crux of the analysis was that the employer had express written policies regarding work and meal breaks, but that some managers imposed uncompensated-for duties to be followed by the employees during their breaks. The Court of Appeal agreed with the trial court that there was evidence the policies in fact varied and were anything but uniform, thus, making the case difficult to manage as a class action. (Koval v. Pacific Bell Telephone Co. (Cal. App. First Dist., Div. 1; December 31, 2014) 232 Cal.App.4th 1050, [181 Cal.Rptr.3d 805].)

It's Not Nice To Fool The State Bar.

A lawyer affirmed she had satisfied compliance with her Minimum Continuing Legal Education [MCLE] requirements when in fact she had not. Caught in the net of a random audit, the lawyer said she was previously mistaken and corrected the error. The Office of the Chief Trial Counsel [OCTC] of the State Bar charged the lawyer with committing an act of moral turpitude by making an intentional misrepresentation, or by gross negligence. The hearing officer found her culpable based on gross negligence and recommended a stayed suspension and probation. The OCTC appealed, seeking a 30-day actual suspension. The Review Department of the California State Bar ordered public reproval because the lawyer "poses no threat to the public, nor is a suspension or probation necessary to reinforce her understanding of her future ethical obligations." (In the Matter of Anna Christina Yee (Filed, May 21, 2014; Published, January 5, 2015) Case No. 12-O-13204.)

Former Football Players Want To Be Paid For The Use Of Their Likenesses In Video Games.

Both the trial and appeals courts were called upon to "balance the right of publicity of former professional football players against [a video game company’s] First Amendment right to use their likenesses in its Madden NFL series of video games." Madden NFL allows video game users to play virtual football games between National Football League [NFL] teams by controlling virtual players, or avatars. Each annual version of Madden NFL includes all current players for all 32 NFL teams, along with accurate player names, team logos, colors and uniforms. The video game company pays the NFL’s official players’ association an annual licensing fee in the millions of dollars to use current likenesses. But, plaintiffs here are former professional football players, 6,000 in total including Tony Davis and Billy Joe Dupree, whose likenesses are used in the video game company's "historic teams" games. In affirming the trial court's denial of the video game company's motion to dismiss, the Ninth Circuit noted the video game company acknowledged the substantial commercial value of using virtual avatars of current players, and did not provide a persuasive reason why the same does not apply to former players. The appeals court concluded no First Amendment protection was in order. (Davis v. Elec. Arts, Inc. (Ninth Cir.; January 6, 2015) 775 F.3d 1172.)

"No Good Deed Goes Unpunished:"—Clare Boothe Luce.

A civil engineer, the cross-defendant herein, was hired to prepare plans to build a pier. His plans called for a very particular kind of concrete mixture, which concrete was supplied by defendant/cross-complainant. After defendant/cross-complainant prepared the concrete, cross-defendant gratuitously reviewed the recipe used and approved the prepared concrete. On the day of the concrete pour, defendant/cross-complainant encountered mechanical difficulty with its dispensing equipment and had to perform manually. When tested after the pour, the concrete did not meet specifications, and the pier had to be replaced. After defendant was sued, it cross-complained against the civil engineer for implied equitable indemnity and contribution, alleging the civil engineer failed to use reasonable care in his review of the concrete mixture. The trial court sustained the civil engineer’s demurrer without leave to amend. Citing the economic loss rule, and noting that defendant/cross-complainant may not recast its breach of contract/breach of warranty action into a tort action, the appellate court affirmed. (State Ready Mix, Inc. v. Moffatt & Nichol (Cal. App. Second Dist., Div. 5; January 8, 2015) 232 Cal.App.4th 1227, [181 Cal.Rptr.3d 921].)

After Partial Payment In Medical Malpractice Action, Patient Was Not Informed Of Statute Of Limitations.

After surgery, a patient suffered an infection. The bacteria that infected the patient’s knee apparently survived the sterilization process at the surgical facility. The bacteria was found on a surgical sponge. The doctor paid the patient $4,118.23 for the medical expenses he incurred for treatment of the infection. Fifteen months later, the patient sued the doctor and the facility for medical malpractice. The sponge manufacturer was added as a defendant and settled with the patient for $100,000. A jury found medical malpractice and awarded $543,034, which the court reduced to $285,114. On appeal, the doctor and surgical facility contended the trial court erroneously denied their statute of limitations contentions. The appellate court discussed Insurance Code section 11583, which provides in relevant part: “. . .Any person . . . who makes such an advance or partial payment, shall at the time of beginning payment, notify the recipient thereof in writing of the statute of limitations applicable to the cause of action which such recipient may bring against such person as a result of such injury . . . Failure to provide such written notice shall operate to toll any such statute of limitations.” The medical defendants argued that applying section 11583 in medical malpractice actions would open up a can of worms. In affirming, the appellate court said section 11583 requires no more than that the payor notify the payee in writing of the applicable statute of limitations, not the expiration date. (Blevin v. Coastal Surgical Institute (Cal. App. Second Dist., Div. 6; January 12, 2015) 232 Cal.App.4th 1321, [182 Cal.Rptr.3d 704].)

No Prohibition Of Recording Birth Date Of Person Who Buys Alcohol With A Credit Card.

