Hart v. Clear Recon Corp., No. B283221 (D2d8 Sept. 18, 2018)
A provision in a mortgage deed of trust lets the Lender take certain actions to protect its security interest in the property. They include, among other things, going to court. The provision then says that the cost of those actions can be added to the loan as principal and are subject to interest at the rate in the note.
Monday, October 29, 2018
Wednesday, October 24, 2018
The State Has No Home Court
Gamestop v. Superior Court, No. E068701 (D4d2 Aug. 22, 2018)
The Riverside and Shasta County DAs sued a secondhand video game Store in Riverside Superior Court for violating the Unfair Competition Law. They claim that the Store’s conduct was “unlawful” under the UCL because the Store violated the Secondhand Dealers’ Law, which regulates pawn shops and other resellers of personal property to prevent them from being used to fence stolen goods.
Store moved to change venue under Code of Civil Procedure § 394(a), which permits a foreign corporate defendant to transfer an action to a neutral county when sued by a city, county, or local agency. But according to the Court of Appeal, the problem with that argument is that the UCL permits a DA to bring a UCL action on behalf of “the People of the State of California.” Thus, even if the DA’s authority is limited to prosecuting UCL violations in his or her home county—a question that is currently pending before the California Supreme Court—the State of California is nonetheless the plaintiff, so § 394(a) doesn’t facially apply.
Writ denied.
The Riverside and Shasta County DAs sued a secondhand video game Store in Riverside Superior Court for violating the Unfair Competition Law. They claim that the Store’s conduct was “unlawful” under the UCL because the Store violated the Secondhand Dealers’ Law, which regulates pawn shops and other resellers of personal property to prevent them from being used to fence stolen goods.
Store moved to change venue under Code of Civil Procedure § 394(a), which permits a foreign corporate defendant to transfer an action to a neutral county when sued by a city, county, or local agency. But according to the Court of Appeal, the problem with that argument is that the UCL permits a DA to bring a UCL action on behalf of “the People of the State of California.” Thus, even if the DA’s authority is limited to prosecuting UCL violations in his or her home county—a question that is currently pending before the California Supreme Court—the State of California is nonetheless the plaintiff, so § 394(a) doesn’t facially apply.
Writ denied.
Tuesday, October 23, 2018
Not a Well-Advised Strategy
Takhar v. People ex rel. Feather River AQMD, No. C082021 (D3 Sept. 11, 2018)
If you respond to an enforcement action brought by your regulator by bringing a counterclaim under Code of Civil Procedure § 526a, alleging that the action constitutes waste, you’re going to have an anti-SLAPP issue. You are literally suing someone for investigating and suing you. That’s protected activity. And so long as the enforcement is colorable—it’s not, for instance, under an obviously unenforceable statute—there’s no waste, so you can’t succeed either. Which is what happened here.
Reversed.
If you respond to an enforcement action brought by your regulator by bringing a counterclaim under Code of Civil Procedure § 526a, alleging that the action constitutes waste, you’re going to have an anti-SLAPP issue. You are literally suing someone for investigating and suing you. That’s protected activity. And so long as the enforcement is colorable—it’s not, for instance, under an obviously unenforceable statute—there’s no waste, so you can’t succeed either. Which is what happened here.
Reversed.
Monday, October 22, 2018
Informed Consent Is Cruicial to a Conflicts Waiver
Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co., Inc., No. S232946 (Cal. Aug. 30, 2018)
Back in 2016, the Court of Appeal vacated an arbitration award in an attorney fee arbitration, holding that a law firm’s retainer agreement (and the arbitration clause within it) was completely void under Rule of Professional Conduct 3-310(C)(3) due to an undisclosed conflict of interest. At the time the client engaged the firm, the firm was adverse to the client in an unrelated matter. Thus, notwithstanding the agreement’s general forward conflicts waiver, there was no informed consent because the actual conflict was not specifically disclosed. And that meant the law firm couldn’t get paid anything and had to disgorge what it had been paid to date. The Supreme Court granted review.
Back in 2016, the Court of Appeal vacated an arbitration award in an attorney fee arbitration, holding that a law firm’s retainer agreement (and the arbitration clause within it) was completely void under Rule of Professional Conduct 3-310(C)(3) due to an undisclosed conflict of interest. At the time the client engaged the firm, the firm was adverse to the client in an unrelated matter. Thus, notwithstanding the agreement’s general forward conflicts waiver, there was no informed consent because the actual conflict was not specifically disclosed. And that meant the law firm couldn’t get paid anything and had to disgorge what it had been paid to date. The Supreme Court granted review.
