Litigation Update

Litigation Section News: March 2016

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

Table of Contents of This Issue

Hague Convention and Child Custody. 

To combat the harmful effects of international child kidnapping, the Hague Convention on the Civil Aspects of International Child Abduction requires the judicial or administrative authorities of a signatory nation to order a child returned to his or her country of habitual residence if the child has been wrongfully removed to or retained in a Contracting State. The International Child Abduction Remedies Act (ICARA) implements the Convention in the United States, granting federal and state courts concurrent jurisdiction and directing those courts to decide cases under the Convention. (42 U.S.C. § 11601 et seq.) Here, the trial court granted the father’s request to remove his 11-year-old daughter from the care of her mother in California and return her to Denmark without an evidentiary hearing to address the mother’s allegations of the father’s domestic violence. On appeal, the mother contends the trial court erred in granting the father’s petition to return the child to Denmark in his care without an evidentiary hearing on crucial aspects of her claims of spousal abuse and child abuse, including recent death threats. In reversing the trial court’s order, the Court of Appeal agreed the mother’s claims must be addressed in a full evidentiary hearing. (Noergaard v. Noergaard (Cal. App. 4th Dist., Div. 3, Jan. 15, 2016) 244 Cal.App.4th 76.)  

U.S. Supreme Court Denied Cert in Another Challenge to Affordable Care Act.

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A man represented by the Pacific Legal Foundation in Sacramento claimed the Affordable Care Act (ACA; 26 USC §5000A) is unconstitutional because it is a revenue-raising measure that started in the Senate instead of the House of Representatives, which holds “the power of the purse” under the Origination Clause (art. 1, § 7, cl. 1) of the U.S. Constitution. The U.S. Court of Appeals for the District of Columbia affirmed the federal trial court’s dismissal, stating that when a provision’s revenue-raising function is incidental to its primary purpose, the Origination Clause does not apply. The U.S. Supreme Court denied certiorari. (Sissel v. United States Dept. of Health & Human Services (136 S.Ct. 925, Jan. 19, 2016).)   

Custom and Practice Evidence in Strict Liability Actions.

In a trial involving allegations against a car manufacturer that plaintiffs lost control of a pickup truck because the truck lacked electronic stability control (ESC), the trial court denied plaintiffs' motion in limine to exclude evidence that the custom of the automotive industry was not to include ESC as standard equipment in pickup trucks. The jury found in favor of the car manufacturer. On appeal, plaintiffs argued the denial of the motion was error. The Court of Appeal affirmed, stating: “In rejecting this challenge, we part company with one line of cases stating that evidence of industry custom and practice is always inadmissible in a strict products liability action, and with a recent case suggesting such evidence is always admissible. Instead, we hold that evidence of industry custom and practice may be admissible in a strict products liability action, depending on the nature of the evidence and the purpose for which the proponent seeks to introduce the evidence. Because [plaintiffs] moved to exclude all such evidence, the trial court properly denied their motion in limine.” (Kim v. Toyota Motor Corporation (Cal. App. 2nd Dist., Div. 7, Jan. 19, 2016) 243 Cal.App.4th 1366, review granted Apr. 13, 2016, S232574.)  

Qui Tam Dismissal Reversed.  

Patterned after the federal False Claims Act as amended in 1986, the California False Claims Act (CFCA; Gov. Code § 12650 et seq.) is designed to prevent fraud on the public treasury. CFCA authorizes private parties, referred to as qui tam plaintiffs or relators, to prosecute the claim for, and in the name of, a government entity. The complaint is filed under temporary seal, and if the government does intervene, the qui tam plaintiff remains entitled to receive a percentage of the proceeds, and if the government does not intervene, the plaintiff receives a larger percentage. In this matter, plaintiff contended defendant pocketed monies that should have escheated to the State. Defendant claimed it had publicly disclosed its procedures when it filed a Form S-4 report with the SEC, and that the qui tam action was therefore barred, and the trial court dismissed the action on that basis because plaintiff was not the original source of the disclosure. In reversing, the Court of Appeal said the public disclosure bar should not be applied so broadly as to undermine the Legislature’s intent to prevent identification, investigation and prosecution of false claims. (State of California ex rel. Bartlett v. Miller (Cal. App. 2nd Dist., Div. 7, Jan. 19, 2016) 243 Cal.App.4th 1398.) 

California Discrimination Law Preempted in Class Action on Behalf of Blind Travelers.

