California Case Summaries

New California Civil Cases

by Monty A. McIntyre, Esq.

These recent cases summarized by Monty A. McIntyre are from his publication California Case Summaries™. Monty prepares short summaries (one paragraph), organized by legal topic, of every new published California civil and family law case that California lawyers can subscribe to on either a monthly, quarterly or annual basis. Monty also offers specialized practice area annual summaries in the areas of Employment, Family Law, Real Property and Torts. For more information go to cacasesummaries.com. A California civil trial lawyer since 1980, a member of ABOTA since 1995, a past president of the SDCBA and San Diego ABOTA, and also an expert Zoom user, Monty serves as a mediator, arbitrator and referee with ADR Services, Inc. handling cases throughout California in the areas of business, elder abuse, employment/wage & hour, insurance bad faith, legal malpractice, medical malpractice, personal injury, real property and wrongful death. Web: www.adrservices.com/neutrals/mcintyre-monty/ To schedule a matter, contact Monty’s case manager Haward Cho, (619) 233-1323 or haward@adrservices.com.

CALIFORNIA SUPREME COURT

Insurance

McHugh v. Protective Life Ins. Co. (2021) _ Cal.5th _ , 2021 WL 3853061: The California Supreme Court reversed the Court of Appeal, which had affirmed a judgment for defendant, following a jury trial, concluding that Insurance Code sections 10113.71 and 10113.72 did not apply retroactively to plaintiff’s term life insurance policy, which had been terminated by defendant to failure to pay the premium. The California Supreme Court held that sections 10113.71 and 10113.72 apply to all life insurance policies in force as of January 1, 2013—regardless of when those policies had originally been issued. The case was remanded for proceedings consistent with the opinion. (August 30, 2021.)

Torts

Gonzalez v. Mathis (2021) _ Cal.5th _ , 2021 WL 3671594: The California Supreme Court reversed the decision of the Court of Appeal. Declining to create a third exception to the rule in Privette v. Superior Court (1993) 5 Cal.4th 689, the California Supreme Court ruled that unless a landowner retains control over any part of the contractor’s work and negligently exercises that retained control in a manner that affirmatively contributes to the injury (Hooker v. Department of Transportation (2002) 27 Cal.4th 198, 202), a landowner will not be liable to an independent contractor or its workers for an injury resulting from a known hazard on the premises. (August 19, 2021.)

Sandoval v. Qualcomm Incorporated (2021) _ Cal.5th _ , 2021 WL 4097782: The California Supreme Court reversed the decision of the Court of Appeal that found that defendant Qualcomm Incorporated (Qualcomm), the hirer of an independent contractor, was liable for the third degree burns that plaintiff (an employee of the independent contractor) suffered to over one-third of the surface area of his body after he triggered an arc flash from a circuit he did not realize was “live” with flowing electricity. The California Supreme Court ruled that defendant Qualcomm owed no tort duty to plaintiff, the parts specialist working for Qualcomm’s contractor, at the time of plaintiff’s injuries. Although Qualcomm performed the partial power-down process that preceded the contractor’s work and resulted in the presence of the live electrical circuit, the Supreme Court concluded that under the facts of this case Qualcomm neither failed to sufficiently disclose the hazard under Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659, 664, nor affirmatively contributed to the injury under Hooker v. Department of Transportation (2002) 27 Cal.4th 198, 202. It also concluded that the

pattern jury instruction used in the case—CACI No. 1009B—did not adequately capture the elements of a Hooker claim. (September 9, 2021.)

CALIFORNIA COURTS OF APPEAL

Appeals

Reddish v. Westamerica Bank (2021) _ Cal.App.5th _ , 2021 WL 3827308: The Court of Appeal dismissed defendant’s appeal of the trial court’s order requiring that defendant and the plaintiffs should share equally the costs of taking thirty plaintiff depositions in a certified class action alleging Labor Code and wage and hour violations. Defendant appealed the trial court’s order claiming it was appealable under the collateral order doctrine. The Court of Appeal rejected defendant’s argument, ruling that because the outcome remained uncertain, the matter had not been finally determined for purposes of the collateral order doctrine. (C.A. 1st, August 27, 2021.)

Arbitration

Banc of Cal., NA v. Superior Court (2021) _ Cal.App.5th _ , 2021 WL 4398583: The Court of Appeal granted defendant’s petition for writ of mandate compelling the trial court to vacate its order granting defendant’s petition to compel arbitration in plaintiff’s action for breach of a loan to facilitate defendant’s purchase of a commercial aircraft. The Court of Appeal held the trial court erred in granting the petition to compel arbitration based upon the Supreme Court’s decision in Henry Schein, Inc. v. Archer and White Sales, Inc. (2019) ___ U.S. ___ [139 S.Ct. 524, 529] (Schein), which held that where an arbitration clause contains a delegation provision, the arbitrator should decide the threshold issue of arbitrability even if the argued basis for arbitration is “wholly groundless.” In Schein, the court considered who should decide whether the parties’ dispute arising from a specific contract with an arbitration clause was arbitrable. In this case, however, the issue in defendant’s petition to compel arbitration was whether the parties agreed to arbitrate their dispute over the loan documents which did not have arbitration clauses, and this was a question for the trial court to decide. (C.A. 2nd, September 27, 2021.) Herrera v. Doctors Medical Center of Modesto (2021) _ Cal.App.5th _ , 2021 WL 3417591: The Court of Appeal affirmed the trial court’s order denying a petition to compel arbitration in an action by former employees to recover civil penalties under the Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et al.). Pursuant to Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, PAGA representative claims for civil penalties are not subject to arbitration under a predispute arbitration agreement. (Esparza v. KS Industries, L.P. (2017) 13 Cal.App.5th 1228, 1234.) The PAGA claims alleged in the former employees’ complaint were owned by the state and were pursued by the former employees as the state’s agent or proxy. (ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 185.) The arbitration agreements in question were not enforceable as to the PAGA claims because the state was not a party to, and did not ratify, any of those agreements. Also, after the former employees became representatives of the state, they did not agree to arbitrate the PAGA claims. (C.A. 5th, August 5, 2021.)

