Litigation Section News:
Eileen C. Moore, Associate Justice
California Court of Appeal, Fourth District
Table of Contents of This Issue
Small Counties and Peremptory Challenges of Judges.
Code of Civil Procedure § 170.6, subdivision (a)(20) states that a peremptory challenge of a judge must be filed within 30 days after the initial appearance if the county is authorized to have only one superior court judge, but the statute was written prior to court unification, when California still had municipal courts. Today, each of the 58 counties has at least two superior court judges. In the present case, the county had assigned only one judge to a particular branch court and the party did not abide by the 30-day deadline to file an affidavit against that sole judge, so the court denied the peremptory challenge. Finding the challenge was timely filed, the Court of Appeal reversed, stating: “We conclude a branch of the superior court with only one assigned judge is not a court for which a single judge is authorized for purposes of the one-judge court deadline under section 170.6.” (Jones v. Superior Court (Cal. App. 3rd Dist., Apr. 8, 2016) 246 Cal.App.4th 390.) http://www.courts.ca.gov/opinions/documents/C080359.DOC
Supposedly Wrong Writ Was the Right Writ.
A prisoner at a California prison appeals from an order sustaining a demurrer to his petition for a writ of mandate. The petition sought an order directing personnel at the prison to process his inmate grievances in accordance with applicable regulations. The trial court determined that habeas corpus relief was a more appropriate remedy and dismissed the prisoner’s mandamus petition. In reversing the sustaining of the demurrer to the prisoner’s petition, the Court of Appeal said, “The ordinary way to compel the Department of Corrections and Rehabilitation (CDCR) to process inmate grievances as required by its own regulations is a writ of mandate, not a writ of habeas corpus. [Citation.] In comparison, mandamus is the traditional remedy to compel a public official to perform a legal duty. Thus, [the prisoner] stated a claim for a writ of mandate, habeas corpus was not the more appropriate remedy, and the demurrer should have been overruled.” (Villery v. Department of Corrections & Rehabilitation (Cal. App. 5th Dist., Apr. 8, 2016) 246 Cal.App.4th 407.) http://www.courts.ca.gov/opinions/
Insurance Policy Language in CGL Policy.
Two insurers shared indemnification costs to settle claims made against mutual insureds in underlying construction defect litigation brought by third parties. But one insurer, defendant here, refused to share the costs to defend the insureds in the underlying litigation. The other insurer, plaintiff, paid all defense costs and now seeks equitable contribution. In ruling on cross-motions for summary judgment/adjudication (Code Civ. Proc., § 437c), the trial court concluded defendant had no duty to defend the insureds in the underlying litigation because its insurance policy expressly stated it had a duty to defend provided no “other insurance” afforded a defense, and plaintiff’s policy did afford a defense. Plaintiff appealed. In reversing, the Court of Appeal concluded defendant’s “other insurance” clause cannot be enforced in an equitable contribution action between successive primary insurers and that “enforcement of such a clause in a primary CGL [commercial general liability] policy would violate public policy.” (Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co. (Cal. App. 3rd Dist., Apr. 11, 2016) 246 Cal.App.4th 418.) http://www.courts.ca.gov/opinions/documents/C072500.DOC
You Can’t Fool Uncle Sam.