Three blind persons filed a class action against an airline alleging its policy of using automatic kiosks inaccessible to blind travelers violates California’s anti-discrimination laws. A federal trial court dismissed the action, ruling it is preempted by a federal law, the Airline Deregulation Act (ADA; 49 USC § 41713). The Ninth Circuit Court of Appeals affirmed the dismissal, find, that while the blind persons’ state law claims are not expressly preempted by the ADA, they are impliedly preempted by the Air Carrier Access Act (ACAA; 49 USC § 41705). (National Federation of the Blind v. United Airlines Inc. (9th Cir., Jan. 19, 2016) 813 F.3d 718.)

Complicated Government Claims Process.

A woman alleged that a mayor inappropriately touched her on May 25, 2013.  Almost a year later, she filed an application with the City for leave to file a late claim, and the City denied her application on May 8, 2014. Along with mailing her the denial, the City also informed her of her right to ask a court to relieve her from the provisions of Government Code § 945.4, which requires that a lawsuit for damages cannot be filed against a public entity unless the claimant first presents a claim to the public entity. On November 12, 2014, the woman filed a complaint in court, and the next day she filed a petition with the trial court for an order relieving her from the claims presentation requirement. Government Code § 946.6, subdivision (b) provides that such a petition must be filed within six months after the application to the entity was denied. Recognizing the petition was filed more than six months after the denial, but extending the required time by five days for mailing the denial, the trial court granted the petition. The Court of Appeal granted extraordinary relief to the City, concluding the trial court should not have extended the six-month period by five days for mailing. (City of San Diego v. Superior Court (Cal. App. 4th Dist., Div. 1, Jan. 20, 2016) 244 Cal.App.4th 1.) 

Erisa-Plan Beneficiaries Might Want to Spend Third-Party Recoveries Quickly.

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A health benefit plan for employees of a company paid medical bills of $121,044.02 for an employee who was injured in a car accident involving a drunk driver. The employee hired a lawyer and secured a $500,000 settlement against the drunk driver. A federal trial court in Florida granted summary judgment to the insurance company seeking reimbursement from the employee in an action brought under ERISA (Employee Retirement Income Security Act; 29 USC § 1132(a)(3)), and the 11th Circuit Court of Appeals affirmed, even though the employee contended he had already spent almost all of the settlement, and there was no identifiable fund against which to support an ERISA lien. In an opinion authored by Justice Thomas, the U.S. Supreme Court reversed the judgment and remanded, holding that when an ERISA-plan participant wholly dissipates a third-party settlement on non-traceable items, the plan fiduciary may not bring suit to attach the participant’s separate assets. (Montanile v. Board of Trustees (Jan. 20, 2016) 136 S.Ct. 651.) 

Anti-Deficiency Law Applies to Short Sales.

Under Code of Civil Procedure section 580b, when an individual borrows money from a bank to buy a home and the bank forecloses on the home, the bank can collect proceeds from the foreclosure sale but nothing more. The bank may not obtain a deficiency judgment against the borrower if the sale proceeds are not enough to repay the loan. At issue here is whether the statute’s anti-deficiency protection applies not only when a bank initiates a foreclosure sale, but also when a defaulting borrower arranges a short sale. In a short sale, the borrower sells the home to a third party for an amount that falls short of the outstanding loan balance; the lender agrees to release its lien on the property to facilitate the sale; and the borrower agrees to give all the proceeds to the lender. The California Supreme Court held that the statute applies to short sales just as it does to foreclosure sales. (Coker v. JPMorgan Chase Bank, N.A. (Jan. 21, 2016) 62 Cal.4th 667).)

Judgment of Juvenile Murderer Sentenced to Life Without the Possibility of Parole Reversed by U.S. Supreme Court. 

In 1963, when defendant was 17 years old, he killed a police officer. After two trials, he was sentenced to life without the possibility of parole (LWOP). Meanwhile, almost 50 years after he was first taken into custody, the United States Supreme Court issued Miller v. Alabama (2012) 132 S.Ct. 2455, which held sentences of LWOP are unconstitutional for many juvenile offenders. So, the question is whether or not Miller v. Alabama is retroactive. In the present case, SCOTUS said that Miller announced a substantive rule of constitutional law, stating: “Miller’s conclusion that the sentence of life without parole is disproportionate for the vast majority of juvenile offenders raises a grave risk that many are being held in violation of the Constitution.” The judgment in the present case was reversed and the matter was remanded to Louisiana for further proceedings.  (Montgomery v. Louisiana (Jan. 25, 2016) 136 S.Ct. 718.) 

