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A monthly publication of the Litigation Section of the California Lawyers Association.

  • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
  • Managing Editor, Julia C. Shear Kushner
  • Editors, Dean Bochner, Colin P. Cronin, Jenn French, Jennifer Hansen, Ryan Wu
Social Services and Social Workers Sued.

Plaintiffs are parents of two young children, one of whom has severe autism. After consultation with medical professionals, the parents received a recommendation for their autistic daughter to begin medical marijuana therapy. Following an anonymous report, social workers from the Department of Child and Family Services of the County of Los Angeles (DCFS) investigated the report, obtained a judicial order authorizing them to remove both children, and placed them in foster care. Alleging numerous deficiencies in DCFS’s investigative and removal processes including unreasonable seizure under Fourth Amendment and violation of parents’ and children’s First Amendment right to be free from unjustified, unreasonable, and unlawful interference in their relationship, the parents, on their own and as guardians ad litem for their minor children, sued DCFS and individual social workers under 42 U.S.C. § 1983. The district court granted summary judgment for defendants on most of the claims and the remaining claims went to a jury trial. The jury returned a verdict for defendants. The Ninth Circuit reversed in part and remanded the matter for further proceedings. (Scanlon v. County of Los Angeles (9th Cir., Feb. 2, 2024) 92 F.4th 781.)

Complications Regarding an Implied Easement. 

A trial court concluded that the parties to a 1986 division and sale of two adjacent residential properties intended to create an implied easement over an eight-foot-wide strip of land that belonged to one parcel, but that had been used as the driveway to the home on the neighboring parcel. As a consequence, the current owners of the neighboring parcel could continue to use that strip of land as a driveway. The Court of Appeal reversed, concluding the easement could have been created only in a written instrument and not by implication. Reversing the judgment of the Court of Appeal and remanding the matter, the California Supreme Court stated: “The evidentiary standard for recognizing an implied easement is a high one, and that standard will naturally be more difficult to meet where, as here, the nature of the easement effectively precludes the property owners from making most practical uses of the easement area. But if there is clear evidence that the parties to the 1986 sale intended for the neighboring parcel’s preexisting use of the area to continue after separation of title, the law obligates courts to give effect to that intent. We reverse and remand for the Court of Appeal to consider whether substantial evidence supports the trial court’s finding that an implied easement existed under the circumstances of this case.” (Romero v. Shih (Cal., Feb. 1, 2024) 15 Cal.5th 680.)

Sexual Predator.

Plaintiff was a tenured professor at a University of California campus. In 2017, an anonymous letter was published online, accusing plaintiff of engaging in a pattern of sexual intimidation, harassment, and assault against young women and gender nonconforming people during his time as a professor. The letter contained seven anonymous firsthand accounts of plaintiff’s alleged abuse and called on the university to act. Over 150 people signed this letter to show their support. In response, the university issued a statement that it was aware of the letter and asked individuals with relevant information to contact the Title IX office to assist its investigation. After completing the Doe investigation, the investigator found plaintiff engaged in “unwelcome physical conduct of a sexual nature” which is conduct that falls squarely within the definition of prohibited conduct under the University of California Policy on Sexual Harassment. Plaintiff was dismissed from his position and his petition for an administrative writ was denied by the trial court. Affirming, the Court of Appeal stated: “The University found clear and convincing evidence that plaintiff egregiously sexually abused [two women].” (Balakrishnan v. Regents of University of California (Cal. App. 1st Dist., Div. 5, Feb. 1, 2024) 99 Cal.App.5th 513.)

The Whistleblower Anti-Retaliation Provisions in the Sarbanes-Oxley and Dodd-Frank Acts Do Not Apply Outside the United States. 

Plaintiff is a Canadian citizen and a former employee of defendant. Both Oracle America and Oracle Canada are wholly owned subsidiaries of Oracle Corporation, a California-based company that develops and hosts software applications for institutional customers. While residing in Canada, plaintiff worked remotely and could conduct business and collaborate with colleagues in the U.S. including employees of Oracle America. Plaintiff came to believe that one of the products Oracle was offering in Texas, Utah, and Washington could not be delivered with the promised features at the agreed-upon price. Plaintiff reported the suspected fraud to Oracle America and the SEC. After doing so, he was removed as the project manager and his job rating was downgraded. Plaintiff resigned and sued Oracle for violation of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1514A), the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. § 78u-6(h)(1)), and California law (Lab. Code, § 1102.5), by retaliating against him for protected whistleblower activity. The district court dismissed the action. Affirming, the Ninth Circuit held that the whistleblower anti-retaliation provisions in the Sarbanes-Oxley and Dodd-Frank Acts do not apply outside the U.S. (Daramola v. Oracle America, Inc. (9th Cir., Feb. 6, 2024) 92 F.4th 833.)

Friends with Benefits Is Not a Dating Relationship.

