2021 CAJPA Caselaw Update

2021 CAJPA

Caselaw Update

Page 1

TABLE OF CONTENTS JPA ADMINISTRATION AND COVERAGE CASES................................3 Summaries by Doug Alliston of Murphy, Campbell, Alliston and Quinn WORKERS’ COMPENSATION CASES.....................................................6 Summaries by Randal C. McClendon of Cuneo, Black, Ward & Missler CIVIL RIGHTS CASES............................................................................10 Summaries by Noah G. Blechman and team of McNamara, Ney, Beatty, Borges & Ambacher, LLP CLAIM PRESENTATION, DANGEROUS CONDITION, AND DESIGN IMMUNITY.....................................................................16 Summaries by Kimberly Y. Chin of Allen Glaessner Hazelwood & Werth, LLP EMPLOYMENT CASES AND A SCHOOLS CIVIL RIGHTS CASE.......19 Summaries by Neal Meyers of Meyers Fozi & Dwork, LLP

Page 2

JPA ADMINISTRATION AND COVERAGE CASES

Summaries provided by Doug Alliston of Murphy, Campbell, Alliston and Quinn McCarthy Bldg. Cos. v. Mt. Hawley Ins. Co. (C.D.Cal. 2021) 2021 U.S.Dist.LEXIS 35613 Summary: An agreement requiring that an additional insured endorsement be provided during the life of the agreement means the additional insured may be unprotected for completed operations.

Discussion: Huntington Beach Union High School District contracted with McCarthy Building Companies, Inc. for management of various construction projects including the Huntington Beach High School Modernization project. The District entered into an agreement with Day Construction Company to complete the high school project. The agreement required Day during the life of the agreement to maintain a Commercial General Liability Insurance that provided contractual liability coverage, applied to completed operations, and named McCarthy as an additional insured. Day complied with this requirement while the project was ongoing.

Five years after completion of the project, the District was sued by a woman who had tripped on a doorstop, and the District cross-complained against McCarthy and Day. Mt. Hawley, which insured Day at the time of the woman’s injury, initially agreed to defend McCarthy under its blanket additional insured endorsement, which made an additional insured of any party that the named insured (Day) was contractually required to have named as an additional insured. Mt. Hawley subsequently denied coverage on the basis that at the time of injury, the relevant contract was no longer in effect and there was no continuing obligation of Day to have McCarthy named as an additional insured.

McCarthy sued Mt. Hawley and Mt. Hawley moved for summary judgment. The Court found the plain meaning of the phrase “life of this Agreement” to be until performance by both parties is complete. Accordingly, it concluded that Day was under no obligation to provide additional insured status at the time of the woman’s injury and that Mt. Hawley’s blanket additional insured endorsement did not apply.

Truck Ins. Exch. v. AMCO Ins. Co. (2020) 56 Cal. App. 5th 619 Summary: Landowner who is additional insured for injury arising out of tenant’s use of premises is covered without regard to tenant’s fault.

Discussion: A car crashed into a restaurant injuring restaurant patrons. The patrons sued the restaurant operator and the building’s owner. There had been a prior similar accident at the site, which was unknown to the restaurant operator but known to the building’s owner. The owner had taken no steps to prevent a recurrence.

Consequently, the restaurant operator was granted summary judgment, but the building’s owner was not. The owner’s insurer, Truck Insurance Exchange, then settled and sued the restaurant operator’s insurer, AMCO, for equitable subrogation, equitable indemnification, equitable contribution, and declaratory relief based on the additional insured endorsement issued by AMCO to the owner covering liability “arising out of ” the restaurant operator’s use of the premises.

AMCO argued that because the restaurant operator was found not at fault in the accident, the owner’s liability did not arise out of the operator’s use of the premises. The trial court disagreed, finding the liability exposure clearly arose out of the use of the restaurant premises. AMCO appealed.

The appellate court pointed out that the cases have consistently held that “arising out of ” does not indicate any particular standard of causation or theory of liability but broadly links a factual situation with the event creating liability, requiring no more than a minimal causal connection or incidental relationship. Accordingly, the appellate court found the additional insured endorsement applied and confirmed the judgment in favor of Truck Insurance Exchange.

Page 3

Crown Energy Servs. v. Zurich Am. Ins. Co. (N.D.Cal. 2021) 2021 U.S.Dist.LEXIS 5053 Summary: Self-insured retention applies to additional insureds as well as to the named insured, even if the retention must be paid by the named insured.

Discussion: Crown was the named insured on Zurich policies with a $500,000 self-insured retention. Crown had many clients who required that Crown have them named as additional insureds. Crown previously purchased policies with first dollar coverage, but to save premiums it renewed with policies that contained a self-insured retention applicable to both defense and indemnity.

After claims were made against additional insureds, Zurich declined to defend them because the retention had not been paid. Crown paid to defend the additional insureds, then sued Zurich alleging the coverage for additional insureds was not subject to the self-insured retention. Crown’s argument was based on the self-insured retention endorsement requiring the named insured (i.e., “you”) to make the payments that exhausted the retention.

The court granted summary judgment to Zurich because the self-insured retention endorsement clearly made the named insured’s payment of the self-insured retention a condition precedent to the insurer’s liability. Various documents exchanged in the negotiation of the policy were consistent with that requirement.

California Capital Ins. Co. v. Maiden Reinsurance North America (C.D.Cal. 2020) 472 F. Supp. 3d 754 Summary: Federal court concludes California law would not provide for tort damages in action by insurer against reinsurer.

Discussion: California Capital Insurance Company and related companies sued their reinsurer, Maiden Reinsurance, alleging causes of action for breach of contract and for breach of the implied covenant of good faith and fair dealing, seeking tort damages for the latter. Maiden removed the action to federal court, then moved to dismiss the second cause of action and to strike its request for attorney fees and statutory damages.

Plaintiffs alleged Maiden reinsured them from 2006 to 2016. Maiden was acquired by Enstar in 2018 and Enstar allegedly began fabricating reinsurance coverage disputes, among other things refusing to pay claims it has previously agreed to pay, demanding return of payments previously made, and denying covered claims.

Maiden moved to dismiss, arguing that tort damages were not available in a reinsurance dispute because the relationship between a reinsurer and reinsured is fundamentally different from that of an insurer and insured.