Limits on PUC's Jurisdiction.

A public water management district imposed a fee on a public utility’s customers for work it had undertaken to mitigate environmental damage caused by the utility. It was charged as a line item on the utility’s bill and was collected by the utility on behalf of the agency. The PUC issued a decision ordering the utility that actually bills the customers to either take over the mitigation work itself or submit a new method of collecting funds for the mitigation work. The question before the California Supreme Court was whether the Public Utilities Commission (PUC), which is empowered to regulate the rates and charges of public utilities, had the authority to review the amount of the agency’s fee. In setting aside the PUC’s decision, the California Supreme Court stated: “We accordingly set aside the decisions before us on review and remand the matter to the PUC for reconsideration. On remand, the PUC should distinguish between agency-originated charges and utility-originated charges, and it may not treat an agency-originated charge as a utility surcharge merely because the agency is performing work that fulfills a utility’s legal responsibility.”  (Monterey Peninsula Water Management Dist. v. Public Utilities Com. (Jan. 25, 2016) 62 Cal.4th 693.)  

Not a Good Month for the PUC.

Plaintiffs alleged stray electrical currents from a nearby Edison substation were causing them to suffer medical injuries. Finding plaintiff’s claims are within the exclusive jurisdiction of the Public Utilities Commission (PUC), the trial court sustained Edison’s demurrer. After the trial court’s ruling, a Court of Appeal in another case issued an opinion that we reported several months ago:

"Electricity Is Just Organized Lightening," George Carlin. In a jury trial, a jury awarded $1,050,000 in compensatory damages and $3,000,000 in punitive damages against an electric company and in favor of plaintiff on her claims for IIED, negligence and nuisance, based upon her contentions the company failed to control its electrical substation next door to plaintiff’s house. She said the company allowed uncontrolled stray electrical currents to enter her home, including low levels of electricity while showering. The company offered to replace plaintiff’s metal pipes with plastic pipes, but she refused, insisting on the elimination of all stray voltage on her property. On appeal, the company contends all of plaintiff’s claims fall under the exclusive jurisdiction of the California Public Utilities Commission (PUC). The appellate court reversed, stating: “We conclude that the PUC has not exercised its authority to adopt a policy regarding the issues in this lawsuit, and therefore it does not have exclusive jurisdiction over [plaintiff’s] claims. But we also conclude [plaintiff] failed to present sufficient evidence to support her IIED and negligence claims, or to support an award of punitive damages. Finally, we conclude the verdict on the nuisance claim cannot stand because the trial court refused to give [the electric company’s] proffered instruction regarding causation of [plaintiff’s] physical symptoms, and therefore the jury relied upon irrelevant evidence when determining that claim.  Accordingly, we reverse the judgment, order judgment entered in favor of [the electric company] on the IIED and negligence claims, and remand to the trial court for a retrial on the nuisance claim.” (Wilson v. Southern California Edison Co. (2015) 234 Cal.App 4th 123.)
In the present matter, the Court of Appeal reversed and remanded, stating the PUC does not have exclusive jurisdiction.  (Seacrist v. Southern California Edison Co. (4th Dist., Div. 2, Jan. 27, 2016) 244 Cal.App.4th 308.) 

... But PUC Still Strong. 

Plaintiff filed a putative class action suit against defendant Southern California Edison Company. In his second amended complaint, plaintiff alleged that Edison fraudulently enrolled ineligible customers in the California Alternate Rates for Energy (CARE) program, which provides rate assistance to low-income electricity and gas customers. The CARE program is subsidized by all other ratepayers, and plaintiff alleged that Edison’s practice of enrolling ineligible participants caused the CARE program surcharge he and other ratepayers were assessed to be higher than it should have been. The trial court sustained Edison’s demurrer without leave to amend. The Court of Appeal affirmed, stating Public Utilities Code § 1759, subdivision (a) forecloses plaintiff’s claims because a judgment in his favor would have the effect of undermining a general supervisory or regulatory policy of the PUC.  (Lefebvre v. Southern California Edison (2nd Dist., Div. 4, Jan. 25, 2016) 244 Cal.App.4th 143.)

"To Be, Or Not To Be" ... an Independent Contractor, That Is.

