Untitled Document

Litigation Update

Litigation Section News: May 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

Read The Disposition In An Appellate Opinion.

A matter came to the appellate court several months ago, and the opinion reversed the trial court’s grant of a nonsuit against one plaintiff and also reversed the judgment “in all other respects.” Afterward, one of the parties began executing on another party to collect on the underlying order for costs. In the current appeal, treated as a writ for extraordinary relief, the appellate court directed the trial court to vacate its order denying a request to quash a judgment debtor’s examination. (Ducoing Management, Inc. v. Sup. Ct. (Winston & Associates Insurance Brokers) (Cal. App. Fourth Dist., Div. 3; February 10, 2015) 234 Cal.App.4th 306 [183 Cal. Rptr.3d 548].)

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 Reasonable Accommodation Does Not Require Elimination Of Essential Job Function.

Plaintiff injured his knee at work in 2003 and thereafter underwent several surgeries and procedures, and was placed on light duty. The employer, a public entity, had an accommodations committee which offered plaintiff either a lateral job move or a demotion to assume a lesser job, neither of which appealed to plaintiff. As negotiations continued, plaintiff performed a job with restrictions, and injured his lower back in 2006, after which he never returned to work. Another knee surgery was performed and accommodation negotiations continued. At some point, plaintiff filed a complaint with the California Department of Fair Employment and Housing [DFEH] and obtained a right to sue letter. The instant suit, filed in 2011, alleges the employer refused to reinstate him with or without an accommodation in causes of action for disability discrimination, failure to provide reasonable accommodation, failure to engage in an interactive process and retaliation. The trial court entered summary judgment in favor of the employer. On appeal, with regard to the statute of limitations, plaintiff argued the “continuing violation doctrine,” but that argument was rejected because plaintiff did not develop it. In affirming, the appellate court concluded the employer was not required to eliminate essential functions from a job to accommodate the plaintiff, and his inability to perform an essential function was “enough to move on to other alternatives, such as reassignment.” (Nealy v. City of Santa Monica (Cal. App. Second Dist., Div. 8; February 13, 2015) 234 Cal.App.4th 359 [184 Cal.Rptr.3d 9].)

No Showing Iran Suitable Alternative Forum.

In attempting to reclaim real property in Iran abandoned after the overthrow of the Shah in 1978, the parents of plaintiffs executed powers of attorney for a friend and attorney in Iran to pursue legal proceedings in that country. Years later, plaintiffs realized two of the attorneys in fact in Iran had quitclaimed some of the properties to themselves for little or no consideration. Plaintiffs brought suit in California against those attorneys in fact in Iran. Pursuant to Code of Civil Procedure section 410.30 (a), which provides that a court shall stay or dismiss an action when it finds that the interest of substantial justice is served by having the action heard in a forum outside the state, the trial court stayed the California action. Concluding there is “insufficient evidence to show Iran is a suitable alternative forum,” The Court of Appeal reversed the trial court’s order. (Aghaian v. Minassian (Cal. App. Second Dist., Div. 8; February 17, 2015) 234 Cal. App.4th 427 [183 Cal.Rptr.3d 822].)

Cyber-Bullying Is Basis Of Defamation Claim.

A pastor and his wife brought suit alleging a “cyber-bully hate campaign” against one of the church attendees who “began a discussion about [the pastor] on an internet forum” and also against one of the pastor’s sons who joined the church attendee in posting unflattering remarks about the pastor. The remarks included statements about child molestation, thefts, drug dealing and smuggling. Defendants moved to strike the action pursuant to Code of Civil Procedure section 425.16, and the trial court determined the pastor is a limited purpose public figure who was required to prove defendants acted with malice in order to prevail on the defamation claim. Nonetheless, the trial court concluded the pastor and his wife demonstrated they could prevail on their claims, and denied the motion to strike. Stating the pastor’s “self-promotion as a spiritual leader guiding others on Christian morals did not open him up to public comment on private conduct” did not mean the pastor is a limited purpose public figure, the appellate court held the trial court erred in making its finding the pastor is a public figure. But the appellate court found the pastor could proceed with his defamation action because the internet comments “can reasonably be interpreted as stating actual facts that accuse [the pastor] of criminal conduct.” (Grenier v. Taylor (Cal. App. Fifth Dist.; February 18, 2015) 234 Cal.App.4th 471 [183 Cal. Rptr.3d 867].)

Previously we reported:

After-Acquired Evidence Docrine Inapplicable.

Plaintiff, an African American, twice applied to become a union organizer, but both times the position was filled by white men. He filed a discrimination complaint with the Department of Fair Employment and Housing, and received a right to sue letter. He then filed an employment discrimination action. During discovery, he admitted he had been convicted of possession of narcotics for sale and served time in prison. Although the union was unaware of plaintiff’s felony previously, upon learning about it, the union demanded that plaintiff dismiss his action because, pursuant to 29 U.S.C. § 504(a), he was legally unqualified for the position he sought. Later, the union sought dismissal through a motion for summary judgment, which the trial court granted. On appeal, plaintiff contended the after-acquired evidence doctrine precluded the trial court from considering his felony conviction, and that the decision not to hire him was racially motivated. In affirming, the appellate court found that, since plaintiff was not qualified for the organizer position, he cannot show a prima facie case for racial discrimination.” (Horne v. District Council 16 Internat. Union of Painters & Allied Trades (December 3, 2013) 221 Cal.App.4th 1132, [165 Cal.Rptr.3d 144].) – NOT CITABLE.