Because there was no controlling California precedent, the federal district court considered the circumstances in which the California Supreme Court had imposed tort liability in contractual relationships and its policy reasons for doing so. The California Supreme Court has consistently limited tort recoveries for breach of the implied covenant to the insurance context, denying their extension to employment, surety, and construction contracts, for example, and has emphasized the unique nature of insurance, which includes elements of adhesion (inability to negotiate terms), public interest in the compensation of victims of calamities, and fiduciary responsibilities of liability insurers that require them to investigate, defend, and settle claims against their insureds.

The court noted that reinsurance contracts are purchased to increase profits by spreading the burden of indemnification, allowing the reinsured to issue more coverage than its reserves would otherwise allow.

Reinsurance agreements are normally negotiated between sophisticated business people who know how to draft contract terms, including penalties for nonperformance, and sue if necessary to protect themselves.

Individual insureds are not affected by the performance of the reinsurer, and the reinsurer has no duty to investigate, defend, and settle claims against the reinsured. These factors distinguish reinsurance from insurance.

Accordingly, the federal district court concluded the California Supreme Court was unlikely to extend tort remedies to reinsurance contracts, and dismissed the bad faith cause of action to the extent it sought tort damages. However, it did not entirely dismiss the cause of action, since it alleged wrongs in addition to those alleged in the breach of contract cause of action and those wrongs were potentially compensable by contract damages.

Page 4

AXIS Reinsurance Co. v. Northrop Grumman Corp. (9th Cir. 2020) 975 F.3d 840 Summary: Improper erosion or exhaustion of an underlying policy is not a defense to excess coverage absent fraud, bad faith, or a policy provision so providing.

Discussion: Northrop had a multi-layered program of employee benefit plan fiduciary liability insurance, composed of (1) a $15 million primary insurance policy issued by National Union; (2) a $15 million excess insurance policy issued by CNA; and (3) a $15 million secondary excess insurance issued by AXIS. AXIS was required to provide coverage only when the combined $30 million liability limit of the underlying insurance policies was exhausted for “covered loss” under those policies.

AXIS argued that National Union and CNA paid a claim for alleged ERISA violations, which included claims for noncovered disgorgement by Northrop which were not adjudicated due to the settlement. AXIS contended that the settlement payments improperly eroded their policies’ liability limits so that a second claim settlement reached into AXIS’s level of coverage. AXIS did not dispute coverage for the second claim which reached into its limits, so it paid its portion of that claim and then sought reimbursement from Northrop, arguing Northrop was unjustly enriched by the underlying insurers’ settlement of the first claim. The federal district court granted summary judgment to AXIS, but the Ninth Circuit Court of Appeals reversed.

The Ninth Circuit noted that there was no precedent in the circuit for “improper erosion” liability, and agreed with Northrop’s argument “that AXIS, not Northrop, assumed the risk that Northrop’s primary and first level excess insurers might adjust claims in a manner that would trigger AXIS’s secondary excess coverage,” absent a showing that the payments were motivated by fraud or bad faith. The Ninth Circuit distinguished a prior unpublished opinion that had allowed an excess carrier to challenge that portion of a single claim that reached the excess level, despite the primary insurer’s decision not to challenge coverage for its portion. That is, the excess insurer could deny coverage for a claim it was asked to pay, but it could not challenge another insurer’s decision to pay that or a different claim. The Ninth Circuit then cited a recent federal decision from Washington holding that an excess carrier could not second guess the coverage decision of underlying insurers absent a contractual provision allowing it to be involved in the underlying insurers’ adjustment process.

In so holding, the Ninth Circuit pointed to various decisions from outside that circuit as well as the concern that allowing an “improper erosion” standard would undermine settlements and eliminate a primary reason for buying excess insurance. It acknowledged that an “improper erosion” standard could be contractually included in an excess policy and be valid, but did not find such a provision in the AXIS policy despite that policy’s requirement that underlying policies be exhausted by payment for “covered loss.”

Roberts v. County of Riverside (C.D.Cal. 2021) 2021 U.S.Dist.LEXIS 25628 Summary: Risk pool JPA not an insurance company for purposes of Probate Code claim against estate of decedent.

Discussion: The California Probate Code provides that actions may proceed against the estates of decedents (Prob. Code § 550) and that “[s]ummons shall be served on a person designated in writing by the [decedent’s] insurer or, if none, on the insurer…” (§ 552(a)). According to the courts, proof of insurance is essential to recovery under this section.

In this wrongful incarceration action, the plaintiff spent so long in prison (20 years) that some of the people allegedly responsible had died. When the plaintiff attempted to serve the county’s JPA, Public Risk Innovation, Solutions, and Management (PRISM), as “insurer” for these decedents, PRISM moved to quash the summons on the basis that it was not an insurer. Plaintiff argued PRISM could be treated as an insurer for purposes of Probate Code sections 550 and 552 due to its obligation to indemnify any judgement that might be entered against the estates in question. However, there was precedent that indemnification obligations do not allow an indemnitor to be treated as an insurer. Accordingly, PRISM’s motion to quash was granted.

Page 5

Associated Indus. Ins. Co. v. Mt. Hawley Ins. Co. (S.D.Cal. 2021) 2021 U.S.Dist.LEXIS 93605 Summary: Exclusion for claims arising directly or indirectly out of a breach of contract or warranty applies to tort claims based on the same facts as the excluded contract claims.

Discussion: This was a contribution action between two insurance companies that had issued general liability policies to a construction company. A former client sued the construction company for defective construction, asserting claims for (1) breach of the construction contract, (2) negligence, (3) unjust enrichment, (4) breach of an implied warranty that the property would be constructed free from defects and be fit for ordinary purposes, and (5) breach of an implied covenant to perform its work in a competent manner.

Mt. Hawley refused to defend the action, relying in part on a Breach of Contract Exclusion in its policies that excluded “any claim or ‘suit’ … arising directly or indirectly out of ” a “[b]reach of express or implied contract” or a “[b]reach of express or implied warranty.” Plaintiff insurer argued the exclusion did not apply to noncontractual claims, while defendant argued that all claims were based on the same facts as the contract claims and therefore all were subject to the exclusion. Because California courts construe the phrase “arising out of ” broadly even when used in an exclusion, and look to the conduct alleged rather than the legal theories relied upon, the court agreed with the defendant that the exclusion applied to the various claims that were all based on the same facts.

Otherwise, it observed, claimants might recharacterize their breach of contract claims as noncontractual ones to manufacture coverage where it would not otherwise exist.

