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McIntyre’s Civil Alert. Organized Succinct Summaries

CALIFORNIA COURTS OF APPEAL

Attorneys
M’Guinness v. Johnson (2015) _ Cal.App.4th _ , 2015 WL 9583486: The Court of Appeal reversed the trial court’s order denying a motion to disqualify a law firm. The motion arose in a lawsuit between shareholders over the operation of a small construction firm. One of the grounds argued by the moving parties was concurrent representation. In denying the motion, the trial court reasoned that the evidence was insufficient to warrant automatic disqualification based upon a concurrent representation conflict of interest. The Court of Appeal disagreed and held that the undisputed facts demonstrated that the law firm continued to represent the corporation through the time the lawsuit was instituted. If a party moving to disqualify an attorney establishes concurrent representation, the court is required, in all but a few instances, to automatically disqualify the attorney without regard to whether the subject matter of the representation of one client relates to the representation of a second client in the lawsuit. While disqualification is a drastic measure, and motions to disqualify are sometimes brought by litigants for improper tactical reasons, disqualification is not generally disfavored. When the circumstances of a disqualifying conflict exist, disqualification is required. (C.A. 6th, December 30, 2015).

Civil Procedure
Castillo v. DHL Express (USA) (2015) _ Cal.App.4th _ , 2015 WL 9703433: The Court of Appeal affirmed the trial court’s dismissal of plaintiff’s wage-and-hour class action and individual complaint defendants for failure to prosecute within the five-year period provided by Code of Civil Procedure section 583.310. The tolling provision regarding mediation in section 1775.7(b) applies only to mediation conducted in a court-annexed alternative dispute resolution program. The Court of Appeal also concluded that plaintiff failed to show it was impossible, impracticable or futile to bring his case to trial within five years. (C.A. 2nd, filed December 15, 2015, published January 14, 2016).

Civil Rights
Fetters v. County of Los Angeles (2016) _ Cal.App.4th _ , 2016 WL 98581: The Court of Appeal reversed a $1.1 million compensatory damages jury verdict for plaintiff, and an attorney fee award of over $2 million, following the trial court’s ruling, in a bifurcated bench trial, denying defendant’s argument that, under Heck v. Humphrey (1994) 512 U.S. 477, 114 S.Ct. 2364, 129 L.Ed.2d 383 (Heck), plaintiff’s 42 U.S. Code section 1983 claim was barred by his plea bargain in a juvenile court proceeding that admitted he had brandished an imitation firearm so as to cause the two deputies and a third party fear of bodily harm. The Court of Appeal concluded the trial court erred in denying the Heck defense because plaintiff was convicted and/or sentenced for brandishing an imitation firearm, a judgment for plaintiff in his section 1983 action would necessarily imply the invalidity of his conviction and sentence, and the dismissal of the criminal petition against plaintiff following his successful completion of probation was not a termination of the criminal proceeding in his favor. (C.A. 2nd, January 8, 2016.)

Corporations
Speirs v. Bluefire Ethanol Fuels, Inc. (2015) _ Cal.App.4th _ : The Court of Appeal affirmed in part, and reversed in part, the trial court’s rulings following a bench trial in a case where plaintiffs alleged breach of fiduciary duty and breach of warrant agreements after defendant refused to apply an anti-dilution provision in the warrants to an equity line of credit transaction entered into by defendant. The Court of Appeal agreed with the trial court’s ruling that the breach of fiduciary duty cause of action was unmeritorious as a matter of law. A corporation’s officers do not have a fiduciary duty to warrant holders. The Court of Appeal also agreed with the court’s interpretation of plaintiffs’ warrants. The anti-dilution provision applied to the equity credit line agreement and stock issuances to the finance company resulting from that agreement. However, the Court of Appeal found that the trial court erred in reducing plaintiffs’ exercise price to $0 because substantial evidence did not support that decision. The matter was reversed and remanded for retrial solely on the proper remedy for defendant’s breach of contract. (C.A. 4th, filed December 15, 2015, published January 12, 2016.)

Employment
Alvarado v. Dart Container Corporation of California (2016) _ Cal.App.4th _ , 2016 WL 164636: The Court of Appeal affirmed the trial court’s summary judgment for defendant. The sole question was whether defendant’s formula for calculating overtime on flat sum bonuses paid in the same pay period in which they are earned was lawful. There is no California law specifying a method for computing overtime on flat sum bonuses. Because defendant’s formula complied with federal law, which provides a formula for calculating bonus overtime, defendant’s formula was lawful. (C.A. 4th, filed January 14, 2016.)