Update after Supreme Court ordered the case remanded to the Court of Appeal:

Trial Court Erred In Relying On After-Acquired Evidence.

This time around, the Court of Appeal discussed Salas v. Sierra Chemical Co. (2014) 59 Cal.4th 407 [173 Cal.Rptr.3d 689, 327 P.3d 797], with regard to plaintiff’s argument the trial court improperly considered after-acquired evidence of his prior narcotics conviction and concluding he was ineligible for the organizer job. Salas states: “The doctrine of after-acquired evidence refers to an employer’s discovery, after an allegedly wrongful termination of employment or refusal to hire, of information that would have justified a lawful termination or refusal to hire” and “[t]o allow such after-acquired evidence to be a complete defense would eviscerate the public policies embodied in the FEHA by allowing an employer to engage in invidious employment discrimination with total impunity.” The Court of Appeal held the trial court erred when it granted summary judgment after relying on after-acquired evidence. (Horne v. District Council 16 Internat. Union of Painters & Allied Trades (Cal. App. First Dist., Div. 4; February 18, 2015) 234 Cal.App.4th 524 [183 Cal.Rptr.3d 879].)

Health Club Released From Liability In Plaintiff’s Membership Agreement.

A clip failed on a rowing machine at a 24 Hour Fitness, resulting in severe injury to plaintiff. Plaintiff had signed a release, agreeing the facility was not responsible for injuries, even if they occurred as a result of its own negligence. The trial court granted 24 Hour Fitness’s motion for summary judgment. On appeal, plaintiff contended: (1) there was a triable issue of fact whether defendant was grossly negligent; (2) the release did not relieve defendant of its own negligence: and, (3) defendant was in the chain of distribution and liable based on product liability. In affirming, the appeals court stated that in light of the safety measures regularly taken by defendant, there was no gross negligence, “an exculpatory contract releasing a party from liability for future ordinary negligence is valid unless it is prohibited by statute or impairs the public interest,” and “the dominant purpose of 24 Hour’s membership agreement with [plaintiff] was providing fitness services rather than supplying a product. (Grebing v. 24 Hour Fitness USA, Inc. (Cal. App. Second Dist., Div. 3; January 29, 2015) 234 Cal.App.4th 631 [184 Cal.Rptr.3d 155].)

Posttrial Award Of Expert Fees Under Civ.Proc. § 998.

Prior to trial, and pursuant to Code of Civil Procedure § 998, plaintiff offered to allow judgment to be entered in its favor and against defendant for $665,818. Defendant did not respond to the offer and plaintiff recovered $945,947 at trial. Defendant argued on appeal that the award of expert witness fees by the trial court was invalid for two reasons: (1) the offer was in bad faith because it was silent as to attorney fees; and (2) the offer was ambiguous because it left open the resolution of the cross-complaint. In affirming, and with regard to defendant’s first argument, the Court of Appeal noted plaintiff offered to resolve the matter for less than it received at trial and that this constitutes prima facie evidence the offer was reasonable. With regard to the second argument, the appellate court noted the lack of ambiguity in the Code of Civil Procedure section 998 offer which specifically stated that defendant also agreed “to dismiss with prejudice all causes of action against [plaintiff] in his cross-complaint.” (Calvo Fisher & Jacob LLP v. Lujan (Cal. App. First Dist., Div. 2; February 19, 2015) 234 Cal.App.4th 608 [184 Cal.Rptr.3d 225].)

Doctor's Opinion Not Speculative.

A jury found a medical center failed to timely diagnose breast cancer in plaintiffs’ family member, resulting in her death in 2010. Plaintiffs’ expert testified that to a reasonable degree of medical probability, decedent would have survived ten years had she been treated early, even if she had stage 4 cancer in 2007. The jury awarded plaintiffs $548,911. The appellate court rejected defendant’s argument the doctor’s opinion was speculative, stating it was based on his experience and decedent’s medical history. The judgment was affirmed. (Uriell v. Regents of University of California (Cal. App. Fourth Dist., Div. 1; February 20, 2015) 234 Cal.App.4th 735 [184 Cal.Rptr.3d 79].)

Second Place Bidder States Cause Of Action For Intentional Interference With Prospective Economic Advantage.

Two companies sued defendant for intentional interference with prospective economic advantage, alleging defendant submitted lowest bids by paying workers less than the statutorily required prevailing wage as required by Labor Code sections 1770 and 1771. During a three-year period, defendant outbid plaintiffs on 23 public works projects totaling more than $14.6 million. Citing Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, [131 Cal.Rptr.2d 29, 63 P.3d 937], the Court of Appeal stated: “As Korea Supply suggests, a bidder on a government contract who submits a superior bid and loses out only because a competitor manipulated the bid selection process through illegal conduct has been the victim of actionable intentional interference.” The appellate court concluded: “[I]f the plaintiff alleges it was the second lowest bidder and therefore, would have otherwise been awarded the contract, because that fact gives rise to a relationship with the public agency that made plaintiff’s award of the contract reasonably probable.” (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (Cal. App. Second Dist., Div. 8; February 20, 2015) 234 Cal.App.4th 748 [184 Cal.Rptr.3d 279].)

Motion To Be Relieved From Dismissal Entered As Terminating Sanction.