Attorney Fees

Missakian v. Amusement Industry, Inc. (2021) _ Cal. App.5th _ , 2021 WL 4451940: The Court of Appeal reversed the judgment for plaintiff, following a jury trial, on his breach of oral contract and promissory fraud claims against defendant Amusement Industry, Inc. (Amusement). The jury found for plaintiff on both claims, but it found for Amusement’s founder, Allen Alevy, on the promissory fraud claim, and the trial court later granted a judgment notwithstanding the verdict (JNOV) for plaintiff against Amusement. The jury awarded plaintiff $2.525 million on the breach of oral contract claim and awarded plaintiff $750,000 in compensatory damages and $1,750,000 in punitive damages on the promissory fraud claim. Plaintiff had worked as an inhouse attorney for Amusement. Alevy recruited plaintiff to be the in-house attorney for Amusement. Alevy and plaintiff orally agreed that plaintiff would receive a salary of $325,000, and once ongoing litigation in New York (the Stern Litigation) was resolved plaintiff would receive a bonus of $6,250 for each month he had worked on that litigation (Monthly Bonus), and an additional bonus of ten percent of the recovery in the Stern Litigation, excluding ordinary litigation costs (Stern Litigation Bonus). This agreement was never reduced to writing and signed by both parties. The Court of Appeal reversed the judgment for plaintiff on the breach of oral contract claim because that agreement was a contingency fee

agreement subject to section Business and Professions Code section 6147 and was therefore unenforceable as a matter of law. The Court of Appeal found the jury’s special verdict to be inconsistent because it found Alevy did not make a false promise, but that Amusement (acting only through Alevy) did. Because the trial court could not choose between the jury’s inconsistent responses, the court should have ordered a new trial as to all parties rather than granting a JNOV.(C.A. 2nd., September 29, 2021.)

Attorneys

Amjadi v. Brown (2021) _ Cal.App.5th _ , 2021 WL 3855831: The Court of Appeal reversed the trial court’s judgment of dismissal entered after plaintiff’s attorney agreed to a settlement for $150,000 with defendant over plaintiff’s objection, and the trial court’s later order denying plaintiff’s motion to vacate the judgment in her action for personal injuries arising from a car accident. The settlement was entered by plaintiff’s attorney pursuant to a provision in the attorney’s contingent fee agreement, which allegedly granted the attorney the right to accept settlement offers on the client’s behalf in the attorney’s “sole discretion,” so long as the attorney believed in good faith that the settlement offer was reasonable and in the client’s best interest. The Court of Appeal concluded that such a provision violates the Rules of Professional Conduct and is void to the extent it purports to grant an attorney the right to accept a settlement over the client’s objection. The Court of Appeal held the settlement was void and reversed the judgment. It also referred plaintiff’s former attorneys to the State Bar for potential discipline, as required by law and by Canon 3D(2) of the Code of Judicial Ethics. (C.A. 4th, August 30, 2021.)

Civil Code

Dept. of Fair Employment and Housing v. M&N Financing Corp. (2021) _ Cal.App.5th _ , 2021 WL 4398564: The Court of Appeal affirmed the trial court’s order granting plaintiff’s motion for summary judgment on the first and second causes of action alleging violations of the Unruh Civil Rights Act (Civil Code, section 51) and Civil Code section 51.5, and assessing over $6 million in statutory damages pursuant to Civil Code section 52(a). The Court of Appeal reversed the trial court’s order granting defendant’s motion for judgment on the pleadings as to the fifth cause of action alleging that the defendant M&N Financing Corporation (M&N) “knowingly compelled and coerced its employees to engage in practices that violated” FEHA and Civil Code sections 51 and 51.5, in violation of Government Code section 12940(i). Plaintiff sued defendants M&N and Mahmood Nasiry for operating a business that purchased retail installment sales contracts (contracts) from used car dealerships that used a formula that considered the gender of the car purchaser. Defendants would pay more for a contract with a male purchaser than for a contract with a female purchaser or female coborrower. The Court of Appeal rejected all of defendant’s arguments (no standing, lack of injury, etc.) against the $6 million judgment. The trial court had granted the motion for judgment on the pleadings on the basis that section 12940(i) did not apply because employee Khayyam Etemadi and other employees of M&N were not “aggrieved” parties under the statute. The Court of Appeal disagreed, holding that employees who are coerced by their employer to violate Civil Code sections 51 and 51.5 are “aggrieved” within the meaning of section 12965(a) and have standing to sue their employer pursuant to section 12940(i). (C.A. 2nd, September 27, 2021.)

Employment

Becerra v. The McClatchy Co. (2021) _ Cal.App.5th _ , 2021 WL 4472625: The Court of Appeal reversed the judgment for defendants, following a bench trial, in a class action by newspaper home delivery carriers for The Fresno Bee newspaper who alleged that defendants violated the unfair competition law (UCL; Business & Professions Code, 17200 et seq.) by failing to pay the carriers’ mileage expenses as required by Labor Code section 2802. The primary issue at trial was whether the carriers were employees or independent contractors and the trial court concluded they were independent contractors. The Court of Appeal reversed, ruling that the issue of whether the carriers are employees or independent contractors had to be determined under the S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, (Borello) test. The trial court erred in deferring to the Employment Development Department regulations that the Court of Appeal found were inapplicable, and the trial court also failed to properly analyze the factors required by Borello. (C.A. 5th, September 30, 2021.) n

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