Litigation
Litigation Update: November 2024
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, Austin Evans, Jenn French, Jennifer Hansen, Ryan Wu
“If I could offer you only one tip for the future, sunscreen would be it. The long-term benefits of sunscreen have been proved by scientists,” Baz Luhrmann, filmmaker (quoting Mary Schmich, Chicago Tribune columnist).
In his 1997 spoken-word song, Everybody’s Free (To Wear Sunscreen), Baz Luhrmann advises his audience to “Wear sunscreen,” telling listeners that it helps prevent skin cancer and that “[t]he long-term benefits of sunscreen have been proved by scientists.” Here, plaintiff called Mr. Luhrmann’s advice into question, alleging that the Banana Boat sunscreen she purchased was adulterated with benzene, a carcinogen that scientists have determined can cause cancer. Plaintiff sued six defendants who manufacture, market, and distribute Banana Boat sunscreen, claiming violations of various California statutes, including California’s False Advertising Law. Defendants moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), raising a factual challenge to plaintiff’s Article III standing by submitting evidence that a small amount of benzene in sunscreen is not unsafe. In response, plaintiff submitted evidence to support her allegation that benzene in sunscreen, at any level, is dangerous. The district court dismissed the action. Reversing, the Ninth Circuit stated: “Although a district court faced with a factual challenge to its exercise of jurisdiction may resolve disputed facts as to purely jurisdictional questions, it may not do so when those jurisdictional questions are intertwined with the merits of a claim. When the jurisdictional and merits issues are inseparable, the court must treat a factual attack on jurisdiction as a motion for summary judgment and construe disputed issues of fact in favor of the nonmoving party. Applying that standard here, Bowen has adequately established an injury in fact for purposes of Article III. So we reverse the district court’s dismissal for lack of standing and remand for further proceedings.” (Bowen v. Energizer Holdings, Inc. (9th Cir., Oct 1, 2024) 118 F.4th 1134.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/01/23-55116.pdf
Complaint Against Federal Judge.
A complainant alleged a federal judge made “abusive and unbecoming” statements during a hearing, and improperly suggested that he could “disbar” an attorney. The name of the judge was not disclosed. Dismissing the complaint, the Ninth Circuit stated: “The district judge suggested that he would take action to ensure the attorney no longer practiced law. Although judges may not inappropriately wield their influence to have an attorney disbarred, see In re Charges of Judicial Misconduct, 465 F.3d 532, 546 (2d Cir. Jud. Council 2006), they ‘should take appropriate action upon receipt of reliable information . . . that a lawyer violated applicable rules of professional conduct.’ Code of Conduct for United States Judges Canon 3(B)(6). This attorney’s conduct warranted referral to the relevant disciplinary body. Indeed, the state bar subsequently disciplined the attorney for his conduct in this case. In this context, the judge’s comments did not constitute misconduct.” (In re Complaint of Judicial Misconduct (9th Cir., Oct. 3, 2024) 118 F.4th 1246.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/03/23-90082.pdf
Arbitration Denied Where Plaintiffs Contended They Sought Public Injunctive Relief, but Defendant Argued Plaintiff Sought Private Injunctive Relief.
Plaintiffs’ complaint against defendant alleged it sought public injunctive relief under the Consumer Legal Remedies Act (Civ. Code, § 1750 et seq.; CLRA), the California False Advertising Law (Bus. & Prof. Code, § 17500, et seq.; FAL), and the California Unfair Competition Law (Bus. & Prof. Code, § 17200, et seq.; UCL). The trial court denied defendant’s motion to compel arbitration. On appeal, defendant argued plaintiffs’ claims were subject to arbitration because they sought private injunctive relief. Affirming, the Court of Appeal stated: “The complaint asserts Coinbase is aware of the importance of security to consumers and thus advertises itself to the public as the “‘most trusted” and “most secure” cryptocurrency platform.’ It does so via information on its website and in online, television, and newspaper advertisements. The complaint further alleges ongoing harm toward the public . . . .” (Kramer v. Coinbase, Inc. (Cal. App. 1st Dist., Div. 3, Sep. 12, 2024) 105 Cal.App.5th 741.)
Plaintiff Unsuccessfully Challenged Hospital’s Emergency Services Fee.
Plaintiff received emergency services at defendant hospital. Plaintiff signed a conditions of admission contract (COA) in which he agreed to pay for the services “actually rendered” to him, as listed in the hospital’s chargemaster. A chargemaster is a hospital’s schedule of charges billed to a patient for a given item or service. (See Health & Saf. Code, § 1339.51, subd. (b)(1).) Plaintiff contended the trial court erred when it sustained the demurrer to his breach of contract claim against defendant for its emergency services fee. Affirming, the Court of Appeal stated that the elements of a breach of contract claim are: (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff, and held: “But here, Salami did not allege that he performed his duties under the COA or was excused from doing so, nor did he allege that Los Robles failed to substantially perform its duties under the contract. Without these elements his breach of contract claim fails.” The California Supreme Court issued a grant and hold order but denied the request to depublish the lower court opinion. (Salami v. Los Robles Regional Medical Center (Cal. App. 2nd Dist., Div. 6, Jul. 1, 2024) 103 Cal.App.5th 1023, review granted (Cal., Oct. 2, 2024) 556 P.3d 243.)