A hospital attempted an assets-only purchase of another hospital; both hospitals are Medicare-approved acute care facilities. The purchasing hospital attempted to avoid potential liabilities of the purchased hospital, which liabilities included mandated reimbursements to Medicare for any previous overpayments made to the purchased hospital. The U.S. Department of Health and Human Services duly determined the purchasing hospital was not entitled to bill Medicare for patient services until it had a provider agreement of its own, blocking it from receiving $1.4 million for services rendered to Medicare patients. Both an administrative law judge and the federal trial judge ruled against the purchasing hospital in its action against the Department for remuneration. The Ninth Circuit affirmed, stating the whole situation could have been avoided if the purchasing hospital had assumed the liabilities as well as the assets of the purchased hospital. (Mission Hospital Regional Medical Center v. Burwell (9th Cir., Apr. 11, 2016) 2016 WL 1399335.) https://cdn.ca9.uscourts.gov/datastore/opinions/2016/04/11/13-56264.pdf
Two intoxicated men in a bar threatened and punched plaintiff, causing serious injuries. Plaintiff alleged the bar negligently allowed the two intoxicated persons to enter and remain at the bar. Plaintiff and his attorney signed a formal “Settlement Agreement and Release of All Claims,” in which, in exchange for a $40,000 payment, plaintiff provided a general release of all claims against the bar. Pursuant to Code of Civil Procedure § 664.6, plaintiff filed a motion for entry of judgment and enforcement of the settlement. The bar opposed the motion on that ground that liens had been imposed against the settlement amount by the federal government, based on Medicare payments, and by the State of California, based on payments made to plaintiff under its Victims of Crime program. The bar said it was willing to pay the settlement amount immediately if plaintiff would accept a check made out to him and both the lienholders. Plaintiff’s lawyer argued the terms of the settlement agreement state that plaintiff and his counsel will “negotiate, satisfy, and dispose of all liens,” but it does not state that they must do so before receiving payment. The bar argued that it required specific written instructions from Medicare and the California Victims of Crime program before it would issue separate checks to plaintiff and each lienholder. The trial court granted plaintiff’s motion to enforce the settlement, and ordered the bar to pay $2,200 for plaintiff’s attorney fees in bringing the motion. The bar filed the present appeal. In affirming the trial court, the Court of Appeal noted the parties had agreed that if plaintiff failed to honor his obligations and the bar was sued, the settlement agreement provided that plaintiff would indemnify the bar. (Karpinski v. Smitty’s Bar, Inc. (Cal. App. 1st Dist., Div. 2, Apr. 12, 2016) 246 Cal.App.4th 456.) http://www.courts.ca.gov/opinions/documents/A143381.DOC
Failed Attempt to Buy Off a Named Plaintiff and Have Class Action Dismissed.
Plaintiff filed a class action against an insurance company alleging that he received unsolicited automated telephone calls to his cellular telephone in violation of the Telephone Consumer Protection Act. The insurance company deposited $20,000 in full settlement of plaintiff’s individual monetary claims in an escrow account, pending entry of a final court order or judgment directing the escrow agent to pay the tendered funds to plaintiff, requiring the insurance company to stop sending nonemergency telephone calls and short message service messages to plaintiff in the future, and dismissing the action as moot. A federal district court declined to dismiss the action and the insurance company appealed. In affirming, the Ninth Circuit stated: “Under Supreme Court and Ninth Circuit case law, a claim becomes moot when a plaintiff actually receives complete relief on the claim, not merely when that relief is offered or tendered.” (Chen v. Allstate Insurance Company (9th Cir., Apr. 12, 2016) 2016 WL 1425869.) https://cdn.ca9.uscourts.gov/datastore/opinions/2016/04/12/13-16816.pdf
Insufficient Evidence To Support Defense Verdict Based on Sophisticated User Defense.
Plaintiff brought an action against a number of manufacturers and suppliers of asbestos-containing products after he was diagnosed with mesothelioma, a cancer uniquely associated with exposure to asbestos. Only one manufacturer remained in the case by the time of verdict. A jury decided plaintiff was a sophisticated user and found in favor of the manufacturer. In his appeal, plaintiff contended that by virtue of his position, training, experience and skill, there was insufficient evidence to prove he knew or should have known of the health risks posed by working with or near the asbestos-containing products. The Court of Appeal reversed the verdict, stating the defendant did not submit any expert testimony of peer group knowledge about the dangers of asbestos, while plaintiff testified he had no training, experience, knowledge or skill regarding the risks involved. Therefore, there was not sufficient evidence to support the verdict. (Moran v. Foster Wheeler Energy Corp. (Cal. App. 2nd Dist., Div. 4, Apr. 13, 2016) 246 Cal.App.4th 500.) http://www.courts.ca.gov/opinions/documents/B261682.DOC
Transfer of Property from One Trust to Another Valid.
The daughter of a decedent filed a petition to confirm the validity of the transfer of a piece of real property into a 2009 trust. The 2009 Trust states, "I transfer to my Trustee the property listed in Schedule A, attached to this agreement," and lists the subject Property in Schedule A. The 2009 Trust is signed by decedent as grantor. Decedent’s grandson filed an opposition to the petition, contending that decedent had failed to execute a deed transferring the property to the trust, indicating that decedent was acting as the trustee of a 1985 trust at the time of the purported transfer to the 2009 trust. The trial court entered an order denying the daughter’s petition. The Court of Appeal reversed, stating, “We conclude that the language in the 2009 Trust . . . is sufficient to convey the . . . Property to the 2009 Trust and that [decedent] was not required to execute a separate deed in order to effectuate such conveyance. (Carne v. Worthington (Cal. App. 4th Dist., Div. 1, Apr. 13, 2016) 246 Cal.App.4th 548.) http://www.courts.ca.gov/opinions/documents/D067756.DOC
Terminating Sanctions Should Not Be Initial Remedy.