Plaintiff alleges he was at the top of a ladder installing rain gutters at an investment property owned by defendant when he stepped onto scaffolding that another contractor had erected. Defendant had hired the other contractor to perform stucco work. The scaffolding collapsed and plaintiff fell onto a pile of bricks below and was injured. Defendant moved for summary judgment, presenting two arguments. First, defendant argued that Privette v. Superior Court (1993) 5 Cal.4th 689 and its progeny precluded application of the peculiar risk doctrine. Second, defendant contended that under general principles of premises liability law, he had no actual or constructive knowledge that the scaffolding was dangerous, and absent such knowledge, he had no duty to warn plaintiff of the allegedly dangerous condition. In opposition, plaintiff argued defendant was responsible under the peculiar risk doctrine to provide a workplace safe from such danger because the other contractor’s work involved a special risk of physical harm.  Plaintiff also argued defendant had an “enhanced duty” to investigate whether the other contractor was licensed, and, because he was unlicensed, defendant was liable under the theory of respondeat superior. The trial court granted summary judgment in favor of defendant. The Court of Appeal first discussed whether or not the other contractor was an employee or an independent contractor, noting defendant had not produced evidence the other contractor was licensed. The appellate court stated that under Labor Code § 2750.5, without showing there was a license, there is no independent contractor status. Accordingly, the appellate court reversed the grant of summary judgment because the moving party defendant did not meet his initial burden to show the other contractor was licensed, without which he would be defendant’s employee, subjecting defendant to liability under the theory of respondeat superior.  (Blackwell v. Vasilas (4th Dist., Div. 1, Jan. 26, 2016) 244 Cal.App.4th 160.)

Employee Who Quit Has to Pay Back Employer Who Gave Him a Free Education in Exchange for Not Quitting for 30 Months After Completion of Education.

An employer faced a shortage of skilled maintenance technical electrical workers. As a result it offered free education under certain circumstances. An employee and the employer entered into an agreement wherein the employee enrolled in a three-year educational program. The employee agreed in writing that if he quit his job within 30 months of completing the program, he would reimburse the employer a prorated portion of program costs. Two months after completing the program, the employee quit, and he refused to pay the reimbursement. The employer sued for breach of contract and unjust enrichment, and the employee cross-complained, asserting the reimbursement agreement was unenforceable. The trial court granted the employer’s motion for summary judgment on both the complaint and the cross-complaint. The court ordered the employee to pay the employer’s attorney fees. Finding the reimbursement agreement did not violate the Labor Code, did not pass operating expenses to an employee, did not interfere with the collective bargaining agreement and was not unconscionable, the Court of Appeal affirmed, but remanded on the attorney fee issue due to a statutory change in Labor Code § 218.5’s attorney fee provision, which now requires a wage claim to be brought in bad faith. (USS-POSCO Industries v. Case (1st Dist., Div. 1, Jan. 26, 2016) 244 Cal.App.4th 197, review filed Mar. 7, 2016.)

Suing Over Music Downloads Gets Complicated.

In this breach of contract case, plaintiff was the front person for a former band that is now a suspended corporation. She claims the recording companies treated certain streamed/downloaded music sales as record sales rather than revenue from licensing, and, as a result underpaid the artists. Plaintiff was not a party to the recording contract, but seeks to enforce it as a third party beneficiary. The federal trial court dismissed the action, reasoning that, since the band is now a suspended corporation and plaintiff was not in a position to revive the corporation, she lacks the capacity to sue. The Ninth Circuit was called upon to decide whether plaintiff has the capacity to sue, and whether she has pleaded sufficient facts to establish her standing to sue as a third party beneficiary of the contract between the band and the recording companies since she signed an Artist Declaration in which she agreed that she would not look to the recording companies for payment of royalties. In reversing and remanding, the appeals court concluded that plaintiff likely has the ability to apply for the revival of the corporation and that whether plaintiff waived any benefits under the contract amounts to a question of fact.  (Bozzio v. EMI Group Limited (9th Cir., Jan. 26, 2016) 811 F.3d 1144.) 


A city sued an advertising company, contending the ad company erected a billboard without a city or state permit. The superior court granted a preliminary injunction, and the ad company appealed. In 2004, the city adopted an ordinance prohibiting all new offsite billboards or outdoor advertising signs anywhere in the city except as permitted under the ordinance. Offsite ads already in place in 2004 were “grandfathered,” and thus permitted to be relocated under certain conditions. On appeal, the ad company contended the city applied the 2004 ordinance in an unlawful and discriminatory manner. In affirming the preliminary injunction, the Court of Appeal concluded the city did not apply its ordinance in a discriminatory manner, the ad company was not denied equal protection, and there was no prior restraint. (City of Corona v. AMG Outdoor Advertising, Inc. (Cal. App. 4th Dist., Div. 2, Jan. 26, 2016.) 244 Cal.App.4th 291.)