Finally, the court rejected the plaintiff ’s argument that defendant waived the contract exclusion by failing to mention it in its initial denial letter. California law requires proof of waiver by clear and convincing evidence of an intent to waive a known right. Mere omission does not establish such intent. Accordingly, the exclusion is not waived.

WORKERS’ COMPENSATION CASES

Summaries provided by Randal C. McClendon of Cuneo, Black, Ward & Missler Rosenbrook v. Knight-Swift Transportation Holdings, Inc. 2021 Cal. Wrk. Comp. P.D. LEXIS 16 Summary: A telehealth medical-legal evaluation that satisfies the provisions of Emergency Regulation Section 46.2 is an appropriate alternative to an in-person evaluation during the current Covid-19 pandemic.

Discussion: Applicant claimed injury to the low back, urology system, and internal system in the form of diabetes and hypertension on 6/27/2013 while employed as a driver by Knight-Swift Transportation. Defendant accepted the low back but disputed other alleged body parts.

The parties obtained a QME panel in internal medicine, and Dr. Bahman Omrani was selected. On 8/21/2020, applicant sent a letter to Dr. Omrani asking if a physical exam was required or if he would agree to proceed with a telehealth appointment. Dr. Omrani agreed to proceed with the evaluation via telehealth. Defendant refused to agree to move forward with the telehealth evaluation, so applicant filed a DOR for an expedited hearing on the issue.

At trial, the applicant testified that he lives in Washington State, so for him to attend the QME evaluation in person, he would have to travel to California. He further testified that he has medical conditions that make him high risk, so he was concerned about traveling to an in-person examination. Applicant testified he agreed to proceed with a telehealth examination, and if testing were required, he would go to a local place to complete it.

The WCJ issued the Findings & Order stating that defendant’s denial of the QME evaluation via telehealth was unreasonable pursuant to Emergency Regulation 46.2(a)(3)(C), and the parties were ordered to proceed with a telehealth examination with Dr. Omrani.

Defendant filed a Petition for Reconsideration asserting that the elements of Section 46.2(a)(3) were not met, and therefore the applicant was required to attend an in-person QME evaluation. The WCAB agreed with the WCJ that defendant unreasonably denied agreeing to a telehealth evaluation per the emergency regulation, that the Page 6

applicant had met all the elements in Emergency Regulation 46.2(a)(3), and that the defendant has not shown significant prejudice or irreparable harm by the order for a telehealth evaluation with the QME. In so finding, the WCAB stated, “We decline to order him to risk his health and the health of his household, in addition to potentially other members of the public, to attend an in-person evaluation with Dr. Omrani.”

Harris v. Oakland Raiders 2021 Cal. Wrk. Comp. P.D. LEXIS 17 Summary: In person med-legal examinations are allowed during the pandemic if the applicant is willing to travel and the physicians conducting the examinations are able to safely conduct in-person examinations.

Discussion: Applicant, while living outside California, obtained panels in Internal Medicine, Otolaryngology, and Neurology. Applicant wished to travel to California to complete her medical-legal evaluations. Defendant objected, contending that allowing applicant to travel to California was contrary to California’s public policy and CDC’s health guidelines. Defendant claimed that the travel would expose them to unnecessary liability. Instead, defendant proposed that all discovery necessitating travel to California be stayed until such time as it was safe to travel, whenever that may be. The parties proceeded to a Priority Conference on the issue.

At the Conference, the WCJ issued an Order as follows: “DEF is ordered to arrange QME appointments with Dr. Moore, Dr. Stewart, and Dr. Smith. DEF objection re: risk of travel is noted, but not a basis to prevent exams from taking place or Applicant traveling to CA.” Defendant filed a Petition for Removal contending that the order would cause substantial prejudice and irreparable harm.

The Court denied the removal petition finding that applicant was willing to make the trip, the physicians were willing to conduct the examinations and that Governor Newsom’s Order regarding travel restrictions did not apply to residents of other states.

Urias v. PT Gaming 2021 Cal. Wrk. Comp. P.D. LEXIS 76 Summary: A stipulation to an industrial injury is sufficient to establish an employer’s liability for the Supplemental Job Displacement Benefit (SJDB) Voucher.

Discussion: Applicant sustained industrial injury in a cumulative trauma on 9/4/2015. At some point, the claim resolved by way of C&R. Settlement of the Supplemental Job Displacement Benefit Voucher was not noted in the C&R documentation (nor was it initialed). Subsequently, applicant claimed the SJDB, and the issue went to trial as to whether applicant’s voluntary resignation precluded issuance of the voucher and whether the WCAB lacked jurisdiction to determine eligibility for the voucher after the C&R was final.

Upholding the WCJ, the WCAB relied on the prior en banc decision in Dennis v. State of CA (2020) 85 CCC 389 where the employer’s inability to make a bona fide offer of regular, modified, or alternative work did not release the statutory obligation to provide a voucher under Labor Code 4658.7. The employer must make the offer to avoid liability under the statute.

Here, the amended Pre-Trial Conference statement stipulated to an industrial injury, although a prior version did not. The facts are unclear as to whether there was any evidence of permanent disability, or even an industrial injury, but the WCAB determined that the stipulation was sufficient to establish liability for the voucher.

NOTABLY, Chair Zalewski took it upon herself to concur and dissent, and write separately, that to the extent the majority opinion could be read to support settlement of the voucher under any conditions, she dissents.

She specifically disavows Beltran, opining that Labor Code 4658.7 and its legislative history expressly preclude “cashing out” the voucher under any circumstances. The wrong panel could eventually throw Beltran right out the window.

Gonzalez v. Aerotec Alloys 2020 Cal. Wrk. Comp. P.D. LEXIS 423 (Board Panel Decision) Summary: Whether a psychiatric injury arises from actual events of employment is a factual/legal issue for the WCJ and not a medical issue.

Page 7

Discussion: Applicant was employed as a metal pourer for Aerotec Alloys from 11/25/2002 through 5/29/2018 and claimed injuries to his psyche. Defendant denied the claim raising the good faith personnel defense pursuant to Labor Code 3208(h), statute of limitations, and post-termination defense. Applicant was terminated for failing to return to work after a suspension/vacation.

Applicant began treating with Dr. Grewal on 7/31/2018. Dr. Grewal indicates that applicant’s injury was the result of actual events of his employment which are described as having issues and arguments with his supervisor and an engineer. Applicant told Dr. Grewal that he was being discriminated against and mistreated. Applicant was then seen by QME Dr. Drucker on 5/9/2019. The QME indicated that this is a stress claim which involves two supervisors, one of whom harassed applicant directly and one who harassed him indirectly.

