Wednesday, October 23, 2013

When the Man Gives Him Lemons, Justice Liu Makes Lemonade

Sonic-Calabasas  A, Inc. v. Moreno, S174475 (SC Oct. 17, 2013)

On remand from the US Supreme Court, the California Supreme Court unanimously reverses its prior holding that an arbitration clause's waiver of rights to administrative remedies for the collection of unpaid wages renders the clause per se unconscionable. But in a 5-2 ruling, the court holds that waiver of those procedures remains a factor, among many others, that can be considered in deciding whether the contract is unconscionable.

Tuesday, October 22, 2013

A Bleak House Gets a Little Bleaker

Wallis v. PHL Associates, Inc., No. C066545 (D3 Oct. 17, 2013)

This is an appeal of a case that was originally filed in 1994! Most of the opinion is unpublished but the published section deals with when a statement of decision must be requested under Code of Civil Procedure § 632. 

When It Comes to Class Cert, It's All About the Policy

Benton v. Telecom Network Specialists, No. B242441 (D2d7 October 16, 2013)

Division seven of district two reverses a trial court’s order denying class certification because common interests did not predominate.

Ruling Out the Alternatives

Macguire v. More-Gas Investments, LLC, No. C067865 (D3 Oct. 15, 2013)

The court of appeal reverses an order granting summary judgment because the moving defendant failed to meet its initial burden. The defendant had moved on the ground that the provision of a contract upon which the plaintiff was suing was an unenforceable penalty clause and not a clause permitting reasonable liquidated damages. But there is a third possibility depending on the circumstances of the case: The provision could have been a valid clause provision for alternative performance. Because the motion did not address this possibility, the defendant had not met its burden under Code of Civil Procedure § 437c(p)(2) to show that the cause of action cannot be established because the clause at issue was an unenforceable penalty provision. Thus—although the procedural aspect merits little discussion—the case nonetheless stands for the proposition that when a plaintiff can prevail on more than one alternate legal theory on a cause of action, a moving defendant must come forward with evidence that would establish that the plaintiff could not prevail under either theory. 


Not a Question of Law, But We'll Decide it Anyway

State of California ex re Department of California Highway Patrol v. Superior Court, No. G047922 (D4d3 Oct. 15, 2013)

This opinion reversing a denial of summary judgment, published at the petitioner’s request under Rule of Court 8.1105(c), mostly deals with whether a tow truck driver is an employee of the Highway Patrol for the purposes of respondeat superior. In denying the Highway Patrol’s summary judgment motion, the trial court had certified the question under Code of Civil Procedure § 166.1, which permits a trial judge to “certify a controlling question of law as to which there are substantial grounds for difference of opinion, appellate resolution of which may materially advance the conclusion of the litigation.” But in a footnote, the court of appeal determines that the issue presented—whether or not the defendant was an employee—is not a “controlling question of law” and thus interlocutory review under §166.1 is inappropriate. In any event, the court considers the appeal as a writ and orders the court on remand to grant the motion.

Writ granted.

CBA Not Clear Enough to Make FEHA Claims Arbitrable

Mendez v. Mid-Wishire Health Care Center, No. B243144 (D2d7 Oct. 15, 2013)

Relying on U.S. Supreme Court precedent, the court of appeal holds that an arbitration clause in a collective bargaining agreement did not apply to a fired employee’s statutory claims under the Fair Employment and Housing Act (FEHA). Although there generally is a presumption that claims arising out of a collective bargaining agreement are arbitrable, that presumption does not apply to statutory employment discrimination claims. A collective bargaining agreement can make such claims arbitrable, but it must clearly reflect an express intention to do so. The court notes that the U.S. Supreme Court cases that state that rule, such as Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998), have not been overruled by AT&T Mobility LLC v. Concepcion, ___ U.S. ___, 131 S. Ct. 1740 (2011), which placed preemption limits on state law rules of contract interpretation that unequally burden arbitration agreements. Thus, because the collective bargaining agreement in this case lacked the requisite clear expression to make FEHA claims arbitrable, the trial court did not err in declining to compel these claims to arbitration. 