Lis Pendens Void.

The Court of Appeal issued a peremptory writ of mandate in this real property action. This was the situation. On March 28, 2014, the real party sued two defendants for breach of contract, specific performance and declaratory relief, alleging defendants failed to perform on a written agreement to sell a certain parcel to real party. That same day, real party filed a lis pendens. On March 2, 2015, petitioner was granted leave to intervene in the action, alleging it is the true owner of the parcel pursuant to a grant deed that was recorded on April 2, 2014. On March 25, 2015, petitioner moved to expunge the lis pendens, arguing it was void due to invalid service. Real party was only able to offer a proof of service indicating that one of the two defendants was personally served. The superior court denied the motion to expunge. In granting the writ, the Court of Appeal noted that CCP § 405.22 requires a claimant filing a lis pendens to serve “the parties to whom the real property claim is adverse and to all owners of record of the real property affected by the real property claim” by registered mail. The appeals court found the lis pendens void under the statute, and then stated the holding in Biddle v. Superior Court (1985) 170 Cal.App.3d 135, which held a court should not grant a motion to expunge because of technical defects in service, does not apply in this case because “real party in interest’s noncompliance with section 405.22 means it cannot satisfy both prongs of the Biddle exception.” (Rey Sanchez Investments v. Superior Court (Cal. App. 4th Dist., Div. 2, Jan. 26, 2016) 244 Cal.App.4th 259.)

Law Firm Simultaneously Represented a Plaintiff and a Defendant.

Without obtaining informed consent from either client, a law firm simultaneously represented a defendant in litigation as well as a plaintiff in the same case in an unrelated matter. California Rules of Professional Conduct, Rule 3-310 bars simultaneous representation of clients with adverse interests. The defendant in the underlying litigation was billed nearly $3.8 million for 10,000 hours of work until the law firm was disqualified as counsel. The defendant in the underlying action demanded the return of all fees it had paid to the law firm and declined to pay the unpaid portion of the billings. The law firm sued the client for specific performance, breach of contract, account stated, services demanded and quantum meruit, seeking $1.3 million for services rendered in the underlying action, and the client cross-complained for breach of contract and breach of fiduciary duty. Because of a written agreement to arbitrate disputes, the matter was ordered to arbitration. A panel of three arbitrators denied the client’s claims and ordered the client to pay the remainder of the billings, and the trial court confirmed the award. The Court of Appeal reversed the judgment, stating: “Because [the law firm’s] representation of [the client] violated Rule 3-310 and public policy, the trial court erred by enforcing the contract between the parties and entering judgment on the arbitration award based on that contract.” (Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co, Inc. (Cal. App. 2nd Dist., Div. 4, Jan. 29, 2016) 244 Cal.App.4th 590, review filed Mar. 9, 2016.)

Writing a Check Payable to Someone Who Is Entitled to the Funds as Well as to Someone Else Who Refuses to Endorse the Check.

Government Code § 23004.1 provides that in any case in which a county is authorized to furnish medical treatment to a person who suffers injury caused by a third party, the county has a right to recover the costs for the treatment from the third party tortfeasor. In this case, the injured person received a judgment against the tortfeasor, the county asserted its lien, and the tortfeasor issued a check in the amount of the lien, but the check was made out jointly to the county and the injured person. The injured person refused to endorse the check over to the county, so the county filed a new suit against the tortfeasor, which the trial court dismissed after concluding the county’s cause of action was extinguished by the injured person’s judgment. The Court of Appeal reversed, stating: “We hold that, on the contrary, an adjudicated tortfeasor holding disputed funds it knows are encumbered by a public hospital lien cannot avoid liability by simply turning control of the funds over to the injured person.” (County of Santa Clara v. Escobar (Cal. App. 6th Dist., Jan. 29, 2016) 244 Cal.App.4th 555.)

Daughter Signs Arbitration Agreement When Admitting Parent into Elder Care Facility.

An adult child, acting as power of attorney for an elderly parent suffering from dementia, signed a residency agreement that included an arbitration provision while admitting the elderly parent into a care facility. Years later, the elderly parent’s estate filed a complaint for elder abuse and wrongful death against the facility. The trial court declined to order the matter into arbitration, ruling the children were not parties to the arbitration agreement and also declined to order the elder abuse claim into arbitration, concerned about the possibility of conflicting rulings. In affirming, the Court of Appeal agreed with the trial court that the surviving children were not parties to the arbitration agreement and that the child who did sign it did so in her capacity as decendent’s power of attorney and not in her personal capacity. With regard to the facility’s argument that the daughter who signed the agreement was bound by the decedent’s obligation, the appellate court stated:  “As personal representative of the estate, plaintiff is asserting the wrongful death claim on behalf of decedent’s heirs, not decedent.” (Monschke v. Timber Ridge Assisted Living, LLC (Cal. App. 1st Dist., Div. 1, Jan. 29, 2016) 244 Cal.App.4th 583.)