Plaintiff alleges a church elder sexually molested him as a child. He filed an action against the church’s national organization asserting several theories of relief, including failure to warn, negligent supervision, and negligent hiring/retention. The trial judge found that a certain individual was a “managing agent” of the church and compelled that person’s deposition. The trial court also ordered the production of certain documents in the church’s files relating to child sexual abuse. The church failed to comply with the orders, and the trial court struck its answer and entered a default against the church. The Court of Appeal reversed, stating the record does not support the trial court’s conclusion that the designated individual was a managing agent. The appellate court also found that, under the particular circumstances of the case, the trial court “erred in issuing terminating sanctions as the initial remedial measure without first attempting to compel compliance with its discovery orders by using lesser sanctions and/or by imposing evidentiary or issue sanctions.” (Lopez v. Watchtower Bible & Tract Society of New York, Inc. (Cal. App. 4th Dist., Div. 1, Apr.14, 2016) 246 Cal.App.4th 566.) http://www.courts.ca.gov/opinions/documents/D066388.DOC
“Today, Education Is Perhaps The Most Important Function of State and Local Governments,” Brown v. Board of Education (1954) 347 U.S. 483.
According to plaintiffs, nine students attending California public schools, certain Education Code provisions, which govern how K-12 public school teachers obtain tenure, how they are dismissed, and how they are laid off on the basis of seniority, violate the California Constitution’s guarantee that all persons enjoy the “equal protection of the laws” (Cal. Const., art. I, § 7, subd. (a)). The matter went to trial. After hearing eight weeks of evidence, the trial court issued a ruling declaring five sections of the Education Code—§§ 44929.21, subdivision (b), 44934, 44938, subdivisions (b)(1) and (b)(2), 44944, and 449551—unconstitutional and void. In reversing the judgment of the trial court, the Court of Appeal stated, “Plaintiffs failed to establish that the challenged statutes violate equal protection, primarily because they did not show that the statutes inevitably cause a certain group of students to receive an education inferior to the education received by other students. Although the statutes may lead to the hiring and retention of more ineffective teachers than a hypothetical alternative system would, the statutes do not address the assignment of teachers; instead, administrators—not the statutes—ultimately determine where teachers within a district are assigned to teach. Critically, plaintiffs failed to show that the statutes themselves make any certain group of students more likely to be taught by ineffective teachers than any other group of students.”(Vergara v. State of California (Cal. App. 2nd Dist., Div. 2., Apr.14, 2016) 246 Cal.App.4th 619.)
No Showing Americans With Disabilities Act Violated.
Plaintiff worked full time as a bookkeeper for a small church parish. When she went on sick leave, the pastor took over her duties and realized they could be performed by a part-time bookkeeper. When plaintiff returned to work without limitations, the pastor offered her the new part-time position, which she declined. Plaintiff brought an action against the employer alleging claims under the Americans with Disabilities Act of 1990 for disability discrimination, disparate treatment, and reasonable accommodation. The federal trial judge granted summary judgment to the employer and the Ninth Circuit affirmed, stating as to the disability discrimination and disparate treatment claims, the ADA “defines discrimination ’to include an employer’s failure to make ”reasonable accommodation to the known physical or mental limitations,” ‘ “ and plaintiff did not show that a discriminatory reason more likely than not motivated defendant. (Mendoza v. The Roman Catholic Archbishop of Los Angeles (9th Cir., Apr. 14, 2016) 2016 WL 1459214.) http://cdn.ca9.uscourts.gov/datastore/opinions/2016/04/14/14-55651.pdf
Court May Not Review Content When Attorney-Client Privilege Is Alleged.
In a motion to disqualify counsel, the trial court reviewed the content of communications and determined they were not protected by the attorney-client privilege. The Court of Appeal reversed, stating “A court  may not review the contents of a communication to determine whether the attorney-client privilege protects that communication. The attorney-client privilege is an absolute privilege that prevents disclosure, no matter how necessary or relevant to the lawsuit. The privilege attaches to all confidential communications between an attorney and a client regardless of whether the information communicated is in fact privileged. . . . Once the proponent makes a prima facie showing of a confidential attorney-client communication, it is presumed the communication is privileged and the burden shifts to the opponent to establish waiver, an exception, or that the privilege does not for some other reason apply. The opponent may not rely on the communications content to make that showing.” (DP Pham, LLC v. Cheadle (Cal. App. 4th Dist., Div. 3, Apr. 18, 2016) 246 Cal.App.4th 653.) http://www.courts.ca.gov/opinions/documents/G050964.DOC
The Kids May Not Be Alright After All; Their College Funds Are Not Exempt From Collection Efforts.