Friday, October 19, 2018
More a Question of Who than How Much...
Sandoval v. Qualcomm, Inc., No. D070431 (D4d1 Oct. 19, 2018)
This is an appeal and cross appeal of post-judgment motions in a multi-defendant personal injury case. The trial court denied a JNOV, but grated a new trial on the ground that the jury messed up comparative fault allocation. In granting the new trial, it relied on Code of Civil Procedure § 657(5), which permits a new trial based on excessive or inadequate damages.
The JNOV is as easy affirm. There was substantial evidence, enough to get to a jury, which is all a JNOV addresses.
On the new trial, right result, wrong provision. While comparative fault deals with damages in a sense, § 657(5) is addressed to the overall damages award, not its allocation between defendants. Regardless, the code nonetheless permitted the trial court to grant a new trial on comparative fault under § 657(6), which addresses the insufficiency of the evidence to justify a verdict. And since there was substantial evidence to support the trial court's decision in its capacity as an independent evaluator of the facts, that would be upheld.
Affirmed.
This is an appeal and cross appeal of post-judgment motions in a multi-defendant personal injury case. The trial court denied a JNOV, but grated a new trial on the ground that the jury messed up comparative fault allocation. In granting the new trial, it relied on Code of Civil Procedure § 657(5), which permits a new trial based on excessive or inadequate damages.
The JNOV is as easy affirm. There was substantial evidence, enough to get to a jury, which is all a JNOV addresses.
On the new trial, right result, wrong provision. While comparative fault deals with damages in a sense, § 657(5) is addressed to the overall damages award, not its allocation between defendants. Regardless, the code nonetheless permitted the trial court to grant a new trial on comparative fault under § 657(6), which addresses the insufficiency of the evidence to justify a verdict. And since there was substantial evidence to support the trial court's decision in its capacity as an independent evaluator of the facts, that would be upheld.
Affirmed.
Tolling Accrues to the Diligent
Martinez v. Landry’s Restaurants, No. B278513 (D2d7 Aug. 28, 2018)
This wage and hour class action, filed in 2007, got dismissed under the five-year rule in Code of Civil Procedure § 583.310. Plaintiffs don’t argue that five years haven’t passed. But there’s potential tolling for four different periods.
This wage and hour class action, filed in 2007, got dismissed under the five-year rule in Code of Civil Procedure § 583.310. Plaintiffs don’t argue that five years haven’t passed. But there’s potential tolling for four different periods.
Thursday, October 18, 2018
Blown Demurrer Opp. Counts as a "Dismissal" for Mandatory § 473(b) Relief
Pagnini v. Union Bank, N.A., No. A151390 (D1d5 Oct. 17, 2018)
Plaintiff’s attorney tried to file an amended complaint as a response to a demurrer. But the attorney didn’t know that Code of Civil Procedure § 472—the statute that permits an amendment as a response to a demurrer—had recently been amended to change the timing. Although the prior version let you moot a demurrer by filing an amendment before the demurrer hearing, the current version required the amended complaint to be filed before the opposition is due. This resulted in the clerk rejecting the amended pleading. The trial court ultimately granted the demurrer as unopposed and entered judgment for Defendant.
Several months later, Plaintiff filed a motion for mandatory relief under § 473(b). His motion was accompanied by a declaration from his attorney, attesting to the mistake that led to the dismissal. But the trial court denied the motion nonetheless.
That was error. The mandatory relief provision in § 473(b) applies to both defaults and dismissals that are caused by the neglect (even the inexcusable neglect) of a party’s attorneys. At some point, the Legislature added dismissals to provide parity between mistakes by both plaintiffs and defense lawyers. Dismissals include failures to respond to “dismissal motions.” And while there does not appear to be a prior case that says it, the court finds that a failure to respond to a demurrer to the whole complaint readily fits into that category, given that if granted without leave to amend, a demurrer lead to a dismissal under § 581(f)(1). Which is what happened here after the attorney whiffed on the deadline.
Reversed.