Jail Had Wrong Man With Same Name.

A man named Mario Garcia was arrested in Riverside for driving under the influence. Riverside sheriff’s computer search revealed a warrant issued by the Los Angeles Superior Court in 1994 for a man with the same name and the same birth date. The next day, the man was transferred to Los Angeles. He complained to everyone with whom he had contact that they had the wrong man. No one listened to him, even though the warrant was for someone who was 5’1” tall and weighed 130 pounds; whereas, the man under arrest was 5’10” and weighed 170 pounds. Nor did the middle names, fingerprints or criminal histories of the two match. Later, the man brought a civil rights action under 42 USC § 1983, alleging wrongful incarceration in violation of the Fourteenth Amendment and Due Process Clause. The federal trial court denied defendants’ motion to dismiss, concluding the jail detention was beyond the point when officers should have known to release him. The Ninth Circuit affirmed, finding the defendants were not entitled to immunity and whether the defendants acted reasonably under the circumstances is a question of fact. (Garcia v. County of Riverside (9th Cir., Feb. 3, 2016) 811 F.3d 1220.)

Hardball Tactics Boomerang.

In a personal injury action, plaintiff alleged defendants negligently designed and maintained an exterior stairway on which he fell. One of the two defendants served a demand for exchange of expert witness information pursuant to Code of Civil Procedure § 2034.210. Plaintiff served an objection to the demand on the ground it was untimely. The two defendants exchanged expert witness information, and plaintiff did not. One of the defendants thereafter moved for summary judgment on the ground that plaintiff could not satisfy his burden of proving the existence of a dangerous condition at the property or that defendant had knowledge of such a dangerous condition. In opposition, plaintiff included the declarations of two expert witnesses. Defendant filed evidentiary objections to plaintiff’s expert declarations, arguing principally that plaintiff’s failure to participate in the exchange of expert witness information and failure to designate any expert witnesses precluded him from using the declarations to oppose summary judgment. The trial court sustained defendant’s evidentiary objections and granted the motion for summary judgment on the ground that plaintiff offered no admissible evidence to dispute the facts that defendant breached no duty of care and had no actual or constructive notice of any dangerous condition. On appeal, the court noted that, “By excluding from evidence plaintiff’s expert declarations, the trial court in this case implicitly found that plaintiff had unreasonably failed to disclose his expert witnesses.” The appellate court recognized plaintiff claimed to have served a written objection to the timeliness of the demand, but said the Legislature did not provide for objections to demands for exchanges of experts, and that plaintiff “should instead have filed a motion for a protective order.” In affirming the trial court’s granting summary judgment, the appellate court said: “Having neither sought nor obtained such order, plaintiff was required to ‘exchange information concerning expert witnesses in writing on or before the date of exchange specified in the demand.”’ (Perry v. Bakewell Hawthorne, LLC (Cal. App. 2nd Dist., Div. 2, Feb. 3, 2016) 244 Cal.App.4th 712, review filed Mar. 16, 2016.)

Claim From Excess Carrier for Uninsured Motorist Coverage.

Plaintiff was insured under both a primary and excess insurance policy. Plaintiff was injured in a motor vehicle accident caused by a negligent driver who was insured with a $25,000 liability limit. Plaintiff settled with the tortfeasor, accepting the $25,000 limit. Plaintiff then submitted a claim to his own primary carrier and eventually recovered $1 million, the policy limit.  Thereafter, plaintiff submitted a claim to his excess carrier for another $1 million in excess coverage. The excess carrier denied coverage and the instant action was brought by plaintiff against his excess carrier. The trial court entered judgment in the excess carrier’s favor. The issue presented on appeal was whether an excess liability insurance policy that “follows form” to an underlying primary policy that provides uninsured motorist/underinsured motorist coverage must also provide such coverage after the underlying policy limit has been exhausted. In affirming the trial court judgment, the appellate court stated: “We hold that the excess policy does not provide coverage for first party UM/UIM claims because the policy’s insuring agreement unambiguously limits the insurer’s indemnity obligation to third party liability claims.” (Haering v. Topa Ins. Co. (Cal. App. 2nd Dist., Div. 2, Feb. 3, 2016) 244 Cal.App.4th 725.)