A judgment debtor sought declaratory relief that his investment accounts valued at over a half million dollars, and set aside for education of his children, were exempt from collection pursuant to CCP § 704.115, the California statute that exempts private retirement plans. Section 529 of the Internal Revenue Code creates a narrow exemption from federal income taxes for money that is earned as part of a “qualified tuition program.” Under this exemption, an individual may contribute cash, after paying income taxes on it, into a 529 savings account; the individual may later withdraw money from that account—without having to pay any income tax on the account’s earnings—if that money is used to pay the “qualified higher education expenses” of a relative. The Court of Appeal noted that at least 27 states have exempted 529 savings accounts from levy by creditors, but California is not one of them. The appellate court stated that exemptions are creatures of statutes and cannot be enlarged by the courts, and that, in the present case, the debtor requests the court to create a brand new exemption. But the Court of Appeal decided to leave that task to the Legislature. (O’Brien v. AMBS Diagnostics, LLC (Cal. App. 2nd Dist., Div. 2, Apr. 21, 2016) 2016 WL 1612875.) http://www.courts.ca.gov/opinions/documents/B263364.DOC
Employer Bears Burden Regarding Continuous Employment in ERISA Claim.
Two different pension plans govern a man’s eligibility for a pension benefit. The man brought an action for declaratory relief in federal court that he is entitled to a pension, and prayed for statutory penalties. Defendants argued the man did not establish he was a participant under a particular pension plan. The federal trial judge entered judgment for the defendants. In reversing the judgment and remanding the matter back to the district court, the Ninth Circuit stated: “This case ultimately is about burdens—to qualify for his pension, must a former employee who quit working for the company more than twenty-five years ago decipher the corporate structure of his former employer from documents that were not disclosed to him? Should he have saved all of his pay stubs in the off chance that his employer would demand proof that he met the hours of requirement for obtaining a pension? Or should the corporate defendant bear that load? ERISA, our precedent and common sense dictate that the corporate defendant should not lay that arduous task at the feet of former employees. To hold otherwise would essentially reward Lucy for pulling the football away from Charlie Brown, something that we do not believe Congress intended when it enacted ERISA.” (Estate of Barton v. ADT Security Services Pension Plan (9th Cir., Apr. 21, 2016) 2016 WL 1612755.) https://cdn.ca9.uscourts.gov/datastore/opinions/2016/04/21/13-56379.pdf
Purchaser Of Used Car Has Standing To Bring Action For Violating Consumer Laws When Certification Document Content Deficient, But Here The Content Was Not Deficient.
Defendant CarMax Auto Superstores California LLC (CarMax) advertises and sells cars as "certified" used vehicles. It sold a certain 2008 used Jeep Wrangler (the Jeep) to plaintiff. CarMax had promoted the Jeep as a certified used vehicle, inspected the Jeep, conducted some repairs, and ultimately placed a signed Certified Quality Inspection document (the CQI Certificate) in the Jeep’s glove box. The CQI Certificate remained in the glove box at all relevant times. Several months after plaintiff purchased the Jeep, she drove it through a deep puddle and the engine was so severely damaged that it had to be replaced. She thereafter demanded (among other things) that CarMax rescind the purchase agreement and buy back the Jeep. When CarMax rejected her demands, she filed this action alleging CarMax violated Vehicle Code § 11713.18 because the CQI Certificate was deficient in its content and CarMax’s method of delivery to her did not comply with its duties under section 11713.18. The trial court concluded plaintiff lacked standing under the CLRA (Consumer Legal Remedies Act; Civ. Code, § 1750) or UCL (Unfair Competition Law; Bus. & Prof. Code, § 17200 et seq.). In affirming, the Court of Appeal held that when a vehicle marketed and sold as certified has been mislabeled, a buyer who establishes he/she would not have purchased the vehicle absent that “certified” label has standing to pursue claims for violation of the CLRA and UCL, but rejected plaintiff’s claim the certificate was deficient. (Brooks v. CarMax Auto Superstores California, LLC (Cal. App. 4th Dist., Div. 1, Apr. 21, 2016) 2016 WL 1615560.) http://www.courts.ca.gov/opinions/documents/D067491.DOC
Summary Judgment Reversed in Wage and Hour Case.