Plaintiff’s attorney tried to file an amended complaint as a response to a demurrer. But the attorney didn’t know that Code of Civil Procedure § 472—the statute that permits an amendment as a response to a demurrer—had recently been amended to change the timing. Although the prior version let you moot a demurrer by filing an amendment before the demurrer hearing, the current version required the amended complaint to be filed before the opposition is due. This resulted in the clerk rejecting the amended pleading. The trial court ultimately granted the demurrer as unopposed and entered judgment for Defendant.
Several months later, Plaintiff filed a motion for mandatory relief under § 473(b). His motion was accompanied by a declaration from his attorney, attesting to the mistake that led to the dismissal. But the trial court denied the motion nonetheless.
That was error. The mandatory relief provision in § 473(b) applies to both defaults and dismissals that are caused by the neglect (even the inexcusable neglect) of a party’s attorneys. At some point, the Legislature added dismissals to provide parity between mistakes by both plaintiffs and defense lawyers. Dismissals include failures to respond to “dismissal motions.” And while there does not appear to be a prior case that says it, the court finds that a failure to respond to a demurrer to the whole complaint readily fits into that category, given that if granted without leave to amend, a demurrer lead to a dismissal under § 581(f)(1). Which is what happened here after the attorney whiffed on the deadline.
Reversed.
Tuesday, October 16, 2018
Harley Dealer Can't Ride Free (With or Without Being Hassled by the Man) on Bank's Arb Clause
Fuentes v. TMCSF, Inc., No. E066242 (Aug. 23, 2018)
Plaintiff bought a Harley. He brought a CLRA/UCL/FAL class action against the Dealer for various misrepresentations in its sales practices. His sales contract does not have an arb clause. But his finance agreement does. Although Plaintiff didn’t sue the bank, Dealer tries to enforce the arbitration rights in that agreement anyway. But none of the theories that permit a non-party to compel arbitration apply. The Court here goes through incorporation, agency, third party beneficiary, and estoppel. But there’s also alter ego, which apparently is not an issue here. So the trial court correctly denied Dealer’s motion to compel arbitration.
Affirmed.
Accord The Wild Angels.
Plaintiff bought a Harley. He brought a CLRA/UCL/FAL class action against the Dealer for various misrepresentations in its sales practices. His sales contract does not have an arb clause. But his finance agreement does. Although Plaintiff didn’t sue the bank, Dealer tries to enforce the arbitration rights in that agreement anyway. But none of the theories that permit a non-party to compel arbitration apply. The Court here goes through incorporation, agency, third party beneficiary, and estoppel. But there’s also alter ego, which apparently is not an issue here. So the trial court correctly denied Dealer’s motion to compel arbitration.
Affirmed.
Accord The Wild Angels.
A Partial Final Arb Award Is Not Really Final
Maplebear v. Busick, No. A151677 (D1d2 Aug. 21, 2018)
California state courts generally only have jurisdiction to vacate or confirm arbitration awards when they are final. Under Code of Civil Procedure § 1283.4, that means the award “include[s] a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.” It’s basically the equivalent of the one final judgment rule for taking an appeal under § 904.1.
California state courts generally only have jurisdiction to vacate or confirm arbitration awards when they are final. Under Code of Civil Procedure § 1283.4, that means the award “include[s] a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.” It’s basically the equivalent of the one final judgment rule for taking an appeal under § 904.1.
Monday, October 15, 2018
§ 47(b) Displaced by Retaliatory Eviction Statute
Winslett v. 1181 27th Ave., LLC, No. A146932 (D1d4 Aug. 15, 2018)
Tenant sued Landlord for, among other things, retaliation, retaliatory eviction, and for violating an Oakland eviction-control ordinance. Landlord responded with an anti-SLAPP motion, arguing that the claims arise from the service of a 3-day notice to quit and filing of an unlawful detainer case and that the litigation privilege bars liability on the claims. Trial court granted the motion.
Tenant sued Landlord for, among other things, retaliation, retaliatory eviction, and for violating an Oakland eviction-control ordinance. Landlord responded with an anti-SLAPP motion, arguing that the claims arise from the service of a 3-day notice to quit and filing of an unlawful detainer case and that the litigation privilege bars liability on the claims. Trial court granted the motion.
Friday, October 12, 2018
Tall Trees + Unlicensed Gardener = Homeower Liability
Jones v. Sorenson, No. C084870 (D3 Aug. 2, 2018)
As a homeowner, this case scares the crap out of me.
Homeowner hired a gardener to trim some trees. Gardener then hired plaintiff as a helper. Plaintiff fell off a ladder and got hurt. Plaintiff sued homeowner, on the theory that gardener’s negligence caused her injury, and that homeowner was on the hook under respondeat superior.