Jury Trial Waiver and Forum Selection Clause Unenforceable in Song-Beverly Action.
Plaintiffs purchased a motor home from defendant dealer in California. Eventually, plaintiffs sued defendant under the Song-Beverly Consumers Warranty Act (Civ. Code, § 1790 et seq.) and the Consumer Legal Remedies Act (Civ. Code, § 1750 et seq.; CLRA). Plaintiffs alleged defendant did not perform necessary repairs within a reasonable time or in a reasonable manner and did not return plaintiffs’ money or replace the motor home. Defendant filed a motion under Code of Civil Procedure § 410.30 to stay the action based on a forum selection clause in its warranty designating Indiana as the exclusive forum. Defendant also stated that plaintiffs waived their right to a jury trial and that Indiana law would govern all disputes. The trial court granted the motion to stay. Reversing, the Court of Appeal stated: “We conclude that the trial court erred in placing the burden on the Lathrops to show enforcing the forum selection clause was unreasonable and that Thor did not meet its burden to show litigating in Indiana would not substantially diminish the Lathrops’ rights in violation of public policy.” (Lathrop v. Thor Motor Coach, Inc. (Cal. App. 2nd Dist., Div. 7, Oct. 7, 2024) 105 Cal.App.5th 808.)
Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 and Non-Sexual Harassment Claims.
Plaintiff sued defendants on October 5, 2023, alleging she and others in her presence were subjected to unwelcome, severe, and pervasive sexual harassment, sex discrimination and race discrimination, sexual orientation/gender harassment, and sexual harassment/gender discrimination. In response to the MeToo movement, Congress enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (9 U.S.C., §§ 401-402; EFAA). The EFAA has a provision stating: “. . . no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the . . . sexual harassment dispute.” The Court of Appeal stated the issue before it: “This matter requires that we determine whether the EFAA exempts from arbitration all causes of action in a complaint that asserts both sexual harassment and non-sexual harassment claims, or whether a trial court may still compel arbitration of the non-sexual harassment claims.” Affirming the trial court’s order denying defendant’s motion to compel arbitration, the Court of Appeal held: “Here, at least one of Liu’s claims is subject to the EFAA, and thus the trial court did not err in refusing to compel Liu to arbitrate any of her claims.”(Liu v. Miniso Depot CA, Inc. (Cal. App. 2nd Dist., Div. 1, Oct. 7, 2024) 105 Cal.App.5th 791.)
Landowner Owed No Duty to Remove Tree.
Decedents perished when their vehicles collided, veered off the roadway, and struck a tree located on abutting land owned by defendant railroad. The vehicles burst into flames. In two consolidated lawsuits, relatives of the deceased sued defendant, alleging it was negligent for failing to remove the tree or failing to take other measures to protect the public against the dangerous condition caused by the tree. The trial court denied defendant’s motion for summary judgment after applying factors set forth in Rowland v. Christian (1968) 69 Cal.2d 108. The court found the undisputed material facts did not warrant creating a judicial exception to the ordinary duty of care embodied in Civil Code § 1714. Defendant then filed a petition for a writ of mandate, prohibition, or other appropriate writ. Issuing extraordinary relief, the Court of Appeal stated: “We hold Union Pacific did not have a duty to remove the tree or to otherwise take measures to protect the driving public from any alleged dangerous condition posed by the tree. Therefore, we grant the writ petition.” (Union Pacific Railroad Company v. Superior Court (Cal. App. 5th Dist., Oct. 7, 2024) 105 Cal.App.5th 838.)
Trial Court Erred in Not Considering Probation When Sentencing Veteran.
A military veteran was charged with murder, but the jury returned a verdict of guilty of the lesser crime of manslaughter in the heat of passion. The trial court sentenced the defendant to the upper term of 11 years in prison. The prosecution and the defense both filed sentencing briefs, but neither party’s brief cited the relevant service-related statutes, Penal Code §§ 1170.9 and 1170.91. Reversing the sentence and remanding for resentencing, the Court of Appeal stated: “When imposing a sentence, the trial court referred to Moseley’s PTSD as a factor in mitigation, but the court did not refer to that factor when denying probation. [¶] In sum, it does not appear that the trial court expressly considered sections 1170.9 and 1170.91 at sentencing. Therefore, given this ambiguity, we are reversing Moseley’s sentence and remanding the matter for resentencing. In all other respects, the judgment is affirmed. [¶] We are certifying this opinion for publication to emphasize that trial courts have mandatory statutory obligations when sentencing qualifying veteran defendants, or current members of the United States military. (See §§ 1170.9, 1170.91; see also Cal. Rules of Court, rule 8.1105(c)(6).).” (People v. Moseley (Cal. App. 4th Dist., Div. 3, Oct. 8, 2024) 105 Cal.App.5th 870.)
Montana’s Law Prohibiting No Discrimination Based on Vaccination Status Upheld.