On 10/16/2020, the Court issued its Findings of Fact in which it found that applicant failed to meet his burden regarding sustaining injury to his psyche AOE/COE. The WCJ noted that the first determination to be made with respect to the compensability of an alleged psychiatric injury is whether actual events of employment are involved. Applicant has the burden of proving industrial causation of injury. When there is conflicting testimony on matters of fact and there are issues of credibility of witnesses, the decision is solely for the trier of fact.

Applicant thereafter filed a Petition for Reconsideration.

The WCAB agreed that the question of whether the alleged cause of injury involved actual events of employment is a factual/legal determination made by the WCJ, not a medical determination.

Applicant testified that the supervisors would make fun of him and laugh and that he was intimidated. He further testified that he saw the supervisor laughing, but never heard what he was saying and did not know what they were laughing about. In contrast, the supervisor testified to never laughing at, ridiculing, bullying, or following applicant. Applicant’s attorney failed to provide any additional witnesses beyond applicant. Thus, the only testimony contradicting the supervisors was that applicant believed that two supervisors were laughing at him because they would look at him when they were talking.

The belief that something may be happening is insufficient for a finding that actual events of employment are involved when applicant testified that he did not know what they were saying or laughing about. The determination that actual events were not involved was based on the credibility of the witnesses regarding whether or not applicant was actually laughed at. Accordingly, the WCAB agreed with the WCJ finding that applicant did not meet his burden of proof to establish that his injury was caused by actual events of employment.

Lua v. Lua’s Bldg. Servs. 2021 Cal. Wrk. Comp. P.D. LEXIS 58 (Board Panel Decision) Summary: Mere deviation by an employee from a strict course of duty does not release the master from liability.

In order to have such an effect, the deviation must be shown substantially to amount to an entire departure.

Discussion: Applicant, Miguel Lua, employed as a journeyman on 4/30/2018 by Lua’s Building Services, sustained an injury arising out of and in the course of employment to his head, brain, and right wrist. Defendant argues that applicant materially deviated from his errand at the time of the motor vehicle accident that caused his injuries.

Applicant testified that the reason he was driving late at night on 4/30/2018 was to return his employer’s boat to Hollister. Applicant was involved in a motor vehicle accident around 9:23 pm. Applicant testified that he left the McDonald’s on San Felipe Road in Hollister shortly before the accident occurred. Applicant also testified that he has no set time for breaks. The employer told him that he can stop for food when he is hungry or take a nap when he is tired. Applicant had not felt hungry until he reached Hollister. He planned to eat at Lua’s shop. He did not eat at the restaurant because it was late. He drove at the 55 MPH speed limit to get from that McDonald’s to Lua’s yard.

The WCAB found that although applicant’s reasons for driving at that particular time when the accident occurred were in part personal and in part professional, he is not barred from compensation because his reasons were two-fold. The WCAB cited to Lockheed Aircraft Corp. v. Industrial Acc. Com., and Argonaut Ins. Co. v.

Page 8

I.A.C.: “The status of an employee acting in the course of his employment is not destroyed by the fact that he may be pursuing a dual purpose. If he is carrying out some duty or right in connection with his employment, and combines with it an object of his own, he is still considered to be acting in the course of his employment where the employee is combining his own business with that of his employer, or attending to both at substantially the same time, no nice inquiry will be made as to which business he was actually engaged in at the time of injury, unless it clearly appears that neither directly or indirectly could he have been serving his employer.”

Applied Materials v. WCAB 2021 86 CCC 331 Summary: An applicant was entitled to an unapportioned 100 percent award due to post-traumatic stress disorder caused directly and entirely by the primary treating workers’ compensation physician’s sexual misconduct.

Discussion: A worker claimed three industrial injuries from 1996 until 2008: a specific injury in 2001, a specific injury in 2005, and a cumulative trauma injury through her last day of work in 2008. Applicant was evaluated by a psychiatric QME, Dr. Sidle, for the 2008 CT claim. In 2013, when Dr. Sidle saw applicant, he felt that she was severely depressed and suicidal and that she urgently needed inpatient psychiatric treatment.

Subsequent evaluations revealed that applicant had been engaging in a sexual relationship with her treating pain management physician.

According to the applicant, the pain doctor had made multiple suggestive comments to her in his office beginning in 2012 indicating they should become involved. Over the ensuing year, he engaged in increasingly bold sexually provocative actions and comments. Beginning in 2013, he showed up multiple times at her house and they engaged in sexual intercourse. As a result, the applicant became increasingly anxious and depressed.

The applicant ultimately started refusing to engage in sexual activity. The records show that he contacted her over 70 times between May and November of 2013. The injured worker testified that her physician controlled her medication and her entitlement to benefits including Social Security Disability as well as workers’ compensation benefits, and she felt she was stuck in a relationship because he was her physician.

In January 2016, after she disclosed additional details about her sexual contacts with the physician, Dr. Sidle diagnosed her with post-traumatic stress disorder (PTSD). Dr. Sidle reported the worker had a Global Assessment of Function (GAF) score of 45 but also opined that she was 100 percent permanently disabled based on her psychiatric condition alone and unable to work.

Dr. Sidle later testified that the disability was entirely due to her PTSD, which was due entirely to her sexual relationship with the pain doctor.

On the primary issue for appeal, the 6th District Court of Appeal held that the worker’s psychiatric disability that arose out of her sexual exploitation by the doctor was compensable. It rejected the argument that the worker broke the chain of industrial causation when she entered into a personal relationship with her doctor outside of the medical setting, and that her PTSD did not arise out of the employment because the sexual activity between the doctor and applicant occurred in her home, did not involve medical treatment, and was consensual. The Court explained that a worker is entitled to compensation for a new or aggravated injury that results from medical treatment of an industrial injury.

Alex v. All Nation Security Services, Inc. 2021 Cal. Wrk. Comp. P.D. LEXIS 139 Summary: The performance of a duty in an unauthorized manner does not take the employee outside the course of employment.

Discussion: Applicant was employed as a security officer/guard by All Nation Security Services, Inc. on August 24, 2017. During his shift, a homeless person came inside the lobby of the Greyhound bus station. The person was dancing, speaking badly in the lobby, and disrupting bus passengers. An employee asked applicant to escort the homeless person outside. Applicant asked the person to leave. The person did not leave and cursed at applicant. Applicant then chased the person outside the building and tripped on the sidewalk, outside of the bus Page 9

station. Applicant attempted to rise when the homeless person returned and struck applicant in the left temple with a fist causing applicant to fall backwards striking his head.