Generally, an injured employee’s only recourse is to workers’ compensation. But if the employer doesn’t have workers’ comp coverage, the employee can sue in tort for negligence. And where a contractor needs to be licensed to perform the work entailed, a person who hires an unlicensed contractor can be subject to liability as a co-employer.
So the question is whether, in this case, a contractor’s license was required. Under the applicable statute, anyone who trims trees is a contractor. But there are exceptions for: (a) someone “performing the activities of a nurseryperson,” and (b) for “gardeners” engaged in “incidental pruning” of trees under 15 feet tall. The gardener exception doesn’t apply, because the tree was more than 15 feet tall. And the nurseryperson exception doesn’t apply, because (as the Court reads the statutory scheme) that applies to a licensed nursery operator engaged in cultivating plants. The gardener here doesn’t meet that description.
So the trial court erred in granting summary judgment to the homeowner.
Reversed.
As a homeowner, this case scares the crap out of me.
Homeowner hired a gardener to trim some trees. Gardener then hired plaintiff as a helper. Plaintiff fell off a ladder and got hurt. Plaintiff sued homeowner, on the theory that gardener’s negligence caused her injury, and that homeowner was on the hook under respondeat superior.
Generally, an injured employee’s only recourse is to workers’ compensation. But if the employer doesn’t have workers’ comp coverage, the employee can sue in tort for negligence. And where a contractor needs to be licensed to perform the work entailed, a person who hires an unlicensed contractor can be subject to liability as a co-employer.
So the question is whether, in this case, a contractor’s license was required. Under the applicable statute, anyone who trims trees is a contractor. But there are exceptions for: (a) someone “performing the activities of a nurseryperson,” and (b) for “gardeners” engaged in “incidental pruning” of trees under 15 feet tall. The gardener exception doesn’t apply, because the tree was more than 15 feet tall. And the nurseryperson exception doesn’t apply, because (as the Court reads the statutory scheme) that applies to a licensed nursery operator engaged in cultivating plants. The gardener here doesn’t meet that description.
So the trial court erred in granting summary judgment to the homeowner.
Reversed.
Thursday, October 11, 2018
Oh Yeah, Those Other Four Cases ....
Potential arbitrators are required to make disclosures of
potential conflicts. Many of the arbitration service providers accomplish this
through a questionnaire where the arbitrator walks through a series of
questions. In this case, the arbitrator’s disclosure consisted of 28 questions
over 11 pages. To question 28, which asked if the arbitrator would entertain
any other offers of employment from the parties while the case is pending, the
arbitrator answered, “yes,” that he or she* would consider offers to serve as
an arbitrator in other matters for the parties or their counsel. Unfortunately,
the eleventh page of the disclosures was missing.
Wednesday, October 10, 2018
Livermore Lab Retirees Class Can Proceed Against UC on Liability Issues
Moen v. Regents of the Univ. of Cal., No. A153386 (D1d5 Aug 1, 2018)
A class action against the UC brought by some Retirees at the Lawrence Livermore lab. Retirees claim that the UC system either implicitly or explicitly promised them health insurance and that the UC’s failure to honor those promises after the lab was privatized is an unconstitutional impairment of contract. The case has been pending for eight years. A class was ultimately certified, and a part of the case about the UC system’s authority to enter the alleged contracts was tried. Retirees won.
But the UC then moved to decertify the class, arguing that the rest of the case—about whether promises were actually made and relied upon—was too individualized to be addressed class-wide. The trial court agreed and decertified the class. Retirees appeal.
The Court of Appeal reverses, in part. Contract formation is typically an individualized question. But Retirees’ theory is that the UC had a uniform practice of offering the benefits and that the benefits were implicitly accepted by the retirees when they came and/or continued to work for the lab. Under the circumstances, there was enough commonality among the members of the class for the contract formation issues to be tried class-wide. Similarly, the mostly legal issue of whether contracts, if formed, were impaired, could be addressed by a class because it did not require specific proof of economic injury.
On the other hand, damages could not be decided on a class-wide basis. That would require an assessment of the value of the allegedly promised policy versus the value of what each Retiree ultimately received, which could have a great deal of variety of factors, including each Retiree’s actual use of the heath care benefits provided.
Reversed in part.