In a wage and hour case alleging violations of the Labor Code with regard to rest breaks for employees, the trial court granted the employer’s motion for summary judgment. In reversing, the Court of Appeal concluded that plaintiff’s declaration raised triable issues precluding dismissal, explaining: “As a nonexpert witness, appellant was entitled to provide testimony grounded in his experience and his perceptions as an E.M.E. employee regarding workplace conditions and the temporal length of activities. Appellant’s declaration thus raised triable issues whether implementing the preferred schedule would be burdensome to E.M.E.” Regarding another issue, in his opposing papers, the plaintiff submitted an executed declaration in Spanish and a translation in English, unaccompanied by a declaration certifying the translation’s accuracy. The employer did not object to the lack of certification in the trial court, but raised the issue on appeal. In finding the employer forfeited the argument by not raising it below, the appellate court explained: “[B]ecause a translator’s failure to state under penalty of perjury that a translation is accurate does not render the underlying testimony inadmissible per se, a party must assert a timely challenge to the translation. [Citation.] The function of that rule is to provide an opportunity before the trial court to correct the deficiency regarding the translation. [Citation.] As E.M.E. asserted no pertinent objection, appellant was denied any such opportunity.” (Rodriguez v. E.M.E., Inc. (Cal. App. 2nd Dist., Div. 4, Apr. 22, 2016) 2016 WL 1613803.) http://www.courts.ca.gov/opinions/documents/B264138.DOC
Digital Signature on Arbitration Agreement.
Plaintiff was a doctor working at Southern California Permanente Medical Group (Kaiser). The pre-hiring documents were signed online. “The Employee Physician Contract sets forth the terms and conditions of the employment relationship between [plaintiff] and [Kaiser]. Section XII, titled ’Dispute Resolution and Mandatory Binding Arbitration,’ states: ’Physician and [Kaiser] agree to follow the Dispute Resolution Procedure, Rules and Regulations, section 1I, a copy of which is attached.’ The last section, immediately above the signature block, contains an acknowledgement by the signing physician that he or she has read the contract and agrees to its terms, ’including those set forth in Section XII herein regarding internal dispute resolution and arbitration.’ The physician signature line contains the typed name [of plaintiff] and the date May 22, 2011 at 3:15 p.m. The next line lists an IP address purportedly identifying the location where the document was signed. The contract also was electronically signed by [Kaiser’s] Area Medical Director on May 3, 2011.” Kaiser submitted copies of all the documents to the court in its petition to compel arbitration. Plaintiff opposed, arguing that Kaiser failed to properly authenticate his signature. While plaintiff recalled signing the employment contract, he does not recall signing an arbitration agreement. He declared: “I specifically recall that I typed out my name and submitted my electronic signature only once—when I signed the employment contract.” Kaiser submitted a supplemental declaration explaining the electronic signature process for the arbitration agreement “could only have been placed on the signature pages of the employment agreement and the [arbitration agreement] by someone using [plaintiff’s] unique user name and password.” The trial court struck the supplemental declaration, finding it was filed untimely because it was not in the moving papers. The petition to compel arbitration was denied. The Court of Appeal reversed, stating: “[W]e conclude that defendants here met their initial burden by attaching to their petition a copy of the purported arbitration agreement bearing [plaintiff’s] electronic signature. Once [plaintiff] challenged the validity of that signature in his opposition, defendants were then required to establish by a preponderance of the evidence that the signature was authentic.” (Espejo v. Southern California Permanente Medical Group (Cal. App. 2nd Dist., Div. 4, Apr. 22, 2016) 2016 WL 1613487.) http://www.courts.ca.gov/opinions/documents/B262717.DOC
“I’m A Warrior…Of the Jarhead Clan,” Jake, A Character In The Film Avatar.