Grandparent Visitation.

A child was born in 2004, and her grandparents were very active in her life, including acting as caregivers much of the time. At some point, the child’s parents divorced, and the child and her father moved in with the grandparents. Thereafter, the relationship between the child’s father and the grandparents soured when the father began taking prescription medication. In 2011, the father and daughter moved out of the grandparents’ home, and the father informed the grandparents they would never see their granddaughter again. The grandparents’ attempts to schedule visits were unsuccessful, and when they showed up unexpectedly at the child’s soccer practice, the father told them to leave or he would take the child and go home. When they stayed, the father began to walk the child to the car, so the grandparents relented and left the practice. The child’s mother, however, started to permit the grandparents to visit with the child during her parenting time, and when the father discovered this arrangement, he became angry, so the child’s mother ceased the visits. In 2013, the grandparents petitioned the superior court for an order permitting them to visit their granddaughter. Pursuant to Family Code § 3104, the trial court awarded visitation to the grandparents. The father brought the present appeal. In affirming the trial court’s decision, the Court of Appeal stated: “We conclude section 3104 permissibly reflects a legitimate state interest in preserving an already existing grandparent-grandchild relationship that is threatened but in the best interest of the grandchild to safeguard.” However, with regard to the trial court’s order that the father participate in anger management counseling, the appeal court reversed, and remanded for the trial court to determine whether the father’s anger poses a substantial danger to the best interests of the child and make other findings. (Stuard v. Stuard (Cal. App. 3rd Dist., Feb. 5, 2016) 244 Cal.App.4th 768, review filed Mar. 16, 2016.)

A Stipulations Eliminates the Need for Proof.

The defendant stipulated that the notice of a mechanic’s lien was served by certified mail, that the U.S. Postal Service website tracking certified mail items showed the notice was delivered, and that defendant actually received the notice. A former statute (Civ. Code, § 3097.1) required the lienholder to provide a return receipt, and on that basis, the trial court dismissed the lienholder’s action. The Court of Appeal reversed, stating: “A stipulation eliminates the need for proof.” (HUB Construction Specialties, Inc. v. Esperanza Charities, Inc. (Cal. App. 2nd Dist., Div. 8, Feb. 8, 2016) 244 Cal.App.4th 855, review filed Mar. 21, 2016.)

Assignment of Action Against an Insurance Broker Who Did Not Obtain Fire Policy for Client.

An insurance broker allegedly failed to obtain insurance requested by a client. Thereafter, the client negligently caused a fire that destroyed his own and nearby businesses. The client settled with the nearby businesses by assigning to them and their insurance companies his causes of action against the insurance broker, who is the defendant in the present action. In an action brought by the assignees, the insurance broker moved for summary judgment, which the trial court granted. In reversing, the Court of Appeal stated:  “California, like the majority of jurisdictions in the United States, recognizes the assignability of a client’s causes of action against an insurance broker or agent for failing to obtain insurance”; “[W]e conclude their contractual assignments are not subject to the rule of superior equities”; and, “[T]here is a triable issue of material fact about whether the client requested the insurance broker to obtain insurance coverage before the fire.” (AMCO Ins. Co. v. All Solutions Ins. Agency, LLC (Cal. App. 5th Dist., Feb. 8, 2016) 244 Cal.App.4th 883, review filed Mar. 17, 2016.) 

No Attorney Fees for Public Employee Unions.

A city sought to compel its retirement system to increase city employees’ contributions to their retirement fund to share in covering investment losses suffered by the fund, and the public employees brought this action. Four public employee unions intervened, asserting similar rights as those asserted by the employees already in the action. After the case settled, the unions sought to recover $1,785,147 in attorney fees under Code of Civil Procedure § 1021.5, which sets forth California’s private attorney general doctrine, as an exception to the general rule that each party to litigation must bear its own attorney fees. It authorizes an award of attorney fees to a successful party in an action that has “resulted in the enforcement of an important right affecting the public interest.” Both the trial and appellate courts concluded the unions were not entitled to fees, as their involvement in the lawsuit was unnecessary to the result that was achieved. (San Diego Municipal Employees Assn. v. City of San Diego (Cal. App. 4th Dist., Div. 1, Feb. 9, 2016) 244 Cal.App.4th 906, review filed Mar. 22, 2016.)