According to the complaint, defendant was driving plaintiff in his car to a place where the two intended to have sex. Defendant kissed plaintiff and asked if she liked it if he pulled her hair. Before plaintiff could respond, defendant grabbed plaintiff by the back of her head and “violently whipped her head around in several different directions.” Plaintiff heard the sounds of bones cracking in her neck. Plaintiff saw a doctor the next day and was diagnosed with a concussion, muscle spasms, cervical whiplash, and cervicalgia (neck pain). Plaintiff sued defendant; she alleged two causes of action: (1) domestic violence under Civil Code § 1708.6; and (2) sexual battery under Civil Code § 1708.5. The trial court sustained defendant’s demurrer to the second cause of action for sexual battery without leave to amend. The remaining cause of action for domestic violence proceeded to a bench trial. The trial court entered judgment for defendant. Affirming, the Court of Appeal stated: “We simply conclude, on the specific record before us, substantial evidence supports the trial court’s finding that the relationship between plaintiff M.A. and defendant B.F. was not a dating relationship within the meaning of the relevant statutes.” (M.A. v. B.F. (Cal. App. 4th Dist., Div. 3, Feb. 5, 2024) 99 Cal.App.5th 559.)

Costs Under FEHA. 

A trial court awarded costs to defendant in a case under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA). In her appeal, plaintiff contended the court could not award costs to defendant unless it made a finding that the FEHA claims were objectively frivolous. Defendant countered that plaintiff forfeited her argument by failing to file a timely motion to tax costs. Reversing, the Court of Appeal stated: “While the prevailing defendant in an ordinary civil case is entitled to an award of statutory costs as a matter of right—and the filing of a cost memorandum is the proper means of securing a cost award in such cases—a different rule applies to a defendant in a FEHA case: the court has discretion to make such an award, but it must first make a finding that the plaintiff’s FEHA claims are frivolous.” (Neeble-Diamond v. Hotel California By the Sea, LLC (Cal. App. 4th Dist., Div. 3, Feb. 5, 2024) 99 Cal.App.5th 551.)

Plaintiff Need Not Prove “Retaliatory Intent” in Whistleblower Action.

In 2011, plaintiff was employed as a research strategist at securities firm UBS, within the firm’s commercial mortgage-backed securities business. In that role, he was responsible for reporting to current and future UBS customers. Securities and Exchange Commission regulations required him to certify that his reports were produced independently and accurately reflected his own views. (See 17 C.F.R. § 242.501(a).) According to plaintiff, two UBS leaders improperly pressured him to skew his reports to be more supportive of their business strategies, even instructing him to “clear [his] research articles with the desk” before publishing them. Plaintiff twice reported that conduct to his direct supervisor, asserting that it was “unethical” and “illegal.” UBS fired plaintiff and plaintiff filed a complaint with the Department of Labor alleging violation of § 1514A of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1514A), because he was fired in response to his internal reporting about fraud on shareholders. When the agency did not issue a final decision on his complaint within 180 days, plaintiff filed an action in federal court. The matter went to trial. The jury found that plaintiff had established his § 1514A claim and that UBS had failed to prove, by clear and convincing evidence, that it would have fired him even if he had not engaged in protected activity. The jury also issued an advisory verdict on damages, recommending that plaintiff receive nearly $1 million. The court then adopted the jury’s advisory verdict on damages and awarded an additional $1.769 million in attorney’s fees and costs. The Second Circuit panel vacated the jury’s verdict and remanded for a new trial. The circuit court identified the central question as “whether the Sarbanes-Oxley Act’s antiretaliation provision requires a whistleblower-employee to prove retaliatory intent,” and, contrary to the trial court, it concluded that the answer was yes. Reversing the judgment of the Second Circuit and resolving a circuit split, the U.S. Supreme Court held: “A whistleblower who invokes 18 U. S. C. §1514A bears the burden to prove that his protected activity ‘was a contributing factor in the unfavorable personnel action alleged in the complaint,’ 49 U. S. C. §42121(b)(2)(B)(i), but he is not required to make some further showing that his employer acted with ‘retaliatory intent.’” (Murray v. UBS Securities, LLC (U.S., Feb. 8, 2024) 601 U.S. 23.)

A Consumer May Sue “Any” Federal Agency for Defying the Law’s Terms.

A man secured a loan from the Rural Housing Service. The service, a division of the United States Department of Agriculture (USDA), issues loans to promote the development of safe and affordable housing in rural communities. The man later sued the USDA, alleging the USDA falsely told a credit reporting agency that his account was past due, thus damaging his credit score and his ability to secure loans at affordable rates. The district court dismissed the action and the Third Circuit reversed. The U.S. Supreme Court noted: “A credit report can determine everything from whether a person can secure a credit card, purchase a home, win a new job, or start a small business. Recognizing the importance of accuracy in credit reporting, Congress adopted the Fair Credit Reporting Act in 1970 (FCRA). In its present form, the Act allows consumers to sue private lenders who willfully or negligently supply false information about them to agencies that generate credit reports. The question we face is whether one of the Nation’s largest lenders—the federal government—is also susceptible to suit when it supplies false information, or whether it may invoke sovereign immunity to avoid liability.” Siding with the consumer, the highest court in the land stated: “A consumer may sue ‘any’ federal agency for defying the law’s terms. Because it faithfully followed this legislative direction, the judgment of the Court of Appeals for the Third Circuit is Affirmed.” (Department of Agriculture Rural Development Rural Housing Service v. Kirtz (U.S., Feb. 8, 2024) 144 S.Ct. 457.)

