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McIntyre’s California Civil Law Update

9th CIRCUIT COURT OF APPEAL

Civil Procedure

Diaz v. First American Home Buyer Protection Corporation _ F.3d _ (9th Cir. 2013): The Court of Appeal reversed the district court’s order granting a motion to dismiss. Plaintiff filed a class-action complaint alleging that First American refused to make timely repairs, used substandard contractors and wrongfully denied claims. She asserted state law claims for unfair competition, misrepresentation, concealment, breach of contract and breach of the implied covenant of good faith and fair dealing. The district court dismissed Diaz’s unfair competition and concealment claims under Federal Rule of Civil Procedure 12(b)(6) and later denied class certification. First American made an offer of judgment on Diaz’s remaining individual claims pursuant to Federal Rule of Civil Procedure 68. When Diaz did not accept the offer, First American moved to dismiss these claims for lack of subject matter jurisdiction, and the district court granted the motion, finding the unaccepted offer rendered Diaz’s remaining claims moot. The Court of Appeal ruled that, even if the unaccepted Rule 68 offer would have fully satisfied plaintiff’s claims, it did render them moot and vacated the dismissal of Diaz’s claims for misrepresentation, breach of contract and breach of the implied covenant of good faith and fair dealing. (October 4, 2013.)

CALIFORNIA SUPREME COURT

Appeal

Kurwa v. Kislinger (2013) _ Cal.4th _ : The California Supreme Court reversed the Court of Appeal. Under California’s “one final judgment” rule, a judgment that fails to dispose of all the causes of action pending between the parties is generally not appealable. (Code Civil Procedure, section 904.1(a).) When a judgment disposes of fewer than all the pled causes of action by dismissal with prejudice, and the parties have agreed to dismiss the remaining counts without prejudice and waive operation of the statute of limitations on those remaining causes of action, the judgment is not appealable. (October 3, 2013.)

CALIFORNIA COURTS OF APPEAL

Attorneys

Zimmerman v. Superior Court (People) (2013) _ Cal.App.4th _ : The Court of Appeal denied a writ of prohibition by a criminal defense attorney claiming attorney-client privilege. The trial court found Zimmerman in direct, continuing contempt for failing to answer questions regarding the

circumstances under which she came into possession of specific evidence (a portfolio and mail) relevant to the prosecution’s case against her client Goodwin. Zimmerman claimed the evidence was delivered to her by Goodwin’s agent or agents, and therefore the circumstances of the delivery and Zimmerman’s observations regarding the delivery were protected by the attorney-client privilege. The Court of Appeal noted this was an issue of first impression. Zimmerman had the burden of proof but failed to satisfy her burden because she offered almost no evidence that would allow the court to determine the existence of agency, which is generally a question of fact. Without the existence of agency, Zimmerman’s claim of privilege necessarily failed, and the superior court’s order for Zimmerman to answer the subject questions was lawful and proper. (C.A. 4th, October 8, 2013.)

Attorney Fees

Eden Township Healthcare District v. Eden Medical Center (2013) _ Cal.App.4th _ : The Court of Appeal reversed the trial court’s denial of a motion for attorney fees under Civil Code 1717. When the Eden Township Healthcare District (District) unsuccessfully brought a cross-complaint for declaratory relief seeking to have two agreements declared illegal and void under Government Code section 1090, they put an attorney fees clause in one agreement into play. Having failed in its attempt to prove that the agreements were void, the District was liable for Eden Medical Center’s attorney fees under section 1717. (C.A. 1st, October 9, 2013.)

Civil Code

Eden Township Healthcare District v. Eden Medical Center (2013) _ Cal.App.4th _ : See summary above under Attorney Fees.

Civil Procedure/Anti-SLAPP/998s

Chapman v. Skype Inc. (2013) _ Cal.App.4th _ : The Court of Appeal reversed the trial court’s order sustaining a demurrer without leave to amend to a class-action complaint alleging violation of the unfair competition law (UCL) (Business & Professions Code, section 17200 et seq.), the false advertising law (Business & Professions Code, section 17500), the Consumer Legal Remedies Act (CLRA) (Civil Code, section 1750 et seq.), intentional and negligent misrepresentation, and unjust enrichment. Plaintiff alleged that Skype advertised its voice over Internet plans as unlimited when the plans were actually limited as to the number of minutes per day and month and the number of calls per day. The Court of Appeal found that plaintiff had adequately alleged counts for violation of the UCL, the false advertising law, and the CLRA based on deceptive advertising. She failed, however, to allege her counts for intentional and negligent misrepresentation  with sufficient specificity as to actual reliance, but she was entitled to amend her complaint as to those counts. She was also entitled to amend her complaint to allege a rescission of the subscription agreement to support her count for unjust enrichment. (C.A. 2nd, October 4, 2013.)

Davis v. Kiewit Pacific Co. (2013) _ Cal.App.4th _ : The Court of Appeal reversed the trial court’s order granting summary judgment for defendant on punitive damages. The Court of Appeal concluded that the trial court erred in granting Kiewit’s motion for summary adjudication on plaintiff’s punitive damages claim because there was a triable issue of material fact regarding whether a managing agent of Kiewit engaged in or ratified the wrongful conduct against plaintiff. (C.A. 4th, filed September 18, 2013, published October 8, 2013.)