QME Dr. Anderson diagnosed applicant with left temporal intracranial hemorrhage, post-concussive syndrome, and persistent headaches attributed to moderate traumatic brain injury. Defendant argued that the fact that applicant exited the station and attempted to chase an individual constituted deviation from his job and took applicant outside the course of employment. The job summary states that the primary purpose of the security officer is to provide protection for Greyhound property and personnel. The employee manual also states that the security offices are “expected to challenge persons in a professional manner to enforce access to restricted areas” but are not to put themselves in danger.

Labor Code 3600 imposes liability on an employer for workers’ compensation benefits only if its employee sustains an injury “arising out of and in the course of employment.” An employer is liable, where, at the time of the injury, an employee is “performing service growing out of and incidental to his or her employment and is acting within the course of employment.” The WCAB held that the performance of a duty in an unauthorized manner does not take the employee outside the course of employment. The fact that the applicant exited the bus station and attempted to chase and/or apprehend the individual did not constitute a deviation that took him outside of the course of his employment.

CIVIL RIGHTS CASES

Summaries provided by Noah G. Blechman , Darra Lanigan, Alexander Romero, and Ashlee Thomas of McNamara, Ney, Beatty, Slattery, Borges & Ambacher, LLP B.B. v. County of Los Angeles (2020) 10 Cal.5th 1 Summary: California Civil Code § 1431.2, comparative fault, does not apply to intentional tortfeasors held liable for injures based on an intentional tort.

Discussion: On August 3, 2012, Los Angeles County Sheriff ’s deputies responded to a report of an ongoing assault. Darren Burley was on scene, making slow, stiff, exaggerated robotic movements, foaming at the mouth, and grunting. Deputies suspected Burley was on PCP. A struggle ensued, in which multiple officers put as much bodyweight as they could on his head, neck, and back. At one point, an officer had Burley in a headlock.

Witnesses saw officers hit Burley in the head 7-10 times. There were disputed facts regarding what happened after Burley was restrained. Officers stated they stopped using force against Burley. The fire captain testified otherwise. Regardless, Burley’s pulse stopped, he lost consciousness, and ten days later, he died. According to the autopsy, Burley died from brain death and swelling from lack of oxygen following cardiac arrest due to status post restraint maneuvers, or behavior associated with cocaine, PCP and cannabinoids intake. The jury found against Deputy Aviles, attributing 20% of the responsibility for Burley’s death to his unreasonable use of force, 40% of the responsibility for Burley’s death to Burley himself, and the remaining 40% to the other two deputies.

The trial court entered judgment for 100% of the non-economic damages against Deputy Aviles, because his liability was based on an intentional tort, battery. The Court of Appeals reversed that judgement, holding that § 1431.2 limits the liability for noneconomic damages of all defendants, including intentional tortfeasors.

Civil Code § 1431.2 (a) provides: “In any action for personal injury, property damage, or wrongful death, based upon principles of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint. Each defendant shall be liable only for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant’s percentage of fault, and a separate judgment shall be rendered against that defendant for that amount.” Plaintiffs argued that the phrase “based on principles of comparative fault” meant that the statute did not apply to intentional tortfeasors, as intentional tort actions are not based in principles of comparative fault. The California Supreme Court agreed with that interpretation, holding that § 1431.2 does not authorize a reduction in the liability of intentional tortfeasors for non-economic damages.

Page 10

Ventura v. Rutledge (9th Cir. 2020) 978 F.3d 1088 Summary: The Ninth Circuit affirmed the grant of summary judgement on the basis of qualified immunity. No controlling precedent established that the use of deadly force violated the decedent’s rights, when the decedent was shot and killed as he advanced toward an individual he had reportedly just assaulted, with a drawn knife, in defiance of police orders to stop.

Discussion: On December 24, 2015, officers responded to a 911 call regarding several instances of domestic violence. When officers arrived on scene, the victim, Martha Andrade, identified her attacker as Omar Ventura, who at that time was approaching her and the officers. Officer Rutledge issued orders for Ventura to stop, which he ignored. Ventura took a knife from his pocket and continued towards Andrade, saying, “Is this what you wanted?” Officer Rutledge then shouted a warning, “Stop, or I’ll shoot”. Ventura did not stop and the officer fired two shots at him. The shots killed Ventura. The parties agree that Ventura got within 10-15 feet of Andrade before Officer Rutledge fired.

Officer Rutledge was entitled to qualified immunity as it was not clearly established under the law that Officer Rutledge’s use of deadly force was unconstitutional. Ventura was advancing with a knife, toward a woman whom he had reportedly just assaulted. Ventura ignored repeated commands to stop and a warning that Officer Rutledge would shoot. The plaintiffs failed to show that it was established that the use of deadly force under these circumstances, constituted excessive force.

Cortesluna v. Leon (9th Cir. 2020) 979 F.3d 645 Summary: The Ninth Circuit affirmed summary judgment for Officer Leon for deploying a beanbag shotgun at Plaintiff when he lowered his hands towards his thighs, where a knife was located. The Ninth Circuit reversed summary judgment for Officer Rivas-Villegas, who kneeled on Plaintiff ’s back just a few minutes later, stating there was a genuine issue of material fact as to whether that force was excessive on a prone and non-resisting person. The Court also affirmed summary judgment for the supervising sergeant, finding he lacked any realistic opportunity to intercede to stop any claimed excessive force, but reversed summary judgment on the Monell claims, given the decision regarding Officer Rivas-Villegas.

Discussion: On November 6, 2016, dispatchers received a 911 call from a 12-year-old girl, who reported that her mother’s boyfriend, Cortesluna, had a chainsaw and was going to attack them. The children and their mother had barricaded themselves in a room. The 911 dispatcher heard a sawing sound. When officers arrived on scene, Cortesluna no longer had the chainsaw, and appeared to be inside drinking a beer. Officer Leon had a beanbag shotgun. Cortesluna came out of the house, holding a metal item that appeared to be a crowbar. He dropped it when ordered to do so. Officer Rivas-Villegas saw a knife in the pants pocket of Cortesluna, which he announced, and told Cortesluna to keep his hands up, and not to put his hands down. Cortesluna lowered his head and his hands. Officer Leon then fired a beanbag round at him. He fired a second beanbag round at Cortesluna while his hands remained in a downward position. After the second shot, Cortesluna put his hands over his head. Officers ordered Cortesluna to get on the ground. Officer Rivas-Villegas used his foot to push Plaintiff to the ground. Then, Rivas-Villegas pressed his knee into Cortesluna’s back while Officer Leon handcuffed him. Other officers entered the house, and the incident ended.