Liability Waiver Upheld.

Plaintiff and his wife went on a chartered scuba and snorkeling tour in Hawaii. They boarded a boat owned by defendants at Lahaina Harbor and traveled to a crater. Before boarding, they signed a liability waiver. Plaintiff’s wife drifted away from the others while in the water. A search ensued, but she was never found. Plaintiff sued, alleging negligence, and defendants asserted waiver and release as an affirmative defense. The district court struck the defense on the ground that the liability waivers were void under 46 U.S.C. § 30527(a), which prohibits certain liability waivers regarding “vessel[s] transporting passengers between ports in the United States or between a port in the United States and a port in a foreign country.” Reversing, the Ninth Circuit held that, under the plain meaning of “between ports in the United States,” § 30527(a) does not apply to vessels that transport passengers away from and back to a single port without stopping at any other port. (Ehart v. Lahaina Divers, Inc. (9th Cir., Feb. 8, 2024) 92 F.4th 844.)

Modification of a Trust.

 It is undisputed that if a trust instrument is silent on modification, the trust may be modified in the same way it could be revoked, via either the statutory method or any revocation method provided in the trust instrument. Here, the California Supreme Court considered the circumstances under which the statutory method is available for modification if the trust instrument specifies a method for modification. California’s highest court held that “under [Probate Code] section 15402, a trust may be modified via the section 15401 procedures for revocation, including the statutory method, unless the trust instrument provides a method of modification and explicitly makes it exclusive, or otherwise expressly precludes the use of revocation procedures for modification.” (Haggerty v. Thornton (Cal., Feb. 8, 2024) 15 Cal.5th 729.)

Water Replenishment Fees Must Be Paid Before Bringing Suit Against Groundwater Sustainability Agency.

The Court of Appeal affirmed the trial court in concluding “the well-established ‘pay first’ rule applies to lawsuits challenging fees imposed by a local groundwater sustainability agency under SGMA [the Sustainable Groundwater Management Act (Wat. Code, § 10720 et seq.)]. Because any alleged economic harm to [petitioners] stems from the imposition of the replenishment fee, we further conclude the ‘pay first’ rule bars the challenged causes of action.” (Mojave Pistachios, LLC v. Superior Court of Orange County (Cal. App. 4th Dist., Div. 3, Feb. 8, 2024) 99 Cal.App.5th 605.)

Sanchez Issue Pops Up in Family Law Case.

In People v. Sanchez (2016) 63 Cal.4th 665, the California Supreme Court identified the situations in which an Evidence Code § 730 expert witness may relate hearsay evidence. The court confirmed that an expert may rely on hearsay in forming an opinion but concluded an expert may not relate case-specific facts asserted in hearsay statements “unless they are independently proven by competent evidence or are covered by a hearsay exception.” At issue here was the value of the family home. An expert wanted to testify the square footage of the lot exceeded the number shown on county documents. The family court excluded the testimony, absent competent evidence independently proving the square footage. Affirming, the Court of Appeal stated: “The trial court did not err because [the proponent of the testimony] failed to present competent evidence independently proving her assertion that the lot size exceeded 9,000 square feet. Without such evidence, testimony from her appraiser on that topic was inadmissible hearsay.” (In re Marriage of Lietz (Cal. App. 4th Dist., Div. 3, Feb. 8, 2024) 99 Cal.App.5th 664.)

No Evidence Landlords Knew Tenant’s Dogs Were Dangerous.

Plaintiff was attacked by two pit bulls who escaped from a family residence owned by defendant landlords. The owner of the pit bulls rented the home from defendants. A jury returned a verdict of $600,000 for plaintiff, but the trial court granted judgment for defendants  notwithstanding the jury’s verdict (JNOV). The appeals court noted that the only evidence plaintiff relied on to establish defendants knew the dogs were dangerous was an email from a next-door neighbor, which said: “Hi Lilyana and Ali [defendants]– [¶] I hope that you are getting a nice mini break with the holiday. [¶] Lorne and I wanted to let you know of your house. We aren’t sure how much you know. There is a new person living there. It is the same woman but it seems she may be either subletting or have an extended guest. [¶] We are not sure about your arrangement with the tenants. But your lawn and side yard are overgrown. A family of ferral [sic] cats were living in your side yard. I don’t know what will happen to the babies as we saw the mom dead in the driveway of another neighbor yesterday (and what prompted me to let you know). This is from the side we share. The weeds on your side are taller than the bushes between our homes. [¶] On the good end, they are no longer burning left over marijuana plants and they are so quiet. Even the 2 guard dogs in the back are quiet. [¶] Hopefully, it’s just the outside and inside is in good repair. We are not sure if you have a property manager who can check things out. [¶] We do miss having neighbors that we can talk to. [¶] Leigh.” Affirming the JNOV, the Court of Appeal stated: “This e-mail is neither direct nor circumstantial evidence that defendants knew or must have known the tenant’s dogs were vicious.” (Fraser v. Farvid (Cal. App. 2nd Dist., Div. 8, Feb. 9, 2024) 99 Cal.App.5th 760.)