The Montana Legislature enacted a statute that prohibits discrimination based on vaccination status (HB 702). The district court held that two federal laws, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.; ADA) and the Occupational Health and Safety Act (29 U.S.C. §651 et seq.; OSH Act) impliedly preempt the statute. Reversing, the Ninth Circuit stated: “We hold that the ADA, the OSH Act, and the Equal Protection Clause do not facially invalidate HB 702 in health care settings. We reverse the district court’s decision and vacate its injunction.” (Montana Medical Association v. Knudson (9th Cir., Oct. 9, 2024) 119 F.4th 618.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/09/23-35014.pdf
Untimely Responses and Objections to Requests for Admission Deemed in Substantial Compliance.
At first, plaintiff did not respond to requests for admissions, and defendant moved for an order deeming the requests admitted. But before the hearing on the motion, plaintiff served proposed responses with substantive answers as well as general objections. The trial court granted the motion and deemed the requests admitted because the response was not in substantial compliance with Code of Civil Procedure § 2033.220. Later, the court granted a nonsuit because plaintiff did not present evidence at trial due to a discovery order. On appeal, plaintiff contended his proposed, but untimely, responses substantially complied with § 2033.280, Subdivision (c). Reversing, the Court of Appeal stated: “We agree and hold that the presence of waived objections in a proposed response governed by section 2033.280(c) does not necessarily prevent ‘substantial compliance with Section 2033.220.’” (Katayama v. Continental Investment Group (Cal. App. 4th Dist., Div. 3, Oct. 9, 2024) 105 Cal.App.5th 898.)
Alternative Offer Under Code of Civil Procedure § 998.
Defendant served plaintiff with the following alternative offer, leaving it to plaintiff to decide which to accept, citing Code of Civil Procedure § 998;
- A lump sum offer. Defendant offered to “pay $85,000.00 to [p]laintiff to return” the vehicle “with free and clear title.”
- Defendant also offered to “reimburse” plaintiff for several subcategories of restitution available under the Song-Beverly Consumer Warranty Act (Civ. Code § 1790 et seq.).
Plaintiff did not respond, and the offer expired. After trial, the trial court limited the offeree to pre-offer costs. The Court of Appeal said the appeal presented two questions: (1) Is a 998 offer sufficiently certain if it consists of two offers made at the same time to the same party and leaves it to the offeree which offer to accept; and (2) Is a 998 offer sufficiently certain if it promises to pay the offeree for the categories of damages to which the offeree is statutorily entitled (plus some categories to which it is not), agrees to immediately pay any undisputed amounts for those categories, and shunts any disputed amounts to a third-party mechanism for resolution? Affirming, the Court of Appeal stated: “We conclude that the answer to both questions is ‘No.’ Although the offeror in this case made two simultaneous offers (which would render both of them ineffective), only one of those two offers was itself invalid; as a result, the offeror’s 998 offer in the end consisted of a single valid offer such that the trial court’s orders and resulting amended judgment were correct in limiting the offeree to pre-offer costs and attorney fees and awarding the offeror post-offer costs based on the offeree’s failure to obtain a more favorable award at trial than the single, valid offer.” (Gorobets v. Jaguar Land Rover North America, LLC (Cal. App. 2nd Dist., Div. 2, Oct. 10, 2024) 105 Cal.App.5th 913.)
No Agreement to Arbitrate Where Man Suffered from Dementia When He Allegedly Electronically Agreed to Arbitration.
A home improvement and solar panel salesperson visited the home of two senior citizens in their 90s suffering from dementia. By the time he left, a loan agreement package had been completed electronically with an electronic signature. A subsequent dispute led to litigation, and defendant petitioned the court to compel arbitration based on arbitration provisions in the loan agreement. The trial court declined on the ground that defendant had failed to establish the existence of an agreement to arbitrate. Affirming denial of the motion to compel arbitration, the Court of Appeal stated: “Harold was in his 90’s [sic], suffered from dementia, did not use a computer, mobile phone, or e-mail, and was unable to answer simple questions such as his birthdate and telephone number without assistance and significant delay. The evidence strongly suggests Harold lacked the technical facility to open his daughter’s e-mail on what was presumably her mobile phone, create a digital signature, electronically click through and execute the loan agreement in seven locations, and submit those signatures, all in the space of 23 seconds, and it unquestionably demonstrates the existence of a factual dispute as to whether Harold actually executed the electronic signatures on the loan documents.” (West v. Solar Mosaic LLC (Cal. App. 2nd Dist., Div. 8, Oct. 16, 2024) 105 Cal.App.5th 985.)
The Business Judgment Rule.
A part owner of a surgical center sent a letter suggesting the other owners engaged in criminal activity. The other owners gave him 30 days to cure the situation, stating they would oust him without compensation if he did not do so. He did not, and the other owners ousted him without compensation. The part owner filed suit, and the trial court rejected all his claims. The business judgment rule is a presumption that the directors of a corporation make business decisions on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company. The parties did not dispute that this rule applies to limited liability companies. Affirming, the Court of Appeal applied the business judgment rule and noted: “The essence of [plaintiff’s] case is that he put $100,000 into a company with no physical assets, got 30 times that sum in return, sabotaged the company, and got ejected without access to the future earnings of the surgeons who remained in the business. This situation presents no unconscionable inequity.” (Tuli v. Specialty Surgical Center of Thousand Oaks, LLC (Cal. App. 2nd Dist., Div. 8, Oct. 16, 2024) 105 Cal.App.5th 997.)