Avatar is a science fiction film directed by one of the defendants in this lawsuit, James Cameron. Set in the future on Pandora, a moon of a fictional gas giant planet, it explores a world of flying mountains and lush bioluminescent rainforests teeming with exotic flora and fauna and is inhabited by an indigenous species of humanoids—10-foot-tall, blue-skinned, long-tailed, preternaturally strong beings living in harmony with their natural surroundings and worshipping their deity “Eywa.” Pandora is also occupied by humans who mine a valuable mineral called “unobtainium” used on Earth. The film begins as Jake Sully, a 22-year-old paraplegic ex-Marine, is brought to Pandora as an avatar operator. Between 1996 and 1998, plaintiff, a 3-D computer animator, wrote a science fiction short story entitled KRZ 2068 based on Joseph Conrad’s classic story Heart of Darkness (1899). In 1998, plaintiff and his wife created a business proposal surrounding KRZ to finance the project. In early 2000, plaintiff’s agent contacted a development executive at defendant Lightstorm about KRZ, and he, plaintiff, the Lightstorm employee, and another independent producer met at the Lightstorm offices to discuss plaintiff’s project, a copy of which was provided to Lightstorm. When Avatar was produced, plaintiff sued Lightstorm and Cameron alleging they used elements of KRZ in Avatar and made misrepresentations and false promises. The trial court granted defendants’ motion for summary judgment on the ground that Cameron independently created Avatar. In affirming, the Court of Appeal held plaintiff’s claim fails, stating there is no similarity between the two projects as a matter of law. (Ryder v. Lightstorm Entertainment, Inc. (Cal. App. 2nd Dist., Div. 8, Apr. 22, 2016) 2016 WL 1615574.) http://www.courts.ca.gov/opinions/documents/B254922.DOC
Workers’ Comp Decision Annulled.
An employee was working as a live-in maintenance supervisor for an apartment complex. As he was walking in the rain from one building to another within the complex, he slipped and fell on a slippery concrete walkway, sustaining serious injuries including a fractured pelvis. He subsequently had hip, knee, ankle and foot surgeries. Among his claims, he sought compensation for a psychiatric injury arising from the accident, and a psychiatric evaluator concluded he suffered a psychiatric disability as a result of the accident, including depression, difficulty sleeping and panic attacks. The administrative law judge found in favor or the worker for his physical injuries but not on his psychiatric claim. The Workers’ Compensation Appeals Board reversed, finding the psychiatric injury was caused by an extraordinary employment condition and thus was not barred by Labor Code § 3208.3(d), which provides for recovery of a psychiatric claim if an employee has been employed for at least six months. Here, the employee had only been employed for 72 days. However, section 3208.3 does permit recovery for a short-time employee if the psychiatric injury is “caused by a sudden and extraordinary employment condition.” The employer’s insurer appealed the Board’s decision. The Court of Appeal reversed, concluding the accident was not extraordinary within the meaning of §3208.3(d). (Travelers Casusalty & Surety Co. v. Workers' Compensation Appeals Board (Cal. App. 1st Dist., Div. 4, Apr. 22, 2016) 2016 WL 1613459.) http://www.courts.ca.gov/opinions/documents/A146538.DOC
The SHU (Security Housing Unit aka Solitary Confinement).
A state prison inmate has been in solitary confinement for more than a decade, based on findings of gang affiliation. He refused to eat over a three-day period coincident with a larger hunger strike and work stoppage by inmates protesting our state prisons’ solitary confinement practices. Prison authorities ruled that, by his refusal to eat, he violated § 3005(a) of the California Code of Regulations, which states “Inmates and parolees shall obey all laws, regulations, and local procedures, and refrain from behavior which might lead to violence or disorder, or otherwise endangers facility, outside community or another person.” The prisoner was assessed 90 days of conduct credits. In his petition for a writ of habeas corpus, the inmate contends, among other things, that there is not sufficient evidence to support this disciplinary ruling. The Court of Appeal granted the inmate’s petition and reversed the disciplinary punishment, finding a lack of evidence the inmate’s refusal to eat for three days endangered the facility. (In re Gomez (Cal. App. 1st Dist., Div. 2, Apr. 22, 2016) 2016 WL 1615657.) http://www.courts.ca.gov/opinions/documents/A142470.DOC
Post-Verdict Battles Over a 998 Offer and Costs.