Plaintiff failed to respond to discovery requests, and was ordered by the trial court to respond. When she did not, the trial court dismissed her complaint. Later, she moved pursuant to Code of Civil Procedure section 473(b), for relief, and the trial court denied the motion. On appeal, the appellate court reversed, finding plaintiff was entitled to relief. The appeals court stated: (1) With regard to the words “dismissal entered” in section 473(b), a judgment of dismissal as a terminating sanction qualifies; (2) With regard to the words “unless the court finds” in section 473(b), the phrase is ambiguous. What is required under the statute is an explicit finding by the court that denies mandatory relief. Here, the reporter’s transcript and the written order prepared by defense counsel do not contain the required finding; (3) Because plaintiff, herself, was not responsible for the terminating sanction, she is eligible for mandatory relief provided she satisfied the other statutory requirements; and (4) The words “in proper form” in section 473(b) means the application for relief must include a showing that verified discovery responses were delivered to opposing counsel before the hearing and those responses substantially comply with applicable requirements. (Rodriguez v. Brill (Cal. App. Fifth Dist.; February 20, 2015) 234 Cal.App.4th 715 [184 Cal.Rptr.3d 265].)

If You Don’t Like To Be Told What You Can Or Cannot Do, Don’t Move Into A Home With A Homeowners Association.

A homeowners association [HOA] asked the court to issue a preliminary injunction requiring a homeowner to remedy an unauthorized modification to the flooring in his upstairs condominium unit to reduce the transmission of noise to the unit below. Defendant contended hardwood floors were necessary in his unit because his wife is severely allergic to dust. The court issued the injunction and defendant appealed, claiming the HOA was required to engage in ADR prior to asking for an injunction. The Court of Appeal stated defendant had not shown any prejudice resulting from the HOA’s lack of compliance with the technical requirement for ADR, and otherwise found no abuse of discretion on the part of the trial court. (Ryland Mews Homeowners Assn. v. Munoz (Cal. App. Sixth Dist.; February 20, 2015) 234 Cal.App.4th 705 [184 Cal.Rptr.3d 163].)

Lanham Act Violated In Intellectual Property Case.

Plaintiffs are the children of celebrity Bob Marley who formed an entity to exploit the assets, rights and commercial interests of the now deceased Marley. Defendants purchased photographs of Marley from a photographer and produced Bob Marley T-shirts which were sold by Target, Walmart and other retailers. Plaintiffs sued defendant, alleging four causes of action. The federal district court granted summary judgment to defendants on the common law trademark infringement claim as well as the state law right of publicity claim. The two remaining claims, false endorsement under 15 U.S.C. § 1125(a) and trademark infringement under 15 U.S.C. § 1114, were tried to a jury. The jury awarded plaintiffs $300,000, and the court ordered defendants to pay disgorgement of profits payments of approximately $800,000. In a lengthy opinion, the Ninth Circuit affirmed, stating: “We conclude that the evidence presented at trial was sufficient for a jury to find Defendants violated the Lanham Act by using Marley’s likeness. Our narrow holding relies on the familiar principles that underlie celebrity false endorsement claims, and we reject Defendants’ contention that the application of these principles results in a federal right of publicity.” (Fifty-Six Hope Rd. Music, Ltd. v. A.V.E.L.A., Inc. (Ninth Cir.; February 20, 2015) 778 F.3d 1059.)

But I Don't Like Sports.

Cable television subscribers brought a class action for unfair competition based on rate hikes for carrying channels that broadcast Dodgers and Lakers games. In 2011, a cable television company paid the Lakers $3 billion for licensing rights to televise Lakers games for 20 years over two channels. Cable subscription rates rose by $5 a month. In 2013, the cable company paid the Dodgers $8 billion for the licensing rights to televise Dodgers games for 25 years, raising subscribers’ rates by another $4. In its lawsuit, plaintiffs allege more than 60 percent of the population does not follow sports and would not pay separately to watch Dodgers or Lakers games, and there was no valid reason for bundling these sports stations into their basic cable package, especially when there was no way for subscribers to opt out of paying the extra $9 a month. The trial court sustained defendants’ demurrers without leave to amend, and plaintiffs appealed. The appellate court affir med, noting federal statutes regulate these areas, unless there has been a fundamental change in the nature of service made without the subscriber’s express advance agreement, and that state and consumer protection statutes are preempted to the extent they target non-fundamental changes. (Fischer v. Time Warner Cable Inc. (Cal. App. Second Dist., Div. 8; February 23, 2015) 234 Cal.App.4th 784 [184 Cal.Rptr.3d 490].)

Pyrrhic Victory Against Nursing Facility.

In a wrongful death action against a skilled nursing facility, the jury found for the facility with regard to the health care issues. But the jury found for the daughter of the deceased on a health care records issues. It found the facility did not provide 1) "complete and accurate health records" and 2) "meaningful and informative nurses’ progress notes as often as the patient’s condition warrants." It found 468 violations of the first category, 72 in the second. It awarded $500 statutory damages for each "violation." (Health & Safe. Code section 1430, subdivision (b).) The trial court entered judgment against the facility for $270,000 as statutory damages. (§ 1430, subd. (b).) It awarded the daughter $841,842 in attorney fees and $26,327.45 in costs. The appellate court reversed in part and affirmed in part, holding patients may sue nursing facilities under § 1430(b), but statutory damages may not exceed $500 per action. With regard to the attorney fee award, the appellate court remanded the case for redetermination in light of its reversal of most of the statutory damages, since success or failure must be considered when deciding the amount of attorney fees. (Lemaire v. Covenant Care California, LLC (Cal. App. Second Dist., Div. 6; February 23, 2015) 234 Cal.App.4th 860 [184 Cal.Rptr.3d 121].)