Ninth Circuit Found District Judge’s Impartiality Might Reasonably Be Questioned.
Petitioner has been on death row for decades in Idaho for a 1981 murder. In January 2024, the Idaho Commission of Pardons and Parole held a hearing to consider whether petitioner should be granted clemency. Petitioner alleged in a lawsuit brought under 42 U.S.C. § 1983 that the prosecutor’s office, including Ada County Prosecutor Jan Bennetts, introduced fabricated or intentionally misleading evidence at his clemency hearing. The mandamus petition sought to recuse U.S. District Judge Amanda K. Brailsford from presiding over the suit, arguing that Judge Brailsford and Bennetts are close friends, and that each had recently acknowledged that friendship publicly. Granting the petition, the Ninth Circuit stated: “Although we are confident that Judge Brailsford would in fact ‘weigh the scales of justice equally between contending parties,’ [citation] it is clear that her ‘impartiality might reasonably be questioned’ under the unique circumstances of this case, 28 U.S.C. § 455(a).” (In re Creech (9th Cir., Oct. 16, 2024) 2024 WL 4502966.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/16/24-4455.pdf
Immigration Officials Played Hard Ball.
Petitioner and her two minor children were on their way to an initial hearing before an immigration judge (IJ) in Seattle, Washington, when they encountered two major car accidents and were late for the hearing. The IJ ordered them removed in absentia. Petitioners promptly moved to reopen, explaining that exceptional circumstances justified their late arrival to court. The IJ and Board of Immigration Appeals denied the motion on the ground that ordinary traffic alone is not an exceptional circumstance. Granting the petition for review, the Ninth Circuit stated: “We hold that the facts of this case amount to exceptional circumstances, which warrant reopening.” (Montejo-Gonzalez v. Garland (9th Cir., Oct. 17, 2024) 119 F.4th 651.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/17/21-304.pdf
Intestate Heirs Had Standing to Contest Trust Instrument.
Two months before her death, the decedent executed a trust instrument naming defendant as the trustee and sole beneficiary of the trust. The trial court held that defendant exerted undue influence over the decedent to execute the trust instrument. Concluding plaintiffs who are the intestate heirs of the decedent had standing to contest the trust, the Court of Appeal stated: “[Probate Code] Section 17200 contains no language purporting to limit standing only to trustees and beneficiaries of a trust or otherwise indicating the Legislature’s intent to exclude others from contesting a trust in the probate court. Rather, the statute simply provides that trustees and trust beneficiaries ‘may’ petition the court under this chapter ‘[e]xcept’ as provided in section 15800—i.e., during the time the trust remains revocable, when joint action of settlor and beneficiaries is required, or ‘to the extent that the trust instrument otherwise provides.’ (§ 17200, subd. (a), citing § 15800.) But the mere use of the words ‘trustee or beneficiary’ is hardly an indication of a legislative intent to circumscribe the probate court’s power to confer standing to contest a trust on persons other than trustees and trust beneficiaries.” (Hamlin v. Jendayi (Cal. App. 1st Dist., Div. 3, Oct. 17, 2024) 2024 WL 4522347.)
Two Remedies in One Statute; Two Statutes of Limitations.
Plaintiff sued under the Automobile Sales Finance Act (Civ. Code, § 2981 et seq.; ASFA) alleging a failure to appropriately disclose in the written contract the portion of his down payment made in cash, and the portion made in trade-in value of another vehicle. Failure to make these written disclosures as required by law allows the plaintiff a choice of remedies: either continuing the contract in force, or recovering the full amount paid to the dealership and/or its assignee and returning the vehicle. Plaintiff chose the latter remedy. The question posed by this appeal was whether this cause of action fell within the one-year statute of limitations imposed on actions for statutory penalties and forfeitures by Code of Civil Procedure § 340, or the four-year statute of limitations for written contracts found in Code of Civil Procedure § 337. The Court of Appeal held: “We conclude the rescission/restitution remedy imposed by the ASFA is a penalty, and, thus, Code of Civil Procedure section 340 provides the appropriate limitations period here.” (Pompey v. Bank of Stockton (Cal. App. 5th Dist., Oct. 21, 2024) 2024 WL 4532760.)
Trial Court Abused Its Discretion in Abstaining from Adjudicating Action.
The People sued Kaiser Foundation Health Plan alleging violations of the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) and false advertising law (Bus. & Prof. Code, § 17500 et seq.) based on, among other things, inaccuracies in Kaiser’s health plan provider directories. The People alleged that Kaiser failed to maintain and update accurate provider directories for its health plans, as required by Health and Safety Code § 1367.27. The trial court granted Kaiser’s motion for summary judgment after exercising its discretion to abstain from adjudicating the action. Reversing, the Court of Appeal identified the reasons for the doctrine of judicial abstention and concluded the trial court abused its discretion by applying the doctrine here. (People ex rel. Elliott v. Kaiser Foundation Health Plan, Inc. (Cal. App. 4th Dist., Div. 1, Oct. 22, 2024) 2024 WL 4539322.)