PAGA Case Remanded to Lower Court to Apply Adolph v. Uber Techs, Inc. 

Plaintiff is the representative in a Private Attorneys General Act (Lab. Code, § 2698 et seq.; PAGA) case against defendant, her former employer, with whom she entered into a predispute arbitration agreement. Plaintiff also asserted individual claims against defendant. The trial court dismissed the representative claims and ordered the individual claims to arbitration. The Ninth Circuit affirmed the order compelling arbitration of the individual claims and reversed in part the order dismissing the representative claims, remanding to the lower court to apply Adolph v. Uber Techs., Inc. (2023) 14 Cal.5th 1104, 1114. (Johnson v. Lowe’s Home Centers, LLC (9th Cir., Feb. 12, 2024) 93 F.4th 459.)

Online Arbitration Agreement Passes Muster.

Plaintiffs purchased some products online from defendant. After hackers stole plaintiffs’ personal identifying information from defendant, plaintiffs sued defendant under several legal theories. The district court ordered the matter to arbitration pursuant to an arbitration provision in the parties’ agreement and dismissed the lawsuit. Affirming, the Ninth Circuit stated: “The notice [of the arbitration provision] is on an uncluttered page and is not hidden or obscured. The notice is clear and legible, and the hyperlinked phrase ‘terms of use’ is colored bright green—contrasted against the surrounding white background and adjacent black text. Moreover, the ‘terms of use’ hyperlink is the same color as other clickable links on the page, suggesting clearly that it is a hyperlink.” (Patrick v. Running Warehouse, LLC (9th Cir., Feb. 12, 2024) 93 F.4th 468.)

Pre-Enforcement Standing.

Plaintiff, the owner of a mobile home park, claimed that if it were to raise mobile home rents more than AB 978 allows, the Attorney General would enforce AB 978 and seek sanctions against it. The district court dismissed the case for lack of standing because the plaintiff also alternatively alleged that AB 978 does not apply to its mobile home park. Reversing, the Ninth Circuit stated: “This peculiar posture unearths a nuance of pre-enforcement standing: Is a pre-enforcement injury the threat of enforcement or the threat of successful enforcement? We conclude that the substantial threat of enforcement, and not the likelihood that any such enforcement action would ultimately lead to sanctions, drives our analysis.” (Peace Ranch, LLC v. Bonta (9th Cir., Feb. 13, 2024) 93 F.4th 482.)

City Was Released from Liability Because Plaintiff Signed a Release.

During a training ride for a fundraiser, plaintiff was injured when his bicycle hit a pothole. He sued the city. Before the ride, plaintiff signed a release. The trial court granted summary judgment for the city. Affirming, the Court of Appeal quoted the entire release, which included the language: “Risks associated with the Event may include, but are not limited to: [¶] using public streets and facilities where hazards such as broken pavement and road debris may exist” The court concluded the release of liability was enforceable. (Whitehead v. City of Oakland (Cal. App. 1st Dist., Div. 3, Feb. 13, 2024) 99 Cal.App.5th 775.)

The Racial Justice Act. 

A criminal defendant was the subject of a traffic stop by a San Diego Police officer, which led to the man’s arrest on a misdemeanor concealed firearm violation. Defendant contended he was stopped because he is Black, but the police officer testified he didn’t know the race of the persons in the car when he stopped it. Accepting the officer’s statement as credible, the trial court did not find that the officer exhibited any bias because of the man’s race and denied defendant’s motion. The Court of Appeal discussed the Racial Justice Act (Pen. Code, § 745; RJA) extensively. The RJA permits a defendant to seek relief regardless of whether the police officer who arrested him did so purposefully based on his race. Issuing a writ of mandate and remanding, the appellate court stated: “By relying on its conclusion that [the officer] was not lying when he said he could not discern the race of the occupants in [defendant’s] vehicle, the court ignored the possibility that the officer’s actions were a product of an implicit bias that associated things the officer did know—the location of the stop and the clothing defendant] was wearing—with race. Accordingly, we will issue a writ directing the court to conduct a new hearing at which it considers whether [the officer’s] actions in initiating and conducting the traffic stop exhibited implied bias on the basis of race.” (Bonds v. Superior Court of San Diego County (Cal. App. 4th Dist., Div. 1, Feb. 14, 2024) 99 Cal.App.5th 821.)

IDEA: Individuals with Disabilities Education Act. 