Attorney Fees Awarded To Injured Plaintiff.

Plaintiff, an occupant of a mobile home, fell while walking across the common area of the mobile home park. A jury awarded plaintiff $311,899.67 to compensate him for his injuries. Following trial, plaintiff moved for an award of attorney fees under his lease agreement with the mobile home park, and the trial court denied his motion. The appellate court reversed, stating: “[W]e interpret an attorney fee provision in a lease agreement which allows the prevailing party in any action arising out of the homeowner’s tenancy, the agreement, or the provisions of the Mobilehome Residency Law (Civil Code section 798 et seq.) to recover reasonable expenses including attorney fees and costs. We conclude that a tenant’s fall while walking across a common area lawn arose out of the homeowner’s tenancy and entitled him to an award of attorney fees as the prevailing party in the action.” (Hemphill v. Wright Family, LLC (Cal. App. Fourth Dist., Div. 1; February 25, 2015) 234 Cal.App.4th 911 [184 Cal.Rptr.3d 326].)

Tell Me Again Why I Removed The Case To Federal Court?

This disability discrimination action, brought under California’s Fair Employment and Housing Act [FEHA] was initially filed in state court and removed to federal court by the defendant employer. Plaintiff’s claim is that his employer discriminated against him because of his ulcerative colitis and failed to accommodate him. Once in federal court, the defendant moved for summary judgment, and the trial court granted it. The Ninth Circuit discussed plaintiff’s evidence, submitted in opposition to the MSJ. Plaintiff’s declaration stated the employer’s general manager told him “if you’re going to stick with being sick, it’s not helping your situation. It is what it is. You’re not getting paid, and you’re not going to be accommodated.” Plaintiff also declared he was told word had come from the district general manager that plaintiff was “not going to be here anymore.” After noting the district court disregarded plaintiff’s evidence because it was self-serving, the Ninth Circuit stated: “[D]eclarations are often self-serving, and this is properly so because the party submitting it would use the declaration to support his or her position. [Citations.] The source of the evidence may have some bearing on its credibility, and thus, on the weight it may be given by the trier of fact. But that evidence is to a degree self-serving is not a basis for the district court to disregard the evidence at the summary judgment stage. … Here, [plaintiff’s] declaration and deposition testimony, albeit uncorroborated and self-serving, were sufficient to establish a genuine dispute of material fact on [the employer’s] discriminatory animus.” The Ninth Circuit added: “[I]t should not take much for plaintiff in a discrimination case to overcome a summary judgment motion. … Here, [plaintiff] presented several state law claims that deserved trial. It should not take a whole lot of evidence to establish a genuine issue of material fact in a disability discrimination case, at least where the fact issue on discrimination is genuine and the disability would not preclude gainful employment of a person working with accommodation.” (Nigro v. Sears, Roebuck & Co. (Ninth Cir.; Amended, April 10, 2015) 2015 U.S. App. LEXIS 5837, 31 Am. Disabilities Cas. (BNA) 449.)

Just Because You Sit On A State Board Doesn’t Mean You Enjoy Immunity From Antitrust Laws.

North Carolina's Dental Practice Act provides that the state’s Board of Dental Examiners is "the agency of the State for the regulation of the practice of dentistry," and its principal duty is to oversee the licensing of dentists. The Board issued cease and desist letters to nondentists who were cleaning teeth at a lower cost than dentists charge. The Federal Trade Commission [FTC] filed a complaint against the Board, alleging a concerted action to exclude nondentists from the teeth whitening market. An administrative law judge denied the Board’s claim of state-action immunity, and the FTC sustained that ruling, reasoning that if the Board had acted pursuant to a clearly articulated state policy to displace competition, the Board must be actively supervised by the State to claim immunity, which was not so in this case. The United States Supreme Court held that because a controlling number of the Board’s decisionmakers are active market participants in the occupation the Board regulates, the Board can invoke state-action immunity only if it was subjected to active supervision by the State and here that requirement was not met. (N.C. State Bd. of Dental Exam'rs v. FTC (U.S. Sup. Ct.; February 25, 2015) ___U.S.___ [135 S.Ct. 1101, 191 L.Ed.2d 35].)

Previously we reported:

CHP Not A Special Employer Of Freeway Tow Truck Driver.

A tow truck driver who contracted with a county, part of the California Highway Patrol Freeway Service Patrol [FSP program], collided with a car, injuring the driver and her infant son. The CHP moved for summary judgment in the subsequent lawsuit on the ground it was not the tow truck driver’s special employer and therefore, not responsible for his negligence. The trial court denied summary judgment and the CHP petitioned the Court of Appeal for extraordinary relief, based on the legislative intent behind the FSP program. After concluding there was no legislative intent to make the CHP liable as a special employer of FSP tow truck drivers, the appellate court granted a peremptory writ of mandate. (State ex rel. Dept. of California Highway Patrol v. Sup. Ct. (Mayra Alvarado) (October 15, 2013) 220 Cal.App.4th 612 [163 Cal.Rptr.3d 333] SUPERSEDED.)