The district court granted summary judgement to the individual defendants on the federal claims. The district court held that the force used was objectively reasonable and the officers were entitled to qualified immunity. As to the use of the beanbag shotgun and Officer Leon, the Ninth Circuit agreed. In the Court’s Graham analysis, the crime alleged here was severe, Cortesluna allegedly threatened children, and their mother, with a chainsaw.

Officer Leon faced an immediate threat, as Cortesluna had a knife, and Officer Leon was not in a position to see the knife was blade-up in his pocket. Finally, Cortesluna was not compliant with the officers. Before the first beanbag shot was fired, Cortesluna put his hands down by the knife after being told to keep his hands up. His hands remained in that relative position at the time of the second beanbag shot. For those reasons, Officer Leon’s use of force was objectively reasonable.

Page 11

As to Officer Rivas-Villegas, the Ninth Circuit held there was a genuine dispute of material fact that required resolution by a jury. Once Cortesluna had been shot twice by the beanbag shotgun, the objective situation changed dramatically. At the time Rivas-Villegas put his knee on Cortesluna’s back, Cortesluna was lying face down on the ground, in pain from the beanbag rounds, and not resisting. Furthermore, Officer Rivas-Villegas, unlike Officer Leon, could see the knife was blade up in Cortesluna’s pocket, making it unlikely the suspect could pull the knife out and use it to attack. Cortesluna alleges lingering injuries from Officer Rivas-Villegas’s knee. In viewing these facts in the light most favorable to Cortesluna, a genuine dispute of material fact existed.

Sandoval v. County of San Diego (9th Cir. 2021) 985 F.3d 657 Summary: An objective deliberate indifference standard should have been applied to a claim of inadequate medical care to a pretrial detainee.

Discussion: Pretrial detainee Sandoval died of a methamphetamine overdose at a San Diego jail after medical staff left him unmonitored for eight hours, even though he exhibited signs of being under the influence. The nurses also failed to promptly summon paramedics when they discovered Sandoval unresponsive and having a seizure. The Ninth Circuit found that the district court erred in applying a subjective deliberate indifference standard and instead found that an objective standard applies to constitutional claims of inadequate medical care brought by pretrial detainees.

When the court applied the objective framework it found that a jury could conclude Sandoval would not have died but for the defendants’ unreasonable response to his obvious signs of medical distress. The court explained that a jury could find that a reasonable nurse who was told of Sandoval’s condition and who was specifically directed to evaluate Sandoval more thoroughly, would have understood the risk of harm. Because of this, the court decided that the defendant nurse was not entitled to summary judgment, and reversed the district court’s ruling. The court further held that since the law was clearly established at the time as to the unreasonableness of the nurse’s conduct, the nurse was not entitled to qualified immunity.

Estate of Anderson v. Marsh (9th Cir. 2021) 985 F. 3d 726 Summary: An officer’s appeal of the district court’s denial of summary judgment based on qualified immunity was dismissed, as the appeal raised an evidence-sufficiency challenge and the appellate court lacks jurisdiction over such matters.

Discussion: California Highway Patrol (“CHP”) officer John Marsh observed a vehicle traveling at a high rate of speed. When Ofc. Marsh attempted to stop the vehicle, the driver, Anderson, evaded the stop and led Ofc. Marsh on a three-minute pursuit until Anderson lost control of the vehicle and crashed into a chain-link fence.

After the crash, Ofc. Marsh claimed that he heard the engine of the vehicle revving and saw the car rocking as if Anderson was attempting to dislodge it from the fence. Ofc. Marsh approached the vehicle and ordered Anderson to stop the car and show his hands. Ofc. Marsh testified that Anderson reached toward the passenger seat or floorboard and he feared Anderson was reaching for a weapon. Ofc. Marsh fired two rounds, one of which struck Anderson and paralyzed him.

Anderson filed this claim but then died of causes not directly related to this incident, and his estate took over the litigation. The district court denied Marsh’s motion for summary judgment, finding that a jury could conclude that Anderson did not make a sudden reach for the passenger side of the car and thus, a jury could find that there was a lack of imminent threat, rendering the use of force excessive. Ofc. Marsh appealed, claiming the district court erred in finding disputed issues of material fact regarding whether Anderson made a sudden movement as if he were reaching for a weapon. The Ninth Circuit concluded that they lacked jurisdiction over the appeal because Marsh only challenged the district court’s determination that there is a genuine factual dispute. The court explained, they would have jurisdiction over an argument that the law is not clearly established that takes the facts in the light most favorable to the estate. However, the court does not have jurisdiction to decide whether there is enough evidence in the record for a jury to conclude that certain facts favorable to the estate are true.

Page 12

Villanueva v. California (9th Cir. 2021) 986 F.3d 1158 Summary: Officers were denied qualified immunity on plaintiffs’ Fourth Amendment excessive force claim when the officers used deadly force against a slow-moving vehicle because they lacked an objectively reasonable basis to fear for their own safety since they could simply have moved out of the way to avoid being injured.

Discussion: Two officers were on patrol looking for illegal street racing or “sideshows” where streets are blocked off so that vehicles can perform unlawful maneuvers. The officers came upon one of these sideshows and witnessed one car, a Silverado truck occupied by Orozco and driven by Villanueva, perform or attempt to perform an illegal maneuver. The officers entered the parking lot and intended to make a traffic stop. Villanueva drove away and officers followed until the Silverado was forced to stop at a dead-end street. The officers exited their vehicle and drew their firearms. Villanueva attempted to reverse and conduct a three-point turn. The officers opened fire, killing Villanueva and injuring Orozco.

Orozco and Villanueva’s parents, on behalf of their son, filed this suit which includes an excessive force in violation of the Fourth Amendment claim. The officers moved for summary judgment and the district court denied it finding Orozco had standing to bring the claim, and construing the facts in the light most favorable to the plaintiffs, a reasonable jury could find that the officers used excessive force in violation of the Fourth Amendment. The Ninth Circuit concluded that because Orozco’s freedom of movement was terminated when the officers intentionally shot at the vehicle in which he was a passenger, he was seized within the meaning of the Fourth Amendment. Further, although the officers argued that their use of deadly force did not violate the Fourth Amendment because Villanueva threatened them with a deadly weapon (truck), the court concluded that since an officer who shoots at a slow-moving vehicle when he can easily step out of the way violates the Fourth Amendment, the officers were not entitled to qualified immunity.