A 17-year-old ran a stop sign and struck plaintiff on his motorcycle. The car was owned by the teenager’s father, and plaintiff sued father and child. Defendants served a Code of Civil Procedure § 998 offer to settle the action for $130,000. Neither the offer itself nor any other communication from counsel for the defendants purported to apportion the $130,000 offer amount between them. Nor did any communication from defendants’ counsel ever disclose any of the terms that they planned to put into the “written settlement agreement” required as a condition to accepting their offer. The offer lapsed, and the case proceeded to trial. The jury returned a verdict for less than $130,000. The trial court denied plaintiff’s objection to the validity of the offer. In reversing, the Court of Appeal held the offer improperly contains a request for a “settlement agreement,” stating “here, the required ‘settlement agreement’ was not described or revealed, [plaintiff] having no understanding what he would have to agree to.” With regard to plaintiff’s appeal of the trial court’s granting defendants’ motion to tax his costs incurred in participating in mediation and delivering papers in connection with motions, the Court of Appeal noted the trial court’s ruling states those expenses “are not allowed.” The appellate court reversed because the trial court never exercised its discretion and ordered the trial court to conduct a new hearing. (Sanford v. Rasnick (Cal. App. 1st Dist., Div. 2, Apr. 25, 2016) 2016 WL 2585250.) http://www.courts.ca.gov/opinions/documents/A145704.DOC
Probate Court Does Not Have Authority To Order Accounting Of Irrevocable Trust For The Period It Was Revocable.
The law is already clear that once a settler of a revocable trust appoints someone other than himself as trustee and then dies, and the trust becomes irrevocable, the remainder beneficiaries have standing to sue the trustee for breaches of fiduciary duty committed during the period of revocability. (In re Estate of Giraldin (2012) 55 Cal.4th 1058.) The present case involves a situation where the beneficiaries petitioned the probate court for an accounting after the settler died and the trust became irrevocable, but in this case the settler acted as the trustee and there is no claim of incapacitation or undue influence during the period of revocability. Under these circumstances, the Court of Appeal concluded the probate court does not have authority to order the trustee to provide an accounting or information regarding trust assets and transactions while the trust was still revocable. (Babbitt v. Superior Court (Cal. App. 2nd Dist., Div. 7, Apr. 25, 2016) 2016 WL 1636303.) http://www.courts.ca.gov/opinions/documents/B263917.DOC
Passing The Buck In Mortgage Loans May Not Work Anymore.
Plaintiffs obtained a $650,000 adjustable rate loan secured by a deed of trust on their residence. When their interest rate adjusted upward, they struggled to make their loan payments. They were unsuccessful in obtaining a loan modification with their then-loan servicer, a bank, and fell behind in their payments. Plaintiffs sued the bank to prevent foreclosure and to collect monetary damages. They also sued another loan servicer, the trustee of the securitized trust that owns the loan, and the substituted trustee. The trial court sustained the demurrer of the two loan servicers and dismissed allegations against the other defendants in a motion for judgment on the pleadings. The Court of Appeal reversed, holding, “when a lender acquires by assignment a loan being administered by a loan servicer, the lender may be liable to the borrower for misrepresentations made by the loan servicer, as the lender’s agent, after that assignment, and, a loan servicer may owe a duty of care to a borrower through application of the Biakanja factors, even though its involvement in the loan does not exceed its conventional role.” Biakanja v. Irving (1958) 49 Cal.2d 647 “’is the leading California case discussing whether a legal duty should be imposed absent privity of contract.’ “In Biakanja, the California Supreme Court held that whether the defendant in a specific case ‘will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors,’ including: (1) ‘the extent to which the transaction was intended to affect the plaintiff,’ (2) ‘the foreseeability of harm to [the plaintiff],’ (3) ‘the degree of certainty that the plaintiff suffered injury,’ (4) ‘the closeness of the connection between the defendant’s conduct and the injury suffered,’ (5) ‘the moral blame attached to the defendant’s conduct,’ and (6) ‘the policy of preventing future harm.’ “ (Daniels v. Select Portfolio Servicing, Inc. (Cal. App. 6th Dist., Apr. 26, 2016) 2016 WL 1688595.) http://www.courts.ca.gov/opinions/documents/H040487.DOC
No Inverse Condemnation In 90210.
Plaintiffs are the owners of homes in Beverly Hills. They filed an inverse condemnation action against the City of Beverly Hills, seeking damages and injunctive relief based upon impairment of the views from their backyards by coastal redwood trees the City planted in Roxbury Park in 1989. Their height is now starting to block the previously unobstructed view plaintiffs had of hills, the Hollywood sign, the Griffith Observatory and downtown Los Angeles. The trial court sustained the City’s demurrer without leave to amend. The Court of Appeal affirmed, stating: “We affirm because plaintiffs allege only impairment of their views and a speculative risk of fire danger, neither of which constitutes a taking or damaging of their property.” (Boxer v. City of Beverly Hills (Cal. App. 2nd Dist., Div. 1, Apr. 26, 2016) 2016 WL 1678864.) http://www.courts.ca.gov/opinions/documents/B258459.DOC
Free Speech Right Even When Not Exercising Right To Free Speech.