No Statement of Reasons Required for CCP § 473(b) Relief.

Code of Civil Procedure § 473, subdivision (b) requires a trial court to vacate a default, default judgment, or dismissal that is “in fact” caused by an attorney’s “mistake, inadvertence, surprise, or neglect” if the attorney files a sworn affidavit “attesting” to such. The question in this case is whether or not the attorney must also disclose the reasons for the mistake, inadvertence, surprise, or neglect. The Court of Appeal noted that such a statement of reasons would be helpful and may sometimes be relevant to prove the causal link between the attorney’s conduct and the default, default judgment, or dismissal, but the answer is “no,” and that a statement of reasons is not required. (Martin Potts and Associates, Inc. v. Corsair, LLC (Cal. App. 2nd Dist., Div. 2, Jan. 28, 2016) 244 Cal.App.4th 432.)

CCP § 473(b) Imposes No Penalty-Of-Perjury Requirement.

In a wrongful termination case, plaintiff’s complaint alleged various statutory violations and torts based on her gender, race, and age. After plaintiff’s counsel successfully moved to be relieved, defendants moved for summary judgment.  Plaintiff, by then representing herself, filed a document entitled “request for leave to amend in opposition for summary judgment.” Later, plaintiff filed a reply brief containing copies of letters from other teachers corroborating her allegations, but not in the form of admissible evidence. Plaintiff also submitted her own declaration, which described one of the alleged incidents. The court granted the motion for summary judgment, but stayed entry of the final ruling and gave plaintiff 60 days to find another lawyer. Her new lawyer brought a motion for relief pursuant to Code of Civil Procedure § 473, subdivision (b), but the court refused to consider it on the merits because it was not signed under penalty of perjury. Finding that § 473, subdivision (b) imposes no penalty-of-perjury requirement, the Court of Appeal reversed and remanded. (Austin v. Los Angeles Unified School Dist. (Cal. App. 2nd Dist., Div. 7, Feb. 9, 2016) 244 Cal.App.4th 918.)

Third CCP § 473(b) Case Within Two Weeks.

After demurrers were sustained and motions to strike were granted in favor of two defendants, the trial court gave plaintiff ten days to file an amended pleading, despite the fact that no one appeared in court for plaintiff when the matters were heard. The amended complaint was due May 22.  At 11:55 p.m. that same day, a new lawyer for plaintiff electronically filed a substitution of attorney, which stated he was replacing plaintiff’s previous attorney of record. However, the previous lawyer signed the document on March 31, and the new lawyer did not sign it until May 20. On May 28, when no amended pleading was filed, the court granted an application to dismiss the action. That same day, after the dismissal was entered, plaintiff’s new lawyer electronically filed an amended complaint, so the court and parties treated the amended complaint as ineffectual. On July 17, plaintiff moved to set aside the dismissal pursuant to Code of Civil Procedure § 473, subdivision (b) on grounds of excusable neglect and attorney fault. In the attorney declaration of fault, plaintiff’s new lawyer said he received the substitution of attorney document from the old lawyer on April 1, but forgot to sign it because he was preparing for trial. He also declared he had not been told about the demurrers and motions to strike. The trial court granted the motion and vacated the dismissal. The Court of Appeal affirmed, stating: “While the evidence does not support granting relief for mistake, inadvertence, surprise, or excusable neglect, since the dismissal resulted from plaintiff’s newly retained attorney’s failure to oppose the demurrers and timely file an amended complaint, plaintiffs are entitled to relief under section 473, subdivision (b)’s attorney-fault provision.” (Younessi v. Woolf (Cal. App. 4th Dist., Div. 3, Feb. 16, 2016) 244 Cal.App.4th 1137.)

If You Want to Go to Arbitration, Pay the Two Dollars.

One defendant successfully petitioned for arbitration in a wrongful termination case, and the trial court stayed litigation against the other defendant pursuant to Code of Civil Procedure § 1281.4. Plaintiff requested the defendant in arbitration to pay the arbitration filing fee pursuant to Armendariz v. Foundation Health (2000) 24 Cal.4th 83, but the defendant refused to pay it. The arbitration provider dismissed the arbitral proceeding after no arbitration costs were paid. Plaintiff then moved the superior court to lift the stay, which the court did. Defendants appealed, and the Court of Appeal dismissed, holding the appeal was from a nonappealable order. (Gastelum v. Remax International, Inc. (Cal. App. 2nd Dist., Div. 5, Feb. 11, 2016) 244 Cal.App.4th 1016)

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