Insurance
Vardanyan v. Amco Insurance Company (2015) _ Cal.App.4th _ , 2015 WL 9654037: The Court of Appeal reversed the trial court’s directed verdict for defendant based upon a special jury instruction the trial court decided to give regarding coverage. The special instruction requested by defendant ran afoul of the efficient proximate cause rule in California. A policy cannot extend coverage for a specified peril, then exclude coverage for a loss caused by a combination of the covered peril and an excluded peril, without regard to whether the covered peril was the predominant or efficient proximate cause of the loss. The trial court erred in deciding to give the special instruction rather than CACI No. 2306. The Court of Appeal also concluded that the special instruction was improper because it placed on plaintiff the burden of proving his loss fell within the contested coverage provision, instead of requiring defendant to prove that the loss was excluded. (C.A. 5th, filed December 11, 2015, published January 7, 2016.)

Legal Malpractice
Kelly v. Orr (2016) _ Cal.App.4th _ , 2016 WL 107907: The Court of Appeal reversed the trial court’s order sustaining a demurrer, without leave to amend, in a legal malpractice action. The Court of Appeal ruled that the continuous representation tolling provision in Code of Civil Procedure section 340.6(a)(2) applies to toll legal malpractice claims brought by successor trustees against attorneys who represented the predecessor trustee. Because the first amended complaint alleged the predecessor trustee resigned on March 22, 2013, ending defendants’ representation of her as trustee, and because plaintiff’s complaint was filed on February 27, 2014, the action was not time-barred as a matter of law. (C.A. 4th, January 11, 2016.)

Real Property (Foreclosure)
Majd v. Bank of America, N.A. (2015) _ Cal.App.4th _ , 2015 WL 9304536: The Court of Appeal overruled in part, and affirmed in part, the trial court’s ruling sustaining a demurrer without leave to amend in a case alleging wrongful foreclosure. The Court of Appeal agreed with plaintiff’s contention that the foreclosure was wrongful because it occurred while the loan servicer was reviewing plaintiff’s loan for a modification under the Home Affordable Modification Program (HAMP), finding that plaintiff had stated a cause of action against the loan servicer for violation of Business and Professions Code section 17200 et seq. The Court of Appeal also reversed some of the orders denying leave to amend. It found that plaintiff had stated a cause of action for wrongful foreclosure, provided the party conducting the foreclosure sale was an agent of the loan servicer, and held that plaintiff should be given leave to amend to allege the agency relationship, if true. The Court of Appeal also concluded that plaintiff had stated a cause of action for cancellation of the trustee’s deed upon sale, but had failed to join the foreclosing trust deed beneficiary, an indispensable party, as a defendant. Provided the property was still owned of record by the foreclosing beneficiary, and not by a bona fide purchaser for value, the Court of Appeal ruled that plaintiff should be given leave to amend to add the foreclosing beneficiary as a party to the cause of action for cancellation of instruments. (C.A. 4th, filed December 21, 2015, published January 14, 2016.)

Torts (Wrongful Death)
Burgueno v. The Regents of the University of California (2015) _ Cal.App.4th _ , 2015 WL 9700324: The Court of Appeal affirmed the trial court’s order granting summary judgment to defendant, based upon the recreational trail immunity in Government Code section 831.4, in a wrongful death action arising from the death of a student riding a bike on Great Meadow Bikeway on the campus of the University of California, Santa Cruz. The trial court properly ruled that defendant had absolute immunity from claims arising from the accident on the Great Meadow Bikeway pursuant to the recreational trail immunity provided by section 831.4. (C.A. 6th, filed December 15, 2015, published January 13, 2016.)
King v. CompPartners, Inc. (2016) _ Cal.App.4th _ , 2016 WL 55505: The Court of Appeal affirmed the trial court’s order sustaining a demurrer, but reversed the denial of leave to amend. Because it was possible the complaint could have been amended to avoid the preemption of the Workers Compensation Act and to also allege a duty, leave to amend should have been granted. (C.A. 4th, January 5, 2016.)

Trusts and Estates
Gray v. Jewish Federation of Palm Springs and Desert Area (2016) _ Cal.App.4th _ , 2016 WL 104651: The Court of Appeal affirmed the trial court’s judgment for defendant and against plaintiff (the sole net income beneficiary of the trust, and a former trustee). The Court of Appeal concluded that Probate Code section 16373 provides that, if an amount is to be distributed from income, such as a broker’s commission on a new lease, but there is not enough income to pay for the item and maintain disbursements to the income beneficiary, the trustee can pay for the items out of the principal. However, the trustee must pay back the principal over time for the use of principal to pay income expenses if it did not set up a reserve to pay for the items. The trial court’s judgment properly concluded that plaintiff was owed $47,913.58 in underpaid income but the principal had been overcharged $61,749.01, so plaintiff should pay the difference out of income. Plaintiff was also properly ordered to pay $28,000 in attorney’s fees to defendant for bad faith and unreasonable objections to accountings. Plaintiff was properly ordered to pay $12,709.45 to defendant for the objections and her appeal regarding a petition she had filed, and was properly ordered to reimburse the trust $12,608 for her trustee fees. (C.A. 4th, January 6, 2016.)

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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