Sure Sounds Confusing.
Plaintiff Lerner & Rowe has spent over $100,000,000 promoting its brand as a personal injury law firm. In 2021, defendant purchased the term “Lerner & Rowe” as a Google Ads keyword. As a result, defendant, which does business as The Accident Law Group, has its ads appear whenever anyone searches for Lerner & Rowe. Plaintiff sued for trademark infringement as well as other causes of action. The district court entered summary judgment for defendant. Affirming, the Ninth Circuit stated: “The district court was correct to conclude that this is one of the rare trademark infringement cases susceptible to summary judgment. The generally sophisticated nature of online shoppers, the evidence demonstrating that there is not an appreciable number of consumers who would find [The Accident Law Group’s] use of the mark confusing, and the clarity of Google’s search results pages, convince us that [The Accident Law Group’s] use of the ‘Lerner & Rowe’ mark is not likely to cause consumer confusion.” (Lerner & Rowe PC v. Brown Engstrand & Shely LLC (9th Cir., Oct. 22, 2024) 119 F.4th 711.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/22/23-16060.pdf
Problems with Federal Government’s Metering System for Immigrants.
In 2016, Customs and Border Protection adopted a policy of “metering” asylum seekers at ports of entry along the border between Mexico and the United States. Under that policy, whenever border officials deemed a port of entry to be at capacity, they turned away all people lacking valid travel documents. Many of those people intended to seek asylum in the United States but were not allowed to even apply. Plaintiffs, an immigrant rights group, challenged that metering policy on behalf of classes of asylum seekers. The district court ultimately declared the metering policy to be unlawful. As part of the remedy, the lower court enjoined the government from applying the Asylum Transit Rule (“Rule”) that required persons traveling through a third country to apply for asylum there before seeking asylum in the United States to noncitizens turned away under the metering policy before the Rule’s adoption. Largely affirming, the Ninth Circuit stated: “For the foregoing reasons, we affirm the judgment in favor of Plaintiffs on the [Administrative Procedure Act] § 706(1) claim, vacate the judgment in favor of Plaintiffs on the constitutional due process claim, affirm the declaratory relief, and affirm the injunctive relief . . . .” (Al Otro Lado v. Executive Office for Immigration Review (9th Cir., Oct. 23, 2024) 2024 WL 4551637.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/23/22-55988.pdf
Trial Court Erred in Excluding Plaintiff’s Expert Testimony in Motion in Limine.
Plaintiff fell from a train and broke his leg while working as a brakeman for Union Pacific Railroad Company. Plaintiff sued Union Pacific for negligence under the Federal Employers’ Liability Act (45 U.S.C. § 51 et seq.; FELA). A jury returned a special verdict for Union Pacific, finding the company was not negligent. On appeal, plaintiff contended the trial court erred in excluding his expert witness’s testimony that the delay between releasing the brakes and engaging the throttle caused plaintiff to fall. Reversing and ordering a new trial, the Court of Appeal stated: “We conclude that the trial court erred by excluding [plaintiff’s expert]’s testimony. [Plaintiff’s expert] had experience relevant to the subject about which he was to testify, and his testimony would have been helpful to the jury because it would have assisted the jury in interpreting the video of [plaintiff]’s fall and understanding how the locomotive engineer’s actions may have caused a surge at the rear of the train. The exclusion was prejudicial because it left [plaintiff] without a witness to testify to what Union Pacific’s locomotive engineer did and why it was dangerous.” (Richard v. Union Pacific Railroad Company (Cal. App. 2nd Dist., Div. 3, Oct. 24, 2024) 2024 WL 4562561.)
When a Judgment for Attorney Fees Is Entered Under the Family Code, the Judgment Is Enforceable Until Satisfied in Full.
A judgment debtor appealed from an order denying his motion to quash a writ of execution for attorney fees filed by his former spouse. The debtor argued the writ should have been quashed because it was sought more than ten years after the entry of judgment in violation of Code of Civil Procedure § 683.020 and was subject to the renewal requirements of § 683.130. He asserted that, while judgments entered under the Family Code are generally exempt from § 683.020’s 10-year limitation period and § 683.130’s renewal requirements under Family Code § 291, that exemption does not apply for judgments to satisfy an order for attorney fees. Finding against the judgment debtor, the Court of Appeal stated: “We disagree with [the judgment debtor]. When a judgment for attorney fees is entered under the Family Code, the judgment is enforceable until satisfied in full. Failure to renew the judgment has no effect on its enforceability per Family Code section 291, subdivision (b). Accordingly, we affirm.” (In re Marriage of McIntyre & Shayan (Cal. App. 2nd Dist., Div. 8, Oct. 25, 2024) 2024 WL 4585636.)
An IRA Is a Nonprobate Asset.