Update after the California Supreme Court granted plaintiff’s petition for review:

The California Supreme Court stated: “We agree with the Court of Appeal that the FSP statutes, as written, are incompatible with a special employment relationship between CHP and tow truck drivers. However, this conclusion does not foreclose the possibility that CHP might act as a special employer in particular circumstances. The statutes authorize CHP to perform certain functions, but do not bar it from taking on other responsibilities. Our resolution of the question of law presented here does not rule out CHP‘s liability on the facts, which is a question beyond the scope of our review. Therefore, we reverse the Court of Appeal‘s judgment.” (State ex rel. Dept. of California Highway Patrol v. Sup. Ct. (Mayra Alvarado) (Cal. Sup. Ct.; February 26, 2015) 60 Cal.4th 1002 [184 Cal.Rptr.3d 354, 343 P.3d 415].)

Real Estate Agents' Agreement To Share Commissions.

The allegations are that two licensed real estate salespersons agreed to share commissions earned by either of them on certain sales of real property. One sued the other for breaching that agreement, and the trial court sustained the defendant’s demurrer without leave to amend, relying on defendant’s contention that Business and Professions Code section 10137 mandates that a broker be a party to every commission transaction and that agreements among agents to share commissions are illegal if not in writing and signed by the supervising broker. The Court of Appeal reversed, stating: "We hold that two licensed real estate agents may agree to share commissions earned under the circumstances we describe in this opinion." (Sanowicz v. Bacal (Cal. App. Second Dist., Div. 5; February 26, 2015) 234 Cal.App.4th 1027 [184 Cal.Rptr.3d 517].)

PAGA Claims Stayed Until Arbitration Of Other Claims Completed.

This is a wage and hour case containing a cause of action alleging plaintiff is suing in his representation capacity under the Labor Code's Private Attorney General Act of 2004 [Labor Code sections 2698-2699.5; PAGA]. In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 [173 Cal.Rptr.3d 289, 327 P.3d 129], our Supreme Court held the public policy behind the vindication of employees’ statutory protections must yield to the policy protecting agreements to arbitrate disputes involving interstate commerce. The Court of Appeal ruled the trial court must grant the petition to compel arbitration for plaintiff’s non-PAGA claims, but that because the issues subject to litigation under the PAGA might overlap those that are subject to arbitration of plaintiff’s individual claims, the trial court must order an appropriate stay of trial court proceedings pursuant to Code of Civil Procedure section 1281.4. The appeals court stated: “The stay’s purpose is to preserve the status quo until the arbitration is resolved, preventing any continuing trial court proceedings from disrupting and rendering ineffective the arbitrator’s jurisdiction to decide the issues that are subject to arbitration.” (Franco v. Arakelian Enterprises, Inc. (Cal. App. Second Dist., Div. 1; February 26, 2015) 234 Cal.App.4th 947 [184 Cal.Rptr.3d 501].)

Denial Of Asylum In The U.S.

To establish eligibility for asylum in the United States, a petitioner must prove that he or she is unable or unwilling to return to his or her country of origin because of persecution or a well-founded fear “on account of race, religion, nationality, membership in a political social group, or political opinion.” (8 U.S.C. §§ 1158(b)(1)(B)(i).) Here the petitioners seek asylum after police in Armenia detained, beat and threatened one of them after he was seen talking to a reporter following a confrontation with the city’s military chief of police. The U.S. Board of Immigration Appeals [BIA] denied the couple asylum because they did not demonstrate he was persecuted because of his political beliefs, but merely showed Armenian military police detained him because they thought he was speaking with a reporter to overthrow the Armenian government. The federal appeals court ordered the BIA to consider the matter again, next time analyzing whether the man was persecuted on account of his imputed political opinions. (Khudaverdyan v. Holder (Ninth Cir.; February 27, 2015) 778 F.3d 1101.)

Attorney Disqualitication.

In a writ proceeding, one party petitioned for extraordinary relief after the trial court denied its motion to disqualify the law firm representing the other side. The law firm previously represented another law firm in an attorney fee dispute, and in the present case, represents an expert seeking consulting fees arising out of the same underlying litigation as the attorney fee dispute. In granting extraordinary relief, the appellate court stated: “In the limited realm of cases featuring attorneys as parties opposed to their former clients, lawyers representing the attorney party must avoid participation in substantially related matters, whereby their access to privileged information in the former action would potentially serve as an advantage in the latter. The court did not have discretion to deny the disqualification motion on this record.” (Acacia Patent Acquisition, LLC v. Sup.Ct. (Chitranjan N. Reddy) (Cal. App. Fourth Dist., Div. 3; February 27, 2015) 234 Cal.App.4th 1091, [184 Cal.Rptr.3d 583].)

Blanket Enforcement Of Jessica's Law Hampers Supervision Of Sex Offenders.

Proposition 83, the Sexual Predator Punishment and Control Act aka Jessica’s Law, was passed by the voters in 2006. Jessica’s Law sought to "prevent sex offenders from living near where our children learn and play" by creating “predator free zones around schools and parks.” Petitioners in the present action are registered sex offenders on parole in San Diego County, and they allege the residency restrictions are unconstitutional in that they have prevented paroled sex offenders from residing in large areas of the county, including most the downtown and many residential parcels, which restricts many from living and associating with family members. Both the trial court and the Court of Appeal concluded blanket enforcement, without consideration of the individual case, constitutes arbitrary and oppressive official action. The California Supreme Court's opinion discusses a "most disturbing" by-product of enforcement in that it has led to greatly increased homelessness among registered sex offenders on parole in the county, which has hampered the surveillance and supervision of parolees, and "thereby thwarting the legitimate governmental objective behind the registration statute." Thus, the judgment of the Court of Appeal was affirmed. (In re Taylor (Cal. Sup. Ct.; March 2, 2015) 60 Cal.4th 1019 [184 Cal.Rptr.3d 682, 343 P.3d 867].)