Sunday, October 20, 2013

Insurer that Refused to Return Calls Held to § 998 Offer Above Policy Limits

Aguilar v. Gostischef, No. B238853 (D2d8 Oct. 11, 2013)

The court of appeal holds that a Code of Civil Procedure § 998 offer to an insurer for more than policy limits is not in bad faith when there is a reasonable basis to believe that an insurer’s prior failures to communicate regarding a within-limits settlement could provide a basis for liability against the insurer exceeding its policy limits.

Brothers Are Indispensable Parties in Family Showdown

Morrical v. Rogers, A137011 (D1d5 Oct. 10, 2013)

This case is a fight over the control of a very valuable family insurance business. The opinion features more characters than a Pynchon novel, and its plot is only slightly less confusing. To oversimplify (a little), the sister sued to invalidate a board election that resulted in the election of the defendants—some money managers that had dealings with her brothers. The grounds were that the brothers—who were the other shareholders in the company—had engaged in self-dealing in transactions related to the election, which rendered the election invalid under some provisions of the Corporations Code. But even though it was the brothers whose alleged fiduciary breaches formed the basis of the attempt to invalidate the election, only the money managers and their company were named as defendants. The brothers were not joined. After the court decided some issues under the Corporations Code, it went on to say that the brothers should have been joined as indispensable parties under Code of Civil Procedure § 389. Because the brothers’ breaches of their fiduciary duties as directors and majority shareholders formed the very basis of the election challenge, they were potentially prejudiced by the sister’s failure to join them. Indeed, their rights were necessarily affected by the judgment. Further, the fact that the brothers had litigation interests that were in line with the named defendants did not mean that the defendants adequately represented their interests in the case. 

Reversed with orders to join the brothers on remand or dismiss.

Prevailing Defendant in Declaratory Relief Action for Invalidity Entitled to Fees under Civil Code § 1717

Eden Township Healthcare District v. Eden Medical Center, No. A136695 (D1d1 Oct. 9, 2013)

In a complicated hospital litigation with a long backstory, the plaintiff sued the defendant for injunctive and declaratory relief, arguing that a contract between the parties was void under a Government Code provision invalidating contracts tarnished by conflicts of interest. The defendant sought and obtained summary judgment on the invalidity claim, which was affirmed on appeal. The defendant sought attorneys’ fees under Civil Code § 1717 on the grounds that the contract that the plaintiff sought to void had a provision awarding fees to a prevailing party. When the superior court denied the motion, the defendant appealed. The court held, first, that an action to invalidate a contract is an “action on a contract” such that § 1717 comes into play. As the court notes, “it is difficult to think of an action that is more likely to be characterized as an ‘action on a contract’ than one in which the party bringing the action explicitly seeks to have the subject contract declared void and invalid in its entirety.” Second, the court rejected the argument that § 1717 should not apply because the defendant in this case had never sued the plaintiff for breach of the implicated contract. A lawsuit to enforce the contract is not required to invoke the mutuality rule of § 1717. If the contract awards fees to a prevailing party, any prevailing party in a suit “on the contract” is entitled to a fee award. “[A]warding attorney fees to the party who successfully thwarts the other party’s efforts to have a contract declared void at its inception is consistent with the mutuality of remedy doctrine.” 

Reversed and remanded for a calculation of fees.

Monday, October 14, 2013

Legal Say-So in Declarations Is Not Evidence

Davis v. Kiewit Pacific Co., No. D062388 (D4d1 Oct. 8, 2013)

In an otherwise procedurally uninteresting employment opinion that was recently order published by the Acting Presiding Justice Nares, the court addressed the initial burden of a party moving for summary adjudication. As has been well-established since the Supreme Court's 2001 Aguilar decision—unlike the federal Celotex standard, where a movant can just “point” to the absence of evidence—in California, the moving party must come forward with evidence to meet its initial burden under Code of Civil Procedure § 437c(c). Applying that rule, the court holds that a declaration that merely parrots the relevant legal standard—here, that the defendant did not have “substantial discretionary authority over decisions” affecting the plaintiff’s work—is insufficient to meet the moving party’s burden. In order to shift the burden, a declaration needs to contain testimony that actually states evidentiary facts that would warrant an inference that the standard has, in fact, been met. Reversed.