Under California law, a person whose spouse dies without providing for them in “testamentary instruments” pre-dating their marriage is, as a general matter, statutorily entitled to a share of the decedent’s “estate” as an “omitted spouse.” (Prob. Code, § 21600 et seq.) This appeal presents the following question: Does a decedent’s “estate,” for the purpose of calculating the “omitted spouse’s share,” encompass the proceeds of an individual retirement account (IRA) when the IRA’s beneficiaries are two “separate trusts” that were created by the decedent’s testamentary trust? The Court of Appeal held: “We conclude that the answer is ‘no’ because an IRA is a nonprobate asset ([Prob. Code,] §§ 5000, 5011) and because the IRA proceeds never pass through the decedent’s testamentary trust to the beneficiaries’ separate trusts. [] We accordingly affirm the probate court’s orders denying the surviving spouse’s petitions to include the IRA proceeds in calculating her omitted spouse’s share.” (Reich v. Reich (Cal. App. 2nd Dist., Div. 2, Oct. 24, 2024) 2024 WL 4562448.)
Judgment Reversed After Trial Court Entered Judgment Without Issuing Statement of Decision.
The trial court entered judgment for plaintiff in a business dispute. Defendants timely requested a statement of decision, but the trial court entered judgment without ever issuing a statement of decision. The Court of Appeal reversed, stating: “The judgment is reversed and the matter is remanded with directions to the trial court to prepare the requested statement of decision and for other proceedings consistent with this opinion.” (Alafi v. Cohen (Cal. App. 6th Dist., 2024 WL 4586189.)
Delegation Clause in Arbitration Agreement Held Unconscionable; No Preemption by Federal Arbitration Act.
Plaintiffs bought tickets to live entertainment promoted by Live Nation and sold through Ticketmaster’s website. Their online ticket purchase agreement on the Ticketmaster website included an agreement to comply with Ticketmaster’s Terms of Use. Ticketmaster’s Terms provide that any claim arising out of the ticket purchase, as well as any prior ticket purchase, will be decided by an arbitrator employed by a newly created entity, New Era ADR. The delegation clause in the arbitration agreement states: “Delegation; Interpretation. The arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to the extent permitted by law to resolve all disputes arising out of or relating to the interpretation, applicability, enforceability, or formation of this Agreement, including but not limited to, any claim that all or any part of this Agreement is void or voidable . . . .” The district court denied defendants’ motion to compel arbitration pursuant to the arbitration agreement. It held that the clause delegating to the arbitrator the authority to determine the validity of the arbitration agreement—the “delegation clause”—was unconscionable under California law, both procedurally and substantively. Affirming, the Ninth Circuit stated: “We hold that the delegation clause of the arbitration agreement, and the arbitration agreement as a whole, are unconscionable and unenforceable under California law. We hold further that the application of California’s unconscionability law to the facts of this case is not preempted by the Federal Arbitration Act (FAA). Finally, we hold, as an alternate and independent ground, that the FAA does not preempt California’s prohibition of class action waivers contained in contracts of adhesion in large-scale small-stakes consumer cases.” (Heckman v. Live Nation Entertainment, Inc. (9th Cir., Oct. 28, 2024) 2024 WL 4586971.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/28/23-55770.pdf
Students with Disabilities and Their Right to a Free Education.
As part of its efforts to implement the Individuals with Disabilities Education Act (20 U.S.C. § 1400 et seq.; IDEA), the State of California contracts with certain “nonpublic schools” to provide students with disabilities a “free appropriate public education.” (20 U.S.C. § 1412(a)(1); FAPE; Cal. Educ. Code, § 56365, subd. (a).) By statute, California requires that these “nonpublic schools” (NPSs) be “nonsectarian.” Two Orthodox Jewish schools and three Orthodox Jewish families alleged that California’s nonsectarian NPS requirement violates their rights under the free exercise and equal protection clauses of the U.S. Constitution. In the district court, plaintiffs sought a preliminary injunction prohibiting the state and county from enforcing the nonsectarian requirement. The court denied the request and dismissed the case. The Ninth Circuit reversed, stating: “We conclude that the statute on its face burdens the free exercise rights of parents because it prohibits parents from advocating for a sectarian placement. Because the nonsectarian requirement is not neutral to religion, strict scrutiny applies. We conclude that the State Appellee has failed to demonstrate that California’s nonsectarian requirement satisfies the applicable strict scrutiny standard of review.” (Loffman v. California Department of Education (9th Cir., Oct. 28, 2024) 2024 WL 4586970.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/28/23-55714.pdf
Disqualification of Judges for Bias.
A trial judge entered judgment for plaintiffs suing for wage and hour violations in the amount of $43.5 million. Defendants sought to disqualify the judge for bias. The timeliness requirement of Code of Civil Procedure § 170.3, subdivision (c)(1) provides that a party who seeks to disqualify a trial court judge by filing a verified statement of disqualification must do so “at the earliest practicable opportunity after discovery of the facts constituting the ground for disqualification.” The nonwaiver provision of § 170.3, subdivision (b)(2) provides that, notwithstanding a party’s general ability to waive a disqualification, “[t]here shall be no waiver of disqualification if the basis therefor” falls into one of two categories, one of which is that “[t]he judge has a personal bias or prejudice concerning a party.” After the Court of Appeal held that the nonwaiver provision precludes application of the timeliness requirement when a party alleges that a judge is disqualified due to bias or prejudice concerning a party, the California Supreme Court granted review. The Supreme Court held: “We disagree with the Court of Appeal’s interpretation of the statute. . . . When a party seeks disqualification, the statute’s timeliness requirement contemplates that the litigant may forfeit the right to seek disqualification by failing to file a statement of disqualification ‘at the earliest practicable opportunity after discovery of the facts constituting the ground for disqualification.’ (§ 170.3(c)(1).) The statute’s nonwaiver provision has no effect on the separate issue of forfeiture in this context.” (North American Title Co. v. Superior Court (Cal., Oct. 28, 2024) 2024 WL 4599235.)