Plaintiff filed a class action for damages under the Credit Card Act [Civil Code section 1747.08], one of the provisions of which prohibits businesses from requesting that cardholders provide personal identification information during credit card transactions. In the present matter, a business recorded the birth date of a customer who purchased alcohol with a credit card. The trial court sustained defendant’s demurrer without leave to amend, and the appellate court affirmed, stating that section 1747.08 (a) and (c)(4) permit the recordation of personal identifying information during the purchase of alcohol. (Lewis v. Jinon Corp. (Cal. App. Second Dist., Div. 5; January 13, 2015) 232 Cal.App.4th 1369, [182 Cal.Rptr.3d 354].)

Recognition Of A Foreign Judgment.

A trial court may recognize a foreign judgment under the Uniform Foreign-Country Money Judgments Recognition Act [Code of Civil Procedure section 1713-1724]. But, despite the legality of 20 percent interest in the foreign jurisdiction, California may not enter a California judgment imposing postjudgment interest at a rate greater than ten percent. (Hyundai Securities Co., Ltd. v. Lee (Cal. App. Second Dist., Div. 5; January 14, 2015) (Case No. B257276).)

Evidentiary Errors And Attorney Misconduct During Trial Result In Reversal Of $1.2 Million Verdict.

During a test drive of a brand new BMW, the prospective purchaser, the defendant here, crashed and totaled the car and injured the salesman, the plaintiff. A jury awarded plaintiff $1.2 million. Citing evidentiary errors and attorney misconduct, the defendant appealed. The appellate court reversed. One of the evidentiary errors found was that the trial court permitted plaintiff’s lawyer to call defendant as an adverse witness and cross-examine him about his negative responses to requests for admissions and admitted into evidence the written requests and denials. The appellate court stated: “We are persuaded, therefore, that denials of RFA’s are not admissible evidence in an ordinary case, i.e., a case where a party’s litigation conduct is not directly in issue. Thus, the trial court permitted examination of [defendant] that was unfair and prejudicial to him, and erred in admitting those responses in evidence.” Another evidentiary error occurred when the trial court allowed plaintiff’s lawyer to question defendant about whether his driving was a substantial factor in causing the accident, and the appellate court found it was error to permit questioning about the ultimate legal issue in the case. Yet another evidentiary error occurred when the trial court permitted cross-examination of defendant about his speeding tickets; the appellate court stated: “Because the evidence had little, if any, relevance to the purpose for which it was ostensibly admitted, and was completely inadmissible as propensity evidence to establish liability, it was unduly prejudicial and should have been excluded under Evidence Code section 352.” The appellate court also held the plaintiff’s lawyer made inappropriate and prejudicial comments about defendant’s Chinese heritage by remarking in opening statement that defendant was born in China and came to California only for visits. The appellate court also found attorney misconduct in plaintiff’s lawyer’s asking the jury to send an appropriate message to the community with its verdict, a comment which might apply in a punitive damages situation, but not when there is only ordinary negligence involved. (Gonsalves v. Li (Cal. App. First Dist., Div. 1; January 13, 2015) 232 Cal.App.4th 1406, [182 Cal.Rptr.3d 383].)

Nominal Damages Did Not Support Award Of Attorney Fees In Real Property Dispute.

This case involves a vineyard versus winery boundary dispute. After a bench trial, the court ruled in favor of the vineyard, quieted title, granted injunctive relief, awarded $1 in damages for past trespass and awarded the vineyard $117,000 in attorney fees under Code of Civil Procedure section 1021.9, which provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.” In affirming in part and reversing in part, the appellate court found no error in admitting testimony of a witness who said a property owner treated the property line at a certain place for years prior to the litigation, noting such evidence does not violate the parol evidence rule and “the court considered it as evidence of the historical beliefs of adjoining landowners as to where the boundary lay.” But the appellate court found it was error to award attorney fees when only nominal damages were awarded without proof of actual injury to real or personal property. (Belle Terre Ranch, Inc. v. Wilson (Cal. App. First Dist., Div. 4; January 13, 2015) 232 Cal.App.4th 1468, [182 Cal.Rptr.3d 393].)

Call Me This And Call Me That, But Call Yourself ... Outside The Jurisdiction Of California.

Plaintiff lived in a State-owned rental unit on the grounds of San Quentin prison, and he walked from his residence to the prison building where he worked. One day, a concrete step on a staircase collapsed underneath him and he suffered injuries in a fall. He filed a lawsuit and the trial court granted the State’s motion for summary judgment based on a "premises line" argument. That is, the trial court reasoned an employment relationship commences when an employee enters an employer's premises, and, accordingly, such an employee's remedy was exclusively under workers' compensation laws. The appellate court reversed, noting the State did not intend its workers compensations policy would insure plaintiff for all injuries he might suffer on the grounds since plaintiff's lease required he obtain a broad comprehensive insurance policy, naming the State as the insured, and concluding whether plaintiff's injury arose during the course and scope of his employment is a question of fact. (Wright v. State of California (Cal. App. First Dist., Div. 2; January 30, 2015) 233 Cal.App.4th 1218 [183 Cal.Rptr.3d 135].)

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