GetFugu, Inc. v. Patton Boggs LLP (2013) _ Cal.App.4th _ : The Court of Appeal partially reversed the trial court’s order granting an anti-SLAPP motion to strike regarding a defamation cause of action against defendants Patton Boggs LLP (Patton) and Richard J. Oparil (Oparil) related to a press release. Oparil issued a press release to publicize the alleged misdeeds of GetFugu and Freer. Defendants contended the press release was issued through “Investor Wire” and was directed to persons in the investment community so as to be shielded by the litigation privilege. The Court of Appeal disagreed, finding that the press release was posted on the Internet and thus was released worldwide and dissemination of the publication to a segment of the population as large as the “investment community” was essentially the same as disclosure to the general public. To defeat a special motion to strike, a plaintiff need only present sufficient evidence showing a case of minimal merit. Plaintiff’s opposing declarations, by disputing the existence of an FBI criminal investigation of Freer, were sufficient to meet that slight threshold and enable GetFugu and Freer to proceed on the defamation claim. (C.A. 2nd, October 3, 2013.)

Rouland v. Pacific Specialty Insurance Company (2013) _ Cal.App.4th _ : The Court of Appeal reversed the trial court’s denial of expert fees under Code of Civil Procedure section 998. The trial court erroneously denied Pacific Specialty its expert fees because its settlement offers did not strictly

comply with section 998’s requirement that an offer “shall include… a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted.” The Court of Appeal concluded that Pacific Specialty’s offers satisfied this requirement by directing the Roulands to file an “’Offer and Notice of Acceptance’” with the trial court if they accepted the proposals. The statute merely requires the section 998 offer to identify a manner of acceptance that complies with the statute’s additional requirement of a signed acceptance by the party or its counsel. The Court of Appeal remanded the case to the trial court to exercise its discretion in determining whether to allow Pacific Specialty to recover its expert witness fees. (C.A. 4th, October 7, 2013.)

Yee v. Cheung (2013) _ Cal.App.4th _ : The Court of Appeal affirmed the trial court’s order sustaining a demurrer by an attorney defendant and granting an anti-SLAP motion to strike by the remaining defendants to a complaint alleging malicious prosecution. The one-year statute of limitations in Code of Civil Procedure section 340.6 applies to all actions against attorneys including claims for malicious prosecution. The Court of Appeal agreed with the trial court that the anti-SLAPP statute applied to the action and also agreed that plaintiff had failed to demonstrate a probability of prevailing on the lack of probable cause element. (C.A. 4th, October 4, 2013.)

Class Action

Chapman v. Skype Inc. (2013) _ Cal.App.4th _ : See summary above under Civil Procedure.

Corporations

Morrical v. Rogers (2013) _ Cal.App.4th _ : The Court of Appeal reversed the trial court judgment because plaintiff had not joined indispensable parties. An action under Corporations Code section 709 to determine the validity of an election of corporate directors may be based on an alleged breach of fiduciary duty and violation of Corporations Code section 310 which governs corporate transactions with companies in which one or more corporate directors have a material financial interest. The Court of Appeal also concluded, however, that the trial court erred in failing to require that two brother shareholders be joined in the action as indispensable parties, and therefore reversed and remanded for further proceedings. (C.A.1st, October 10, 2013.)

Employment/Labor

American Corporate Security, Inc. v. Su (2013) _ Cal.App.4th _ : The Court of Appeal affirmed the trial court’s order sustaining a demurrer to a petition for writ of mandate. Paul Thomas filed a complaint with the Labor Commissioner claiming that he was fired from his job  at plaintiff American Corporate Security, Inc. (ACS) in retaliation for asserting his rights under the Labor Code. Defendant Labor Commissioner investigated the complaint and found reasonable cause to believe there was a violation but did not issue her determination until over three years after Thomas filed his complaint, in violation of Labor Code section 98.7(e) which requires the Commissioner to give notice of the determination “not later than 60 days after the filing of the complaint.” ACS petitioned for a writ of mandate to order the Labor Commissioner to retract the determination and order for remedial action, and the trial court sustained a demurrer to the petition. The Court of Appeal found that ACS had an adequate legal remedy because it could raise the timing issue as a defense to an action by the Labor Commissioner to enforce the order. (C.A. 3rd, filed September 10, 2013, published September 27, 2013.)

Evidence

Zimmerman v. Superior Court (People) (2013) _ Cal.App.4th _ : See summary above under Attorneys.