A police detective, with the intention of delivering a political campaign yard sign to his bedridden mother, was observed speaking to staff at a politician’s distribution point, while holding the yard sign. The back story is that both the Chief of Police and the detective’s supervisor had been appointed by the incumbent mayor, and the sign the detective was observed holding was for the mayor’s challenger. The next day, the detective was demoted. The detective filed suit, alleging that in their mistaken view, he had engaged in conduct that constituted free speech, and they had therefore deprived him of his rights secured by the Constitution. In dismissing the suit, the federal trial and appeals judges ruled the detective had not been deprived of any constitutionally protected right because he had not engaged in any First Amendment conduct. The United States Supreme Court reversed, stating: “When an employer demotes an employee out of a desire to prevent the employee from engaging in political activity that the First Amendment protects, the employee is entitled to challenge that unlawful action under the First Amendment and 42 USC § 1983—even if, as here, the employer makes a factual mistake about the employee’s behavior.” (Heffernan v. City of Paterson, N.J. (Apr. 26, 2016) 2016 WL 1627953.) http://www.supremecourt.gov/opinions/15pdf/14-1280_k5fl.pdf
Causation In Workers’ Comp Setting.
A 32-year-old restaurant worker died while taking refuse from the restaurant to a dumpster 300 feet away. He was found with coagulated blood and bloody foam on his face, hands and the back of his clothes. An autopsy revealed his death was caused by pulmonary hemorrhage resulting from treated tuberculosis. An internist concluded the man died from either coughing brought about by refuse odors or lifting the garbage. The Workers’ Compensation Appeals Board rejected the doctor’s opinion as speculative and ruled that it had not been shown the man’s death arose out of and in the course of his employment. The Court of Appeal annulled the Board’s decision, concluding the death did arise out of and in the course of employment, stating: “Here, there is no question that [decedent’s] death occurred while he was at work during work hours while wheeling an overflowing trashcan on a dolly to the dumpster.” The appellate court added that an employer takes the employee as he finds him at the time of employment, and an employee may not be denied compensation merely because his physical condition was such that he sustained a disability that a person of stronger constitution or in better health would not have suffered. (Guerra v. Workers' Compensation Appeals Board (Cal. App. 2nd Dist., Div. 2, Apr. 27, 2016) 2016 WL 1725931.) http://www.courts.ca.gov/opinions/documents/B266633.DOC
Plaintiff Suing Manufacturer of Medical Device Could Not Plead Around Federal Preemption.
Plaintiff underwent a surgical procedure to implant a band in her stomach to induce weight loss, which eventually eroded into both her stomach and her liver, causing portions of her stomach and intestine to die. Surgery to remove the band resulted in massive hemorrhaging and brain damage. Faced with federal preemption issues in her action against the manufacturer of the band, she alleged the manufacturer failed to train physicians in the use of the band. The trial court sustained a demurrer to the second amended complaint without leave to amend. In affirming, the Court of Appeal stated it is undisputed the manufacturer did not voluntarily undertake to train physicians in the use of the band, noting the FDA mandated physician training as a condition of its approval for the band. The appellate court stated: “Under this set of facts, plaintiff cannot allege a state law claim for negligent undertaking.” (Glennen v. Allergan, Inc. (Cal. App.1st Dist. Div. 1, Apr. 29, 2016) 2016 WL 1732243.) http://www.courts.ca.gov/opinions/documents/A145367.DOC
Person Whose Debts Discharged in Bankruptcy Not Same One Sued Here.
Plaintiff sued defendants, an entity and a host of individuals, for fraud and other causes of action. The person who owned the entity had his debts discharged in bankruptcy, and the individual defendants in the present action were the business partners of that person. Concluding plaintiff’s claims had been discharged in bankruptcy, the trial court struck the complaint and ordered sanctions against plaintiff pursuant to CCP § 128.7. In reversing, the Court of Appeal noted that plaintiff did not sue the person whose debts were discharged. (Patel v. Crown Diamonds, Inc. (Cal. App. 4th Dist., Div. 3, Apr. 29, 2016) 2016 WL 2338619.) http://www.courts.ca.gov/opinions/documents/G051439.DOC
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