Tabares v. City of Huntington Beach (9th Cir. 2021) 2021 U.S. App. LEXIS 4470 Summary: The Ninth Circuit found that the officer was improperly granted summary judgment on the plaintiff ’s negligence claim because the district court improperly conflated the legal standards under the Fourth Amendment and California negligence law.

Discussion: Officer Esparza sat at an intersection in his police vehicle when he noticed Tabares standing on the sidewalk. Tabares caught the officer’s attention because he was wearing a sweater on a warm day, was walking abnormally, made fidgeting and flinching movements with his hands, and looked in the officer’s direction several times. Ofc. Esparza decided to detain Tabares. The two began to fight and during the struggle, Tabares grabbed the flashlight from the officer’s belt. Ofc. Esparza drew his gun and separated from Tabares by about 15 feet.

Three seconds after separating, Ofc. Esparza shot Tabares seven times in total, killing him.

Ms. Tabares filed claims that included an excessive force claim under the Fourth Amendment in addition to claims under California law claims including a negligence claim. The district court granted summary judgment on all claims for the Defendants. The Ninth Circuit called attention to the differences between the Fourth Amendment legal standard and the California negligence legal standard. Essentially, California negligence law is broader than federal Fourth Amendment law. For instance, in California, officers are liable “if the tactical conduct and decisions leading up to the use of deadly force show, as part of the totality of circumstances, that the use of deadly was unreasonable.” This means that the officer’s pre-shooting decisions can render his behavior unreasonable under the totality of the circumstances, even if his use of deadly force at the moment of shooting may be reasonable in isolation. See, e.g. Mendez v. Cnty. of Los Angeles, 897 F. 3d 1067, 1082-83 (9th Cir. 2018). The Ninth Circuit found the district court inaccurately concluded that Ms. Tabares did not point to any evidence probative of the fact that her son showed signs of mental illness, and it conflated the broader California negligence standard with the Fourth Amendment standard, not considering that a jury could find the officer’s pre-shooting conduct was unreasonable under California law. Ultimately, the court found that the plaintiff ’s claim survived summary judgment under the broader California negligence law.

Page 13

Hernandez v. Town of Gilbert (9th Cir. 2021) 989 F.3d 739 Summary: Summary judgment for a canine officer on the basis of qualified immunity was affirmed and upheld.

The Ninth Circuit agreed with the district court’s finding that there was no clearly established law governing the reasonableness of using a canine to subdue a noncompliant suspect who resisted several types of force and refused to surrender.

Discussion: Scott Hernandez filed a § 1983 suit alleging canine Officer Steve Gilbert and the Town of Gilbert, Arizona, used excessive force in effecting Hernandez’s arrest for driving under the influence and resisting arrest.

Following a brief police chase, Hernandez fled to his home where he activated the remote-controlled garage door opener, remained in control of his car inside the garage for eight minutes, refused multiple commands to get out of the car, and resisted lesser force employed by officers, including the use of several body control holds and the use of pepper spray, without effect while he continued resisting. To force compliance, after issuing several verbal warnings that a canine would be deployed, Ofc. Gilbert released his police dog. Hernandez continued to resist even after the dog bit him. Officers eventually completed the arrest.

The district court granted summary judgment on the basis of qualified immunity, finding it was not clearly established that an officer in Ofc. Gilbert’s position, deploying a canine to subdue a noncompliant suspect, acted unreasonably or in violation of the Fourth Amendment. The Ninth Circuit affirmed this decision. In affirming the district court’s grant of qualified immunity to Defendant on Hernandez’s excessive force claim, the panel held that no clearly established law governed the reasonableness of using a canine to subdue a noncompliant suspect who resisted other types of force and refused to surrender. The panel held that neither the initial deployment of the canine nor the duration of the bite violated clearly established law. The panel noted that officers employed an escalating array of control techniques, none of which were effective in getting Hernandez to surrender, before deciding to release the police dog. The panel further held that Hernandez’s claim that the duration of the bite was unreasonable because he had surrendered was contradicted by the video evidence captured on the police officers’ body cameras, showing Hernandez clearly continued to resist arrest.

Rice v. Morehouse (9th Cir. 2021) 989 F.3d 1112 Summary: Officers were not entitled to qualified immunity after performing a take down on a man who was passively resisting and refusing to cooperate during a traffic stop.

Discussion: In December 2011, while traveling with his family on Interstate 84 in Boise, Idaho, Lee Rice was stopped by Idaho state police for failing to signal before making a lane change. Believing there was no reason for the stop, Rice refused to give the officer his license and registration. The officer performing the stop, Officer Murakami, put out a call for back up, requesting one unit to assist her in removing Rice from his vehicle. Dozens of officers, including Officers Morehouse and Shaffer, responded to the scene and pulled Rice out of his car.

As Rice was led from his car, Officers Morehouse and Shaffer tripped him causing him to fall to the ground, allowing the officers to pin him down and handcuff him. Rice filed a suit against the officers for violating his Fourth Amendment rights.

The district court granted summary judgment in favor the officers on the basis of qualified immunity, finding that the officers did not violate Rice’s constitutional rights, and if they did, the right was not clearly established.

The Ninth Circuit found the opposite and reversed the district court. The Ninth Circuit determined a jury could find that Officers Morehouse and Shaffer used excessive force by performing a takedown of Rice after he refused to turn over his identification. Further, the Ninth Circuit held the right to be free from non-trivial force for engaging in passive resistance was clearly established at the time of the incident, therefore precluding qualified immunity.

Page 14

Lemos v. County of Sonoma (9th Cir. 2021) 2021 U.S. App. LEXIS 21108 Summary: Deputy Marcus Holton did not use excessive force when attempting to stop Plaintiff Gabbi Lemos from fleeing arrest and the district court properly found Plaintiff ’s § 1983 excessive force claims were Heckbarred following her conviction for a violation California Penal Code § 148(a)(1) (resisting, obstructing and/or delaying a peace officer).

Discussion: In June 2015, Deputy Holton came upon what he believed to be a possible domestic dispute after seeing a truck blocking traffic and hearing screaming. As Deputy Holton attempted to speak with the male occupant of the vehicle, 18-year-old Lemos inserted herself between the deputy and the car door while pointing her finger at the deputy and yelling he was not allowed into the truck. Deputy Holton ordered Lemos to cease interfering with his investigation, but she refused to comply. Later, as Deputy Holton attempted to arrest Lemos for a violation of P.C. §148(a)(1), Lemos began to walk away prompting Deputy Holton to grab her and bring her to the ground to complete her arrest.