Be Careful What You Ask For.
At first, a party moved to enforce a settlement, and the court did just that. Later, the same party moved to vacate the settlement, contending it was unenforceable. The problem for that party was that, in enforcing the settlement, the trial court did it in a way the party didn’t like. Affirming enforcement of the settlement, the Court of Appeal stated: “Their present position that the agreement is unenforceable is totally inconsistent with their previous position in their motion to enforce the settlement.” (Vaghashia v. Vaghashia (Cal. App. 2nd Dist., Div. 8, Oct. 28, 2024) 2024 WL 4599698.)
“We regret to inform that cannabis is illegal in California because federal law says so.” California Court of Appeal Second District, Division Six.
A private easement over a neighbor’s land was the subject of a conditional use permit granted by a county for the cultivation of cannabis. The servient owner of the land objected to the use of his land to transport cannabis. The servient owner petitioned the trial court for a writ of administrative mandate, which the court denied. The Court of Appeal held Business and Professions Code § 26051.5, subdivision (a)(2) requires permission for commercial cannabis activities from all landowners where land is so used, including the owners of servient tenants over which cannabis is transported. Reversing the lower court, the appellate court stated that the landowner “cannot be forced to allow his property to be used to transport cannabis, because such use exceeds the scope of uses allowed under the easement.” (JCCrandall, LLC v. County of Santa Barbara (Cal. App. 2nd Dist., Div. 6, Oct. 29, 2024) 2024 WL 4599704.)
Asbestos/Mesothelioma Verdict Reversed; New Trial Granted.
The owner of an automotive repair shop, which opened in 1982, was diagnosed with mesothelioma, a rare cancer caused by exposure to asbestos. The case went to trial against one manufacturer of brake linings which contained asbestos after the other defendants were dismissed. One of defendant’s defenses was that plaintiff was a sophisticated user, but the trial court granted a directed verdict on that defense. The jury awarded a multimillion-dollar verdict for plaintiff, apportioning fault of 60 percent to defendant, 25 percent to other brake manufacturers, and 15 percent to plaintiff. The Court of Appeal reversed, noting that plaintiff’s own testimony supported his being a sophisticated user, “with his point-blank admission that the reason he never looked at the manuals was because he felt he was ‘sufficiently proficient and knew how to professionally and safely perform brake jobs that [he] didn’t need to consult them.’” The appeals court held: “We conclude that the trial court erred in directing the verdict and also erred in several rulings that bore on the allocation issue. We thus reverse and remand for a new trial.” (Watts v. Pneumo Abex, LLC (Cal. App. 1st Dist., Div. 2, Oct. 29, 2024) 2024 WL 4611827.)
Easement Case Reversed Due to Inconsistent Findings.
A dispute over two adjacent parcels of property, each containing a multi-unit apartment complex with on-site parking for their residents gave rise to this action. The parties sought to determine their rights regarding a purported easement to use a disputed area on one parcel for additional space for tenant parking and trash dumpsters. After a bench trial, the trial court entered a judgment for plaintiffs, finding they had established easement rights for the additional parking and dumpster space in the disputed area on the adjacent parcel, which was owned by defendant. The trial court found plaintiffs established their easement rights under multiple theories, including by oral grant, by prescription, and by implication. Although the trial court granted the parking and trash dumpster easement in favor of plaintiffs, it ordered that the easement would expire upon a bona fide sale of either property by plaintiffs or defendant. Concluding the trial court reached inconsistent findings, the Court of Appeal reversed and remanded for further proceedings. (Batta v. Hunt (Cal. App. 2nd Dist., Div. 8, Oct. 29, 2024) 2024 WL 4607596.)
Transgender Woman’s Request to Have Court Records Sealed.
M.T. was assigned male at birth, but has presented as female since she was a minor. When she was 19, she petitioned to legally change her name and gender to align with her gender identity. The petition was granted in 2018. In 2023, she requested the trial court seal the entire record of her name change and gender marker correction, asserting she was harassed after she was “outed” on social media, identifying her as transgender and disclosing her workplace, residential address, phone number, and former name. The court denied M.T.’s request to seal the entire record, but sealed the application and its supporting documentation, which included a physician’s letter. M.T. challenged the denial of her request to seal the entire record of her name change and gender marker correction. California Rules of Court, rule 2.550, states a court may order the record sealed upon express findings of fact, including that “there exists an overriding interest that overcomes the right of public access to the record.” Reversing, the Court of Appeal held that M.T. made a sufficient showing her records should be sealed. (In re M.T. (Cal. App. 5th Dist., Oct. 30, 2024) 2024 WL 4614003.)