No Coverage.

After a food company's frozen ground beef was ordered recalled by the Department of Agriculture [USDA], the food company made a claim under its Contamination Products Insurance policy issued by defendant insurers. Coverage was denied on various grounds, and the food company sued for breach of contract and bad faith. Finding no triable issues of fact, the trial court granted defendant insurers’ motion for summary judgment. On appeal, the battle was fought over whether the insurance policy covers ingredients obtained from a supplier and used in the food company’s products, and whether the food company had to show there was contamination or tampering with its product during or after manufacture. The majority in the Court of Appeal decision affirmed, concluding the policy is not ambiguous and holding "the policy's definition of what constitutes an insured product clearly does not encompass an ingredient obtained from a supplier." The dissenting justice stated: "[T]he more reasonable reading of the policy is that the product, and all of its ingredients, are insured for adulteration regardless of when the adulteration occurs. Thus, to the extent there are two reasonable interpretations, the policy is ambiguous and should be construed against the insurer; the summary judgment should be denied." (Windsor Food Quality Co., Ltd. v. Underwriters of Lloyds of London (Cal. App. Fourth Dist., Div. 2; March 3, 2015) 234 Cal.App.4th 1178 [184 Cal.Rptr.3d 477].)

Standard Review Can Make All The Difference.

The trial court dismissed a real property action for failure to join an indispensible party, the entity that performed all the allegedly defective engineering services, the Natural Resource Conservation Service [NRCS], a division of the United States Department of Agriculture. The trial court observed that the NRCS cannot be joint to the action because it is a Federal agency not amenable to being sued in state court. On appeal, plaintiffs argued the NRCS is a joint tortfeasor and hence not a necessary party as a matter of law. The appellate court affirmed, stating: “We need not decide whether the NRCS is a joint tortfeasor. Assuming for purposes of discussion, that it is a joint tortfeasor, the trial court did not abuse its discretion in concluding that the NRCS is a necessary party.” (Dreamweaver Andalusians, LLC v. Prudential Ins. Co. of America (Cal. App. Second Dist., Div. 6; March 3, 2015) 234 Cal.App.4th 1168 [184 Cal.Rptr.3d 735].)

Summary Judgment Reversed Because There Is A Potential For Coverage Under Umbrella Policy.

When she was 17 years old, plaintiff was invited to a party by several members of a college baseball team. She claims that upon her arrival, she was given shots of hard liquor in quick succession, and later was assaulted by an unknown number of men as she lay unconscious in a room. Three women who witnessed the assault attempted to help her, but, were prevented by men inside the room; eventually the women broke through and took plaintiff to the hospital. Some of the men in the room took videos, photographs and cheered while the assault took place. This action concerns the insurance coverage of one of the purported assailants, who claimed coverage under both his parents’ homeowners insurance policy and his parents’ personal umbrella policy. Both companies denied coverage. The purported assailant reached a settlement with plaintiff, assigning his rights under the policies to plaintiff. Plaintiff sought recovery of the judgment from the insurers pursuant to Insurance Code section 11580. Both insurance companies moved for summary judgment, and the trial court granted their motion. The appellate court affirmed the grant of summary judgment in favor of the insurer who issued the homeowners policy, but reversed with regard to the insurer who issued the umbrella policy because "the insurer failed to conclusively demonstrate its policy exclusions eliminated all potential for coverage." The reviewing court noted the umbrella policy did not set forth a requirement that a personal injury arise out of an accident in order for there to be coverage, and that "as a result, [plaintiff's] complaint, which alleged causes of action for false imprisonment, slander per se, and invasion of privacy, raised the potential for coverage under the umbrella policy's provision providing coverage for damages from an "occurrence" resulting in "personal injury." The court pointed out the "complaint suggests the possibility that [the purported assailant] may not have engaged in the sexual assault, but was present in the room while the assault took place and may have thereafter disparaged [plaintiff's] reputation by slandering her after the incident." (Gonzalez v. Fire Ins. Exchange (Cal. App. Sixth Dist.; March 4, 2015) 234 Cal.App.4th 1220 [184 Cal.Rptr.3d 394].)

Link to State Bar Section Rebates offer Private Prescriptive Easement Found.

Neighbors claim a prescriptive easement over land owned by a man who purchased his property and blocked the entrance to a drive which had been used as access to the neighbor’s property. The trial court found the neighbors had satisfied their burden of proving continuous, open and notorious use of the entrance for a five-year period. On appeal, the servient property owner contended no prescriptive easement could be found because the neighbors crossed over his property to use their own property for recreational purposes only. In affirming, the appellate court concluded that "Civil Code section 1009, which prevents the use of private property for recreational purposes by members of the public from ripening into a permanent right, is inapplicable to the facts of this case because [the dominant property owners] claim a private prescriptive easement for the purpose of accessing their own property." (Pulido v. Pereira (Cal. App. Third Dist.; March 5, 2015) 234 Cal.App.4th 1246 [184 Cal.Rptr.3d 754].)

Statute Says It’s Illegal To Sell Foie Gras, So Chef Gave It Away.