Government

City of Bell v. Superior Court (Rizzo) (2013) _ Cal.App.4th _ : The Court of Appeal granted a writ petition by the City of Bell challenging a trial court order striking its jury trial demand regarding issues of indemnity. Robert Rizzo’s employment contact included a clause that was simply a third-party indemnification agreement, which did not apply to civil actions by or on behalf of the City. The Attorney General had filed an action on behalf of the City against Rizzo, and because the indemnity agreement did not apply to such actions, there was no duty to defend. The Court of Appeal also considered the statutory provisions governing public entity indemnity for criminal prosecutions. Government Code section 996.6 does not permit a public entity to provide a defense where other sections of the Tort Claims Act would prohibit such a defense. Government Code section 995.8 prevents a public entity from providing its employee a defense to a criminal action unless the public entity determines that the defense would be in the best interests of the public entity and that the public employee had acted in good faith and without malice. Absent such a finding, a public entity cannot provide a defense to a criminal action. (C.A. 2nd, October 4, 2013.)

Insurance

Reid v. Mercury Insurance Company (2013) _ Cal.App.4th _ : The Court of Appeal affirmed the trial court’s summary judgment in favor of the insurance company. An insurer’s duty to settle is not precipitated solely by the likelihood of an excess judgment against the insured. In the absence of a settlement demand or any other manifestation the injured party is interested in settlement, when the  insurer has done nothing to foreclose the possibility of settlement, there is no liability for bad faith failure to settle. (C.A. 2nd, October 7, 2013.)

Punitive Damages

Davis v. Kiewit Pacific Co. (2013) _ Cal.App.4th _ : See summary above under Civil Procedure.

Real Property/Homeowners Associations

Friars Village Homeowners Association v. Hansing (2013) _ Cal.App.4th _ : The Court of Appeal affirmed the bench trial judgment. In light of the language of the governing documents and relevant statutes, the Homeowners Association’s Board was authorized to enact a rule preventing a person from seeking a position on the Board if the prospective candidate was related by blood or marriage to a current Board member or to a current candidate for such office. (C.A.4th, filed September 20, 2013, published October 9, 2013.)

Torts/Personal Injury/Wrongful Death

Halliburton Energy Services, Inc. v. Department of Transportation (2013) _ Cal.App.4th _ : The Court of Appeal affirmed the trial court’s summary judgment in favor of Halliburton Energy Services, Inc. (Halliburton). Although Halliburton had provided its employee with a truck to drive to and from work, the incidental benefit exception to the going and coming rule for vicarious liability did not apply to a trip of 140 miles from the employee’s assigned workplace in Seal Beach to Bakersfield to purchase a vehicle for his wife. The purpose of that trip was entirely personal. (C.A. 5th, October 1, 2013.)

Meddock v. County of Yolo (2013) _ Cal.App.4th _ : The Court of Appeal affirmed the trial court’s summary judgment granted in favor of defendant. A Fremont cottonwood tree fell on plaintiff Dwight Meddock while he was in a paved parking lot located in a park along the Sacramento River owned by defendant County of Yolo. The trial court properly granted summary judgment against Meddock and his wife (collectively, Meddock) in their tort suit alleging a dangerous condition of public property, by applying a statutory immunity for injuries “caused by a natural condition of any unimproved public property[.]” (Government Code, section 831.2). Meddock’s injuries were caused by a natural condition of unimproved property where the tree grew. And although the tree fell on the improved portion of the public property, that fact did not eliminate the application of section 831.2. (C.A. 3rd, filed September 10, 2013, published October 3, 2013.)

Yee v. Cheung (2013) _ Cal.App.4th _ : See summary above under Civil Procedure.

Monty A. Mcintyre

Below are some recent cases summarized by Monty A. McIntyre in his publication California Case Summaries Civil™, which provides organized succinct summaries, every other Monday, of every new published California civil case for only $7.99 a month. (Go to http://montymcintyre.com/mcintyre/.) Monty has been a civil trial lawyer since 1980, representing both plaintiffs and defendants in a broad variety of civil cases, and has more than 17 years of experience as a mediator and arbitrator. He has been a member of ABOTA since 1995, and is the past president of the San Diego County Bar Assn. and the San Diego Chapter of ABOTA. Monty mediates and arbitrates at ADR Services, Inc., where he handles cases in the areas of business, commercial, elder abuse, employment/wage & hour, insurance coverage/bad faith, legal malpractice, medical malpractice, personal injury, real property and wrongful death. To schedule a mediation or arbitration, contact his case manager Kelsey Carroll at ADR Services, Inc. at (619) 233-1323 or kelsey@adrservices.org.

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About the Author: Below are some recent cases summarized by Monty A. McIntyre in his publication California Case Summaries Civil™, which provides organized succinct summaries, every other Monday, of every new published California civil case for only $7.99 a month. (Go to http://montymcintyre.com/mcintyre/.) Monty has been a civil trial lawyer since 1980, representing both plaintiffs and defendants in a broad variety of civil cases, and has more than 17 years of experience as a mediator and arbitrator. He has been a member of ABOTA since 1995, and is the past president of the San Diego County Bar Assn. and the San Diego Chapter of ABOTA. Monty mediates and arbitrates at ADR Services, Inc., where he handles cases in the areas of business, commercial, elder abuse, employment/wage & hour, insurance coverage/bad faith, legal malpractice, medical malpractice, personal injury, real property and wrongful death. To schedule a mediation or arbitration, contact his case manager Kelsey Carroll at ADR Services, Inc. at (619) 233-1323 or kelsey@adrservices.org.

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