998 Offers Need No Dotted Lines

Rouland v. Pacific Specialty Insurance Co., No G047919 (D4d3 Oct. 7, 2013)

Defendant in an insurance case made an offer of judgment under Code of Civil Procedure § 998. The offer instructed the plaintiff to file the offer and notice of its acceptance with the trial court if plaintiff accepted it. The plaintiff did not respond and defendant prevailed at trial. When the insurer sought its expert fees under § 998’s cost-shifting penalties, the trial court denied the motion, reasoning that the offer was invalid because it did not provide a signature block for acceptance. The court of appeal reversed, finding that § 998 requires only that the offeror specify the method in which the offer could be accepted and that the acceptance be in a writing signed by the accepting party or its lawyer.  There is no specific signature block requirement and, although there is a judicial council form that has a signature line, since that is not a mandatory form, its formatting is not dispositive. As the offer here required an acceptance that satisfied these requirements, it was valid. Reversed and remanded to determine whether the court should exercise its discretion to award expert fees.

An Extraordinary Writ Indeed

City of Bell v. Superior Court, B247362 (D2d3, as modified, Oct. 25, 2013)

In the civil litigation over the the well-remunerated tenure of Robert Rizzo as the city manager of Bell, Rizzo sought a declaration that the City was required to provide him with a defense in the various other litigations against Rizzo, including litigations brought by the city itself. After the trial court struck the City’s jury demand on that claim, the court of appeal entertained the City's writ on whether it was entitled to a jury trial. But the court never reached the jury issue, because, after taking up the writ, ordering a response, issuing an OSC, and ordering supplemental briefing on a host of different issues, it decided that, as a matter of law, the City did not need tender a defense, so no trial was necessary. The opinion isn’t of particular note procedurally, but it is an interesting exception to the general rule about the limited willingness of appellate courts to entertain writ review. Writ granted.

The Bar Looks Out for Itself...

Yee v. Cheung, D060989 (D4d1 Oct. 4, 2013)

In an appeal from a granted SLAPP motion and a sustained demurrer, the court of appeal holds that the statute of limitations for “wrongful act or omission . . . arising in the performance of professional services” in Code of Civil Procedure § 340.6 applies to a malicious prosecution action brought against an attorney, even though other cases have decided that the longer statute of limitations in § 335.1 applies to malicious prosecution cases against non-attorneys. The court also holds that the denial of the defendant’s nonsuit motion prior to a defense jury verdict in the underlying case was sufficient evidence that the lawsuit had probable cause. Even though the case was ultimately unsuccessful, the denial of nonsuit showed that the case had more than minimal merit and plaintiff failed to come forward with evidence showing that the interim ruling was the result of fraudulent or perjured evidence. Affirmed.

Friday, October 11, 2013

Legal Misadventures in Social Media

GetFugu, Inc. v. Patton Boggs LLP, No. B231794 (D2d3, upon rehearing Oct. 3, 2013)

The court of appeal partially reverses a trial court's granting of a SLAPP motion because the plaintiff established a prima facie case that it could prevail on its claim of defamation against a lawyer and his firm.

Thursday, October 10, 2013

Supreme Court Puts the Kybosh on Phony-Baloney Appeals

Kurwa v. Kislinger, No. S201619 (SC Oct. 3, 2013)

Resolving a recent split of authority, the Supreme Court holds that parties cannot manufacture jurisdiction for an interlocutory appeal by dismissing pending causes of action without prejudice and agreeing to toll the statute of limitations on them until after the appeal is resolved. 

Tuesday, October 8, 2013