The parents of a profoundly deaf child with cochlear implants filed a due process complaint with the California Office of Administrative Hearings because they were not satisfied with a school district’s education plan for the child. The administrative judge ordered the school district to pay for the child to attend a private school in Los Angeles with a program geared to help the child catch up to peers in language skills. The school district filed an action under the federal Individuals with Disabilities Education Act (20 U.S.C. § 1400 et seq.; IDEA), contending the administrative judge erred. The district court agreed with some of the administrative judge’s findings and orders and disagreed with others. The child and parents appealed. Agreeing with the orders and findings of the administrative judge, the Ninth Circuit stated: “The school district violated the IDEA in several ways: by failing to indicate clearly the frequency and duration of the services offered, by failing to offer [the child] a meaningful benefit, and by not placing her in the least restrictive environment appropriate for her.” (Los Angeles Unified School District v. A.O. by & through Owens (9th Cir., Feb. 15, 2024) 92 F.4th 1159.)

Court Erred in Denying Request to Continue Trial, but Error Was Harmless.

The father’s attorney in a family law case withdrew the day before the trial on a child custody issue. The family court denied the father’s request to continue the trial due to lack of representation. The Court of Appeal agreed the trial court abused its discretion, but affirmed the lower court on lack of prejudice, stating: “Here, the trial court never inquired about the length of the continuance that was being sought or might be required, making it impossible to perform the required balancing analysis. Instead, it simply declared there would be no continuance and then (commendably) attempted to explain what it could do to accommodate the now-self-represented family law litigant. It is thus the failure to inquire and assess that constitutes an abuse of discretion in this case. Even so, however, [the father] has not shown that the court’s error resulted in a ‘miscarriage of justice’ for purposes of article VI, section 13 of the California Constitution.” (In re Marriage of Tara & Robert D. (Cal. App. 4th Dist., Div. 1, Feb. 16, 2024) 99 Cal. App. 5th 871.)

Potential Jurors Excused for Holding “Conservative Christian Beliefs.” 

The Missouri Department of Corrections filed a petition for writ of certiorari in the U.S. Supreme Court in an employment case regarding an issue that arose during voir dire. Plaintiff is a lesbian who “presents masculine” and alleged she was stereotyped and discriminated against based on sex. Plaintiff’s attorney asked several questions about whether jurors held “conservative Christian beliefs.” When some said yes, counsel asked the court to strike them for cause, arguing, “I don’t think that you can ever rehabilitate yourself, no matter what you turn around and say after that.” The court disagreed, explicitly finding that the jurors “were very clear in that they could be absolutely fair and impartial” and that they believed “everyone needs to be treated equally.” But the court struck them anyway for their religious beliefs “to err on the side of caution.” On appeal, the court agreed the jurors were struck because of their religious “views,” but held that the strike was not unlawful because it was not based on religious “status.” The nation’s high court denied the writ of certiorari. Justice Alito wrote separately: “In this case, the court below reasoned that a person who still holds traditional religious views on questions of sexual morality is presumptively unfit to serve on a jury in a case involving a party who is a lesbian. That holding exemplifies the danger that I anticipated in Obergefell v. Hodges, 576 U. S. 644 (2015), namely, that Americans who do not hide their adherence to traditional religious beliefs about homosexual conduct will be ‘labeled as bigots and treated as such’ by the government. Id., at 741 (dissenting opinion). The opinion of the Court in that case made it clear that the decision should not be used in that way, but I am afraid that this admonition is not being heeded by our society.” (Missouri Department of Corrections v. Finney (U.S., Feb. 20, 2024) 2024 WL 674657.)

Asian Americans Allege Discrimination.

A group of parents of children who are students in a high school in Alexandria, Virginia alleged a school board overhauled its admissions, and that those changes were adopted to racially balance the freshman class by excluding Asian Americans. The district court granted summary judgment for plaintiffs and the Fourth Circuit reversed, finding the plaintiffs’ claim failed simply because the challenged changes did not reduce the percentage of Asian American admittees below the percentage of Asian American students in the schools in the jurisdictions served by the magnet school, and concluding the admission changes did not violate the Equal Protection Clause. The U.S. Supreme Court denied certiorari.  Justice Alito, joined by Justice Thomas, dissented to the denial of certiorari, stating: “What the Fourth Circuit majority held, in essence, is that intentional racial discrimination is constitutional so long as it is not too severe. This reasoning is indefensible, and it cries out for correction. [¶] . . . [¶] Consider the following hypothetical case. Suppose that white parents in a school district where 85 percent of the students are white and 15 percent are black complain because 10 of the 12 players (83 percent) on the public high school basketball team are black. Suppose that the principal emails the coach and says: ‘You have too many black players. You need to replace some of them with white players.’ And suppose the coach emails back: ‘Ok. That will hurt the team, but if you insist, I’ll do it.’ The coach then takes five of his black players aside and kicks them off the team for some contrived—but facially neutral—reason. For instance, as cover, he might institute a policy that reserves a set number of spots on the roster for each of the middle schools who feed to the high school. According to the reasoning of the Fourth Circuit majority, this action would not violate equal protection because the percentage of black players left on the team (approximately 42 percent) would exceed the percentage of black students in the school. I cannot imagine this Court’s sustaining such discrimination, but in principle there is no difference between that imaginary case and one now before us.” (Coalition for TJ v. Fairfax County School Board (U.S., Feb. 20, 2024) 2024 WL 674659.)

Choice of Law. 