Foie gras is considered by some to be a food delicacy; it is made from the liver of a duck fattened by the use of force feedings. In 2004, after animal rights groups argued the production of foie gras involved cruelty to animals, the California Legislature enacted Health and Safety Code section 25982, banning the sale of foie gras effective July 1, 2012. In this action, an animal rights group sued a restaurant who served foie gras. Actually, when the restaurant served the foie gras, it was part of a tasting menu for which there was no separate charge, so in effect it was a gift from the chef. The restaurant argued it did not sell foie gras in violation of the statute, but gave it away. The trial court denied the restaurant’s motion to strike the action. The appellate court agreed with the trial judge, and concluded the action may proceed in the trial court, analogizing the situation to the California Supreme Court’s decision in Ennabe v. Manosa (2014) 58 Cal.4th 697, [168 Cal.Rptr.3d 440, 319 P.3d 201]. In Ennabe, a statute prohibited the sale of alcoholic beverages to an obviously intoxicated minor, and the court considered whether that defendant could be held liable where she supplied alcohol to a minor at a party, and the minor was charged a fee to enter the party, but not specifically charged for the alcohol. In the present foie gras case, the appellate court applied the same reasoning the Supreme Court applied in Ennabe, concluding it was immaterial that no separate price was charged for the foie gras. (Animal Legal Defense Fund v. LT Napa Partners LLC (Cal. App. First Dist., Div. 5; 2015) 234 Cal.App.4th 1270 [184 Cal.Rptr.3d 759].)

Insurance Company Waived Right To Rescind Policy

Five days after treatment at a breast center for a lump on her breast which proved to be cancerous as she continued her treatment, plaintiff applied for medical insurance. The questions on the application included whether she had "received any professional advice or treatment ... from a licensed health practitioner" or "had any symptoms" pertaining to "breast problems, breast implants, adhesion, abnormal bleeding, amenorrhea, endometriosis, fibroid tumors"; "been an inpatient or outpatient in a hospital, surgical center ... or other medical facility"; had any "abnormal laboratory results"; or had any "diagnosis, symptoms and/or health problems not mentioned elsewhere on this application, or that have not been evaluated by a physician, or have any complications or residuals remaining following any treatment, or been advised to have a physician exam, further testing, treatment or surgery which has not yet been performed ... ?" Plaintiff checked "no" to all the questions. At first the insurance company paid her medical claims, but 17 months after the policy had been in effect, the insurance company canceled the policy. The cancellation letter expressly stated the insurance company was electing to cancel coverage prospectively, rather than rescind the policy, and that any claims for covered services incurred prior to the cancellation would be covered. Later, plaintiff brought the present action against the insurance company for failing to pay her medical expenses. The trial court granted summary judgment in favor of the insurance company. The appellate court reversed, stating: "We hold that Blue Shield's September 2006 decision to cancel, rather than rescind her policy, its affirmation of policy coverage up to that date and assurance that it would pay for services covered prior to the cancellation, its retention of appellant's premiums, and its failure to assert a right to rescind until more than two years after it concededly had all the pertinent facts, constituted a waiver of its right to rescind as a matter of law." (DuBeck v. California Physicians' Service (Cal. App. Second Dist., Div. 4; March 5, 2015) 234 Cal.App.4th 1254 [184 Cal.Rptr.3d 743].)

Prerequiste Of Sexual Harassment Not Established.

Plaintiff prevailed in her employment action brought under California’s Fair Employment and Housing Act [FEHA; Government Code section 12900] because defendant did not take reasonable steps to prevent sexual harassment. In reversing the judgment, the appellate court stated: "We hold there cannot be a valid claim for failure to take reasonable steps necessary to prevent sexual harassment if, as here, the jury finds that the sexual harassment that occurred was not sufficiently severe or pervasive as to result in liability. A claim for failure to take reasonable steps necessary to prevent sexual harassment cannot prevail when the necessary element of sexual harassment is not established." (Dickson v. Burke Williams, Inc. (Cal. App. Second Dist., Div. 5; March 6, 2015) 234 Cal.App.4th 1307 [184 Cal.Rptr.3d 774].)

Denial Of Class Certification Reversed.

A retail business routinely recorded the zip codes of its customers who used their credit cards for payment. Plaintiff brought a class action, alleging violation of Civil Code section 1747.08, [the Song-Beverly Credit Card Act of 1971], which prohibits merchants from requesting and recording “personal identification information” as part of a credit card transaction. The trial court found the class was not ascertainable because each individual class member was not specifically identifiable from the business’s records so notice to the class could not be provided. The appellate court reversed, stating: "Where, as here the class describes a set of common characteristics sufficient to allow a member of that group to identify himself or herself as having a right to recover based on the description, and plaintiff proposed an objective method for identifying class members when that identification becomes necessary, there exists an ascertainable class." (Aguirre v. Amscan Holdings, Inc. (Cal. App. Third Dist., March 6, 2015) 234 Cal.App.4th 1290 [184 Cal.Rptr.3d 415].)

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.govPenalties Not Elements Of Causes Of Action That Need To Be Proven To Prevail On Summary Judgment.

The City of Los Angeles sought an abatement of a public nuisance against operators of medical marijuana clinics who were violating the law. One of the remedies sought by the City was an award of civil penalties. The trial court denied the City’s motion for summary judgment and summary adjudication, basing its ruling on its view that claims for penalties made under the statutory schemes involved are elements of the causes of action alleged. The appellate court granted the City’s petition for writ of mandate, stating: “We hold that the penalties which the People seek are among the remedies available to them rather than the elements of the causes of action which they allege… We therefore issue a writ of mandate… and remand the matter to the trial court to fully consider the People’s motion.) (People v. Superior Court (Cahuenga’s the Spot) (Cal. App. Second Dist., Div. 5; March 9, 2015) 234 Cal.App.4th 1360 [184 Cal.Rptr.3d 809].)