No Refund for Overpayment of Child Support.
A married couple divorced in 1992. As part of the divorce judgment, the father was to pay the mother child support. In 2001, the child support obligation legally terminated, but a wage and earnings assignment order remained in place and continued to garnish the father’s wages to pay the child support obligation to the mother until 2008. Thirteen years later, in 2021, the father filed a request for order to determine overpayment of child support and receive a refund thereof. The trial court found the father did not take timely action to seek reimbursement of the overpayment of child support and that the reasons given for the delay in seeking reimbursement were insufficient to overcome the prejudice to the mother. The Court of Appeal affirmed, finding it was the father’s “responsibility, as obligor, pursuant to [Family Code] section 5240, subdivision (a)(2), to file an RFO requesting that the court terminate the pending wage and earnings assignment order.” (In re Marriage of Saraye (Cal. App. 2nd Dist., Div. 8, Oct. 30, 2024) 2024 WL 4614589.)
Clarification of “New Motor Vehicle” Under the Song-Beverly Act.
Under the Song-Beverly Consumer Warranty Act (Civ. Code, § 1791 et seq.), new car buyers have a refund-or-replace remedy: It requires manufacturers to “promptly replace” a defective new motor vehicle or “promptly make restitution” to the buyer when the manufacturer is unable to service or repair a new motor vehicle. Plaintiffs bought a two-year-old car with over 55,000 miles on it. The car had an unexpired manufacturer’s new car warranty. The car repeatedly experienced engine problems despite numerous repair attempts by defendant. Plaintiffs sued defendant to enforce the refund-or-replace provision (Civ. Code, § 1793.2, subd. (d)(2)), claiming that their car was a “new motor vehicle” because it was a “motor vehicle sold with a manufacturer’s new car warranty” (Civ. Code, § 1793.22, subd. (e)(2)). The trial court and Court of Appeal agreed with defendant that plaintiffs’ car was not a “new motor vehicle.” The California Supreme Court held likewise, stating: “We conclude that a motor vehicle purchased with an unexpired manufacturer’s new car warranty does not qualify as a ‘motor vehicle sold with a manufacturer’s new car warranty’ under section 1793.22, subdivision (e)(2)’s definition of ‘new motor vehicle’ unless the new car warranty was issued with the sale.” (Rodriguez v. FCA US, LLC (Cal., Oct. 31, 2024) 2024 WL 4631069.)
The Litigation Privilege Bars Cross-Complaint in Wage/Hour Action.
Plaintiff was hired as an executive assistant to a vice president with defendant company. She alleged the vice president had her repeatedly perform “demeaning” personal errands and tasks for him, such as carrying his bags, laundering his gym clothes, shining his shoes, cutting his food, and refilling his water glass. For this extra work, she was not paid overtime compensation. Plaintiff’s suit against defendant asserted eight causes of action for discrimination, retaliation, harassment, failure to prevent harassment and retaliation, and wage-and-hour violations arising from alleged workplace misconduct by the vice president during the four years when plaintiff worked as his executive assistant. Two years into plaintiff’s litigation, the vice president filed a cross-complaint against plaintiff, alleging statements in a letter she submitted to defendant’s human resources director three months before she filed suit constituted libel, slander, intentional infliction of emotional distress, intentional interference with contractual relations, and negligence. The trial court granted plaintiff/cross-defendant’s anti-SLAPP motion. Affirming, the Court of Appeal stated: “Applying de novo review, we likewise reject [the vice president’s] attempt to invoke an exception to the anti-SLAPP statute for activity that is illegal as a matter of law and conclude the litigation privilege bars [the vice president’s] claims, preventing him from meeting his burden under the second step of the anti-SLAPP analysis to show his claims have minimal merit.” (Osborne v. Pleasanton Automotive Company, LP (Cal. App. 1st Dist., Div. 2, Oct. 31, 2024) 2024 WL 4632812.)
Fired for Refusing to Get Vaccinated.
Because plaintiff refused to comply with the City of Los Angeles’s COVID-19 vaccination mandate and sign a “Notice of Mandatory COVID-19 Vaccination Policy Requirements” enforcing the mandate, the Chief of Police sought to terminate her employment as a Los Angeles Police Department (LAPD) officer. The LAPD Board of Rights reviewed the chief’s proposed discipline, found plaintiff guilty of failing to comply with conditions of employment, and upheld the decision to discharge plaintiff. Plaintiff filed a petition for writ of mandate in the trial court, arguing the disciplinary action was procedurally and legally invalid, and seeking reinstatement and back pay. The trial court found the termination was justified, but the city violated plaintiff’s due process rights by giving her insufficient time to respond to the allegations. The trial court awarded her back pay. Affirming, the Court of Appeal stated: “[Plaintiff] did not apply for a religious or medical exemption and she expressly told her commanding officer in an email that she would not be vaccinated for personal reasons. This refusal alone clearly violated the ordinance’s vaccination requirement and the Notice’s requirements enforcing the ordinance.” (Bedard v. City of Los Angeles (Cal. App. 2nd Dist., Div. 3, Oct. 31, 2024) 2024 WL 4634930.)