A Pennsylvania business purchased a policy to insure its boat from an insurance company organized in Germany and headquartered in the United Kingdom. The insurance contract included a choice-of-law provision that selected New York law to govern future disputes between the parties. Years later, the insured’s boat ran aground near Fort Lauderdale, Florida. The insurance company denied coverage, asserting the insured breached the contract by failing to maintain the boat’s fire-suppression system, even though the boat’s fire-suppression system did not contribute to the accident. In federal court, the insurance company contended New York law applied and the insured advanced claims under Pennsylvania law. The district court agreed with the insurance company, reasoning that federal maritime law regards choice-of-law provisions as presumptively valid and enforceable. The Third Circuit vacated that judgment, holding that choice-of-law provisions in maritime contracts are presumptively enforceable as a matter of federal maritime law, but nonetheless must yield to a strong public policy of the state in which suit is brought—here, Pennsylvania’s public policy regarding insurance. The U.S. Supreme Court held: “Applying federal maritime law in this case, we conclude that choice-of-law provisions in maritime contracts are presumptively enforceable, with certain narrow exceptions not applicable here.” (Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC (U.S., 2024) 144 S. Ct. 637.)

The Repugnancy Doctrine Meets Double Jeopardy.

 A Georgia jury found that a man was “not guilty by reason of insanity” with respect to a malice-murder count but was “guilty but mentally ill” regarding two other counts—felony murder and aggravated assault—all of which pertained to the same underlying homicide. Invoking the repugnancy doctrine (meaning that affirmative findings by a jury that are not legally and logically possible of existing simultaneously), Georgia courts nullified both the “not guilty” and “guilty” verdicts, and authorized retrial. In the U.S. Supreme Court, the man maintained that the Fifth Amendment’s double jeopardy clause prevented Georgia from retrying him for the crime that had resulted in the “not guilty by reason of insanity” finding. The high court agreed with the man, stating: “Under the circumstances presented here, we agree. The jury’s verdict constituted an acquittal for double jeopardy purposes, and an acquittal is an acquittal notwithstanding its apparent inconsistency with other verdicts that the jury may have rendered.” (McElrath v. Georgia (U.S., Feb. 21, 2024) 144 S.Ct. 651.)

Abuse of Discovery Process Has Consequences. 

A district court concluded that defendants repeatedly failed to obey court orders related to discovery and entered default judgment against them. Affirming, the Ninth Circuit stated: “Concluding that defendants had repeatedly failed to obey court orders related to the discovery process, the district court ultimately entered default judgment against them. Defendants have timely appealed the judgment, but their arguments in this court are frivolous. [¶] . . . [¶] In view of the frivolous nature of this appeal and the multiple misstatements made by counsel at oral argument, we have ordered Defendants and their counsel, by separate order filed contemporaneously herewith, to show cause why this court should not impose sanctions against them . . . . Defendants’ counsel is likewise ordered to show cause why this court should not refer this matter to the State Bar of California.” (Transamerica Life Insurance Company v. Arutyunyan (9th Cir., Feb. 22, 2024) 2024 WL 719045.)

Decision of State Agency Has No Preclusive Effect on Plaintiff’s Suit Under 42 U.S.C. § 1983. 

California law requires that all thoroughbreds racing in California be registered with a private organization called the Jockey Club of New York (Cal. Bus. & Prof. Code, § 19416; Cal. Code Regs., tit. 4, § 1588, subd. (a)(1).) The Jockey Club refused to register plaintiffs’ horse because it concluded the horse’s name made it ineligible for registration. (The horse’s name is Malpractice Meuser, and the Jockey Club believed that Malpractice Meuser was named for Michael D. Meuser, a Kentucky lawyer specializing in equine law.) Because of the lack of registration, the Los Alamitos Board of Stewards denied entry for a race. Plaintiffs appealed that decision to the California Horse Racing Board (CHRB), which affirmed the determination the horse could not race absent Jockey Club registration. Plaintiffs filed a federal action under 42 U.S.C. § 1983 against individuals and the CHRB. The district court concluded that because the CHRB had already considered plaintiffs’ constitutional claims and plaintiffs had not challenged the CHRB’s decision in state court, the CHRB decision precluded plaintiffs’ § 1983 lawsuit. Reversing, the Ninth Circuit stated: “We have never held that an agency’s jurisdiction-wanting non-decision has preclusive effect in a later § 1983 suit. Nor have we held that the failure to pursue state court review of such a non-decision precludes a corresponding § 1983 claim in federal court. Those propositions are inconsistent with settled precedent.” (Jamgotchian v. Ferraro (9th Cir., Feb. 26, 2024) 2024 WL 764080.)

In Seeking Relief After Waiving Trial by Jury in a Civil Case, Prejudice Must Be Shown. 