Insurer Not Obligated To Defend Or Indemnify In Light Of Intellectual Property Exclusion.

A famous inventor's estate alleged the commercial use of the inventor's name was not authorized after defendant manufactured and distributed several products using the name Buckyball, allegedly without permission or payment. Defendant tendered defense of the action to its insurance company. The insurance company agreed to defend under a reservation of rights and Cumis counsel [Civil Code section 2860] was appointed. The insurance company then brought an action for declaratory relief, naming both plaintiff and its insured as defendants. The trial court granted the insurance company's motion for judgment on the pleadings in the declaratory relief action; the judgment declared the insurance company had no obligation to defend or indemnify defendant. The appellate court agreed with the trial court that the policy's intellectual property exclusion precluded any obligation on the part of the insurer. (Alterra Excess & Surplus Ins. Co. v. Snyder (Cal. App. First Dist., Div. 2; March 9, 2015) 234 Cal.App.4th 1390 [184 Cal.Rptr.3d 831].)

Attorney Fees Incurred To Enforce A Judgment For Attorney Fees Obtained Under Anti-SLAPP Statute Recoverable As Costs.

The trial court denied a request for attorney fees incurred in enforcing a judgment for fees awarded for the successful defense of a SLAPP suit [Strategic Litigation Against Public Participation; Code of Civil Procedure section 425.16]. On appeal, the losing party argued she was entitled to a fee award pursuant to Code of Civil Procedure section 685.040, which authorizes an award for enforcement of judgments not only where provided for in a contract, but also in cases where such fees are otherwise provided by law. In reversing, the appellate court quoted from Ketchum v. Moses (2001) 24 Cal.4th 1122 [104 Cal.Rptr.2d 377, 17 P.3d 735]: “Under its provisions, a litigant entitled to costs for successfully enforcing a judgment is entitled to costs, but not attorney fees unless there is some other legal basis for such an award. Because Code of Civil Procedure section 425.16, subdivision (c), provides a legal right to attorney fees, they are a permissible item of costs,” clarifying that despite the statement’s location in a footnote, it is not dictum. The appellate court concluded: “Because the Supreme Court has already determined that attorney fees incurred in the enforcement of an anti-SLAPP attorney fee award are recoverable costs under [Code of Civil Procedure] section 685.040, both the trial court and we are bound by that determination.” (York v. Strong (Cal. App. Fourth Dist., Div. 3; March 10, 2015) 234 Cal.App.4th 1471 [184 Cal.Rptr.3d 845].)

Prejudgment Interest On Costs Not Permitted.

In a personal injury action, the trial court ordered prejudgment interest to be calculated on the entire judgment. On appeal, defendant argued that pursuant to Civil Code section 3291, prejudgment interest should have been awarded only on the damages that the jury awarded. In reversing, the appellate court stated: “We think it clear that the purpose of Civil Code section 3291 is to compensate plaintiffs for the loss of use of the money awarded for personal injury damages, not for the loss of use of money for costs.” (Bean v. Pacific Coast Elevator Corp. (Cal. App. Fourth Dist., Div. 1; March 10, 2015) 234 Cal.App.4th 1423 [185 Cal.Rptr.3d 63].)

Not Protected Activity Under Anti-SLAPP Statute.

A doctor brought an action against a hospital alleging both race and gender discrimination in several ways in different causes of action. The trial court granted the hospital’s anti-SLAPP motion, and the doctor appealed. The appellate court, while recognizing the hospital’s peer review process was involved in the doctor’s termination, reversed with regard to the causes of action for harassment and IIED because the claims do not arise from protected activity under Code of Civil Procedure section 425.16. (DeCambre v. Rady Children’s Hospital-San Diego (Cal. App. Fourth Dist., Div. 1; March 11, 2015) (As Mod. April 2, 2015) 235 Cal.App.4th 1 [184 Cal.Rptr.3d 888].)

Inaccurate Record Of Debt Collection Efforts.

A lender who lends money used to purchase a parcel of property and who holds a junior lien on that property cannot sue the borrower personally for the loan balance if the senior lienholder who also contributed to the purchase of the property forecloses on the property but does not collect enough from the foreclosure sale to pay off the junior lienholder. [Former Code of Civil Procedure section 580b]. But can the borrower sue the junior lienholder for trying to collect a no-longer-enforceable debt if the lienholder’s collection efforts inaccurately imply that the debt is still enforceable? The appellate court concluded the borrower may sue the debt collector under the Fair Debt Collection Practices Act [FDCPA; 15 U.S.C. § 1692 et seq.]; and may sue the junior lienholder or its debt collector under the Rosenthal Fair Debt Collection Practices Act, [Civil Code section 1788 et seq.] and Unfair Competition Law [Business and Professions Code section 17200 et seq.]. However, the borrower may not sue for violations of the Consumer Legal Remedies Act [CLRA; Civil Code section 1750 et seq.]. (Alborzian v. JPMorgan Chase Bank, N.A. (Cal. App. Second Dist., Div. 2; March 12, 2015) 235 Cal.App.4th 29 [185 Cal.Rptr.3d 84].)

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