A class action against the UC brought by some Retirees at the Lawrence Livermore lab. Retirees claim that the UC system either implicitly or explicitly promised them health insurance and that the UC’s failure to honor those promises after the lab was privatized is an unconstitutional impairment of contract. The case has been pending for eight years. A class was ultimately certified, and a part of the case about the UC system’s authority to enter the alleged contracts was tried. Retirees won.
But the UC then moved to decertify the class, arguing that the rest of the case—about whether promises were actually made and relied upon—was too individualized to be addressed class-wide. The trial court agreed and decertified the class. Retirees appeal.
The Court of Appeal reverses, in part. Contract formation is typically an individualized question. But Retirees’ theory is that the UC had a uniform practice of offering the benefits and that the benefits were implicitly accepted by the retirees when they came and/or continued to work for the lab. Under the circumstances, there was enough commonality among the members of the class for the contract formation issues to be tried class-wide. Similarly, the mostly legal issue of whether contracts, if formed, were impaired, could be addressed by a class because it did not require specific proof of economic injury.
On the other hand, damages could not be decided on a class-wide basis. That would require an assessment of the value of the allegedly promised policy versus the value of what each Retiree ultimately received, which could have a great deal of variety of factors, including each Retiree’s actual use of the heath care benefits provided.
Reversed in part.
Tuesday, October 9, 2018
Bees!!!!!
Staats v. Vintner’s Golf Club, LLC, No. A147928 (D1d1 Aug. 1, 2018)
Not procedure, but the Court here holds that a golf course has a duty to take reasonable measures protect its patrons from swarms of yellow jackets. Good to know.
Not procedure, but the Court here holds that a golf course has a duty to take reasonable measures protect its patrons from swarms of yellow jackets. Good to know.
Monday, October 8, 2018
Vicarious Conflicts
Fluidmaster, Inc. v. Fireman’s Fund Ins. Co., No. G055469 (D4d3 Jul. 24, 2018)
Firm’s OC office is defending Insurance Carrier in some coverage litigation. Attorney A worked on the other side of case as a manager for Plaintiff’s e-discovery vendor. Attorney A subsequently got hired by Firm’s LA office. She was asked about conflicts, and screened from the coverage dispute. Firm informed Plaintiff of the hiring and the screen.
Plaintiff successfully moved to DQ Firm. But while appeal was pending, A left Firm. And (based on supplemental briefing) there’s no evidence that A actually shared any confidential information she obtained in her prior employment.
The court assumes that acting in the capacity as an attorney for a client’s e-discovery vendor is enough to potentially create a conflict. So the question is whether the screen was effective, particularly given A’s departure from the firm before the appeal was decided.
Vicarious disqualification generally isn’t the rule in California. But even setting that aside, a prior case—Kirk v. First Am. Title Ins. Co., 183 Cal. App. 4th 776 (2010)—specifically addresses the situation where a conflicted attorney quickly leaves. The pertinent question is: Did she spill the beans while there? And in connection with that, the court needs to consider the efficacy of any screening put in place. And that requires an assessment of seven different factors, which are set out in Kirk.
Since none of that analysis was done by the trial court, the case gets sent back for it to be done in the first instance.
Reversed and remanded.
Firm’s OC office is defending Insurance Carrier in some coverage litigation. Attorney A worked on the other side of case as a manager for Plaintiff’s e-discovery vendor. Attorney A subsequently got hired by Firm’s LA office. She was asked about conflicts, and screened from the coverage dispute. Firm informed Plaintiff of the hiring and the screen.
Plaintiff successfully moved to DQ Firm. But while appeal was pending, A left Firm. And (based on supplemental briefing) there’s no evidence that A actually shared any confidential information she obtained in her prior employment.
The court assumes that acting in the capacity as an attorney for a client’s e-discovery vendor is enough to potentially create a conflict. So the question is whether the screen was effective, particularly given A’s departure from the firm before the appeal was decided.
Vicarious disqualification generally isn’t the rule in California. But even setting that aside, a prior case—Kirk v. First Am. Title Ins. Co., 183 Cal. App. 4th 776 (2010)—specifically addresses the situation where a conflicted attorney quickly leaves. The pertinent question is: Did she spill the beans while there? And in connection with that, the court needs to consider the efficacy of any screening put in place. And that requires an assessment of seven different factors, which are set out in Kirk.
Since none of that analysis was done by the trial court, the case gets sent back for it to be done in the first instance.
Reversed and remanded.
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