The California Constitution provides that all civil litigants have the right to trial by jury, but they may waive that right in a manner prescribed by statute. (Cal. Const., art. I, § 16.) The statute implementing this provision, Code of Civil Procedure § 631, sets forth various acts and omissions that constitute jury waiver, including failing to make a timely jury demand and failing to timely deposit a jury fee in accordance with statutory requirements. A litigant that has waived jury trial may seek relief from the waiver. The trial court has discretion whether to grant relief, on such terms as may be just. (Code Civ. Proc., § 631, subd. (g).) The California Supreme Court explained that discretion: “This case raises two questions about the adjudication of requests for relief from jury waiver under section 631(g). The first question concerns proceedings in the trial court: Must a trial court always grant relief from a jury waiver if proceeding with a jury would not cause hardship to other parties or to the trial court? We conclude that the answer is no; a trial court’s discretion is not so constrained. The presence or absence of hardship is always a primary consideration, and it is often dispositive in cases where the litigant has given timely notice that it desires a jury trial and seeks relief from mere technical statutory waiver, such as failure to post the required jury fee at the correct time or in the correct amount. But a request for relief from jury waiver always calls for consideration of multiple factors in addition to hardship, including the timeliness of the request and the reasons supporting the request. The second question concerns proceedings on appeal: If a litigant challenges the denial of relief from jury waiver for the first time on appeal of the judgment of the trial court, must the litigant show actual prejudice to obtain reversal, or will prejudice be presumed? We conclude that, where the constitutional right of jury trial has been validly waived, prejudice from the denial of section 631(g) relief will not be presumed but must be shown.” (Tricoast Builders, Inc. v. Fonnegra (Cal., Feb. 26, 2024) 2024 WL 763422.)

The Statute Governing Notice of Cancellation of an Automobile Insurance Policy Also Requires Notice to the Named Insured.

Plaintiff is an adult who still lives with her parents. She owns a car, but her parents kept her on their automobile insurance policy. Due to a glitch at their bank, the parents’ automatic payment to the insurance company was not made. The insurance company sent a notice of cancelation to the parents, but not to the plaintiff. Four days later, plaintiff caused a serious car accident resulting in grave injuries to her passenger and another driver. The insurance company denied plaintiff both a defense and indemnity. Plaintiff and her parents sued the insurance company for breach of contract and bad faith. The trial court granted summary judgment for the insurance company. Reversing, the Court of Appeal stated: “The statute governing notice of cancellation of an automobile insurance policy also requires notice to ‘the named insured.’ (§ 662, subd. (a).)” (Molinar v. 21st Century Insurance Company (Cal. App. 4th Dist., Div. 1, Feb. 26, 2024) 2024 WL 772632.)

Trial Court Did Not Abuse Discretion in Finding DocuSign Certificate Signing Time Did Not Comply with the Business Records Exception of Evidence Code § 1271 in Motion to Compel Arbitration. 

At the time plaintiff allegedly entered into a 25-year loan contract for $52,564.28 with an arbitration provision, she was 81 years old and lived on Social Security payments of less than $1,000 per month. She did not know her email address or how to access email.  The salesman asked her for phone to use it to try and find her email address.   The salesman asked her to put her finger on his electronic tablet but did not say she would be signing anything. After he pressed plaintiff’s fingers on his tablet, the salesman left and did not provide any paperwork. A few days later, workers came to plaintiff’s home and installed solar panels. A man from a company she never heard of called her and told her she was responsible for a 25-year loan. She was shocked and panicked, in part because she would be 106 years old by the time the loan was paid off. She told the person she thought she was the recipient of a government program to lower her utility bill. The contract had a DocuSign page. A DocuSign certificate showed that the loan agreement was viewed at 3:48:36 p.m. and fully executed at 3:49:14 p.m. (38 seconds between). Plaintiff sued defendants and both defendants moved to compel arbitration. The trial court denied the motion to compel arbitration. Affirming, the Court of Appeal stated: “The issue is whether the viewing-time and signing-time information contained in the DocuSign certificate meets the business record hearsay exception of section 1271. Viewing this issue through the prism of the deferential abuse of discretion standard, we detect no error by the trial court.” (Jones v. Solgen Construction, LLC (Cal. App. 5th Dist., Feb. 26, 2024) 2024 WL 772605.)

Another Case Sent Back to Court After Defendant Failed to Timely Pay Arbitration Fees.

A case was sent to JAMS for arbitration and an arbitrator was selected. Code of Civil Procedure § 1281.98 states that “. . . if the fees or costs . . . are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel the employee or consumer to proceed with that arbitration as a result of the material breach.”

July 29, 2022: JAMS sent an invoice to defendant for $32,300. The invoice stated it was due to be paid within 30 days.

August 29, 2022: JAMS sent another invoice for $11,760. The invoice stated it was due to be paid within 30 days.

September 30, 2022: JAMS sent a letter stating: “Pursuant to our fee and cancellation policy, all fees must be paid in full by October 28, 2022, or your [arbitration] hearing may be subject to cancellation.”

September 30, 2022: Plaintiff notified JAMS and the court that because defendant did not pay within 30 days of the due date, he was “unilaterally elect[ing]” to withdraw his claims from arbitration and to proceed in court pursuant to CCP § 1281.98 (b)(1). 

October 5, 2022: Defendant paid its fees. 

October 6, 2022: Plaintiff filed a motion in Superior Court to lift the litigation stay, which the trial court denied.

Plaintiff petitioned the Court of Appeal for extraordinary relief. Granting a writ of mandate, the appellate court directed the trial court to vacate its order denying plaintiff’s motion to lift the stay of litigation and stated: “The trial court’s ruling was inconsistent with statutory mandate as well as recent appellate opinions.” (Hohenshelt v. Superior Court of Los Angeles (Cal. App. 2nd Dist., Div. 8, Feb. 27, 2024) 2024 WL 805658.)

Mental Health, DUIs & the Vehicle Code’s Prohibition of Diversion.

A woman was accused of driving under the influence in four different misdemeanor cases, all violations of Vehicle Code § 23152, subdivision (a). While the charges were pending, a doubt arose as to her mental competence. (Pen. Code, § 1368.) Criminal proceedings were suspended after she was found incompetent to stand trial. The woman was evaluated and found suitable for outpatient treatment through mental health diversion. However, the trial court concluded she was ineligible for such treatment because Vehicle Code § 23640 prohibits diversion in cases where a defendant is charged with driving under the influence. The woman sought dismissal of her four cases, arguing dismissal was required under Penal Code § 1370.01, subdivision (b)(2), because she was ineligible for any of the treatment options in subdivision (b)(1)(D) of the statute. The woman sought extraordinary relief. While the Court of Appeal did not issue a writ of mandate, it nonetheless held: “We conclude Vehicle Code section 23640 does not interfere with a court’s ability to order mental health diversion treatment after a court has found a misdemeanor defendant mentally incompetent to stand trial and suspended criminal proceedings.”  (While not discussed in the current opinion, note that regarding veterans, Penal Code § 1001.80 specifically states that notwithstanding Vehicle Code § 23640’s prohibition against diversion for those accused of DUIs, veterans accused of DUIs may be diverted.) (Persiani v. Superior Court of Orange County (Cal. App. 4th Dist., Div. 3, Feb. 28, 2024) 2024 WL 833043.)

Child Psychologist Should Not Have Lost His License for Evaluating Children in Emergency.

The California Board of Psychology revoked a psychologist’s license after it found he violated the American Psychological Association’s Ethical Principles of Psychologists and Code of Conduct by evaluating two children for suicidality without their father’s consent, evaluating the children without consulting with their existing therapist, making custodial recommendations that went beyond emergency risk assessment and delegating the duty to warn the children’s father that one child had thoughts about killing him. The psychologist petitioned the superior court for a writ of mandamus, and the trial court denied the petition. Reversing the judgment of the superior court, the Court of Appeal stated: “The trial court found that Dr. Geffner violated Ethical Standards 3.10 and 9.03 by failing to obtain father’s consent before evaluating the children. Neither the Ethical Standards nor the evidence supports that conclusion. [¶] . . . [¶] . . . [M]other alone could consent if the children’s suicidal and homicidal ideations constituted an emergency. [¶] . . . [¶] . . . Ethical Standard 3.09 does not require psychologists to consult treating doctors in all situations.” (Geffner v. Board of Psychology (Cal. App. 2nd Dist., Div. 3, Feb. 28, 2024) 2024 WL 834986.)

Denial of Motion to Set Aside Dismissal of Pleading Affirmed.

The trial court dismissed a cross-complaint and then denied cross-complainant’s motion to set aside the judgment of dismissal pursuant to Code of Civil Procedure § 473 because the party’s attorney entered into a settlement agreement and filed for dismissal of the cross-complaint without express authorization. Affirming denial of the § 473 motion, the Court of Appeal stated: “[S]ubstantial evidence supports the conclusion that [the cross-complainant] ratified the unauthorized actions of its attorneys.” (W. Bradley Electric, Inc. v. Mitchell Engineering (Cal. App. 1st Dist., Div. 5, Feb. 28, 2024) 2024 WL 834926.)

No Showing University Promised Exclusive In-Person Classes During Pandemic.

During the COVID-19 pandemic, defendant university transitioned to remote, online learning. Plaintiffs sued defendant, alleging it breached its promise to provide in-person instruction and should refund a portion of their tuition payments. The trial court granted defendant’s motion for summary adjudication, concluding plaintiffs failed to raise a triable issue of fact whether defendant promised to provide exclusively in-person instruction. Affirming, the Court of Appeal stated: “ [T]here are no [] ‘unequivocal’ statements. Appellants rely on the following evidence to assert a contractual term for in-person instruction: (1) statements inviting them to ‘join a dynamic student body,’ ‘develop amazing friendships,’ ‘be surrounded by the best city ever,’ and ‘join . . . one of our admitted student visit days,’ and (2) documents referencing the physical locations of classes. Unlike the statements in Kashmiri [v. Regents of Univ. of California (2007) 156 Cal.App.4th 809,] which specifically mentioned fees, none of these statements provide a specific promise of exclusive in-person instruction for the duration of the Spring 2020 semester.” (Berlanga v. University of San Francisco (Cal. App. 1st Dist., Div. 3, (Feb. 29, 2024) 2024 WL 853813.)

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