In November 2015, Lemos filed a § 1983 lawsuit alleging excessive force in connection with her June 2015 arrest. In April 2016, her § 1983 action was stayed while the State brought criminal charges against her for resisting, obstructing, and delaying a peace officer. In August 2016, Lemos was convicted by a jury that found Deputy Holton acted lawfully in the performance of his duties and that Lemos had willfully resisted, delayed or obstructed his performance of those duties. Following the completion of the criminal trial, the district court lifted the stay on the § 1983 action. Eventually, the district court awarded summary judgment in favor of the Defendants on the basis that Lemos’ claims were Heck-barred and all material factual disputes had been resolved by the criminal jury. The Ninth Circuit affirmed the district court’s ruling.

Gordon v. County of Orange (9th Cir. 2021) 2021 U.S. App. LEXIS 22055 Summary: Pre-trial detainees are entitled to adequate, direct-visual safety checks when they are known to require medical attention.

Discussion: In September 2013, inmate Mathew Gordon was arrested by the Placentia Police Department on charges related to the drug possession. Later that day, Gordon was brought to the Orange County Central Men’s Jail where he informed the intake nurse that he consumed an average of 3-grams of heroin per day. Despite being informed of Gordon’s drug usage and dependency, Nurse Debbie Finley failed to initiate a drug detoxification protocol. Eventually, a non-party medical doctor ordered that Gordon be placed on an alcohol detoxification protocol and his jail identification card was updated to read: “Medical Attention Required.”

Gordon was housed in Module C, which was subject to safety checks every 60 minutes. On the evening of September 9th, after approximately 30 hours at the jail, Gordon was found unresponsive in his cell. Deputy Denney, the Module C deputy on duty that night, testified that he completed his safety checks on Gordon from approximately 12 to 15 feet from Gordon’s bunk. Deputy Denney admitted from that vantage point, he could not ascertain whether Gordon was breathing, alive, or if he was suffering from any medical emergency.

The Ninth Circuit concluded that pre-trial detainees have a clearly established, constitutional right to proper medical intake screenings. The Ninth Circuit explained prison officials violate the Constitution when they choose a course of treatment that is medically unacceptable and Nurse Finley’s failure to act on Gordon’s admitted substance abuse could be considered medically unacceptable. Further, the Ninth Circuit concluded that while it was not clearly established at the time of Gordon’s death, pre-trial detainees have a constitutional right to direct-view safety checks when the inmate is known to require medical attention. However, because this right was not clearly established in 2013, Deputy Denney was granted qualified immunity.

Page 15

CLAIM PRESENTATION CASES

Summaries provided by Kimberly Y. Chin, Allen Glaessner Hazelwood & Werth, LLP CLAIM PRESENTATION N.G. v. County of San Diego (2020) 59 Cal.App.5th 63 Summary: Trial court did not abuse its discretion in finding that a sexual assault victim had not established mistake or excusable neglect to support her petition for relief from the claim filing requirement.

Discussion: On October 5, 2017, Petitioner N.G. (“Petitioner”) was driving to a motel with her daughter after an argument with her husband. San Diego County Deputy Sheriff Richard Fischer (“Fischer”), along with other deputies, pulled her over because Petitioner’s husband had falsely reported that she was driving while under the influence of drugs and alcohol. Fischer later called Petitioner on her cell phone and showed up at her motel room. He told Petitioner to go to the bathroom where he closed the door and hugged her, telling her she was gorgeous. Fischer then left but later called Petitioner and returned to her hotel room where he again directed her to the bathroom and hugged and groped her.

Petitioner then submitted a proposed claim for damages to the County of San Diego (“County”) on June 25, 2018, 81 days after the six-month period for filing a claim expired. She also filed an application for leave to file a late claim. The County denied leave to file a late claim.

On October 1, 2018, Petitioner filed a petition with the court for relief from the claim presentation requirement, alleging that he failure to present a timely claim was the result of excusable neglect or mistake. Petitioner submitted a declaration in support of the petition in which she claimed she was scared to report Fischer; she was mentally depressed after the incident; and she feared no one would believe her. She also declared that she ultimately contacted a lawyer and filed a claim with the County because she saw a news report about Fischer being accused of hugging and groping other women. Finally, she stated that until she sought legal advice, she was unaware of the six-month claim filing deadline.

The trial court denied Petitioner’s petition, finding that she had not presented any evidence that she had a physical or mental disability which limited her ability to function or seek out counsel and thus, had not made the exceptional showing to establish excusable neglect. Petitioner appealed.

On review, the appellate court confirmed that relief on the grounds of mistake, inadvertence, surprise or excusable neglect is only available on a showing that the claimant’s failure to present a claim was reasonable and that a showing of reasonable diligence is required to establish that the petitioner acted as a reasonably prudent person. The appellate court further noted that in certain exceptional cases, excusable neglect may be found based on extreme instances of physical or mental disability or on deliberating emotional trauma, but that it took an exceptional showing by establishing that the trauma had substantially interfered with the petitioner’s ability to function in daily life, take care of one’s personal and business affairs, or seek out legal counsel. However, Petitioner had not made such a showing.

Daneshmand v. City of San Juan Capistrano (2021) 60 Cal.App.5th 923 Summary: The one-year claim presentation period applied to claims relating to overpayment of water rates and began to run from the date of last payment due.

Discussion: The City of San Juan Capistrano (“City”) approved tiered water rates effective February 1, 2010, which were in effect until June 30, 2014. These tiered water rates were later challenged and found to be unconstitutional.

On June 16, 2015, the City approved a water rate fee refund program under which any ratepayer who was overcharged between August 28, 2013 and June 30, 2014 would receive as a refund or utility credit the difference between the amount paid and the amount that would have been paid.

Page 16

Plaintiffs served their first government claim on the City on September 15, 2015 and their second government claim on December 4, 2015. The City denied both as untimely and not within the Refund Program.

Plaintiffs then sued the City on behalf of themselves and a putative class of ratepayers for breach of contract, breach of the implied covenant of good faith and fair dealing, for money had and received, and negligence. The parties stipulated to a bench trial to determine whether the claim presentation requirement and the statute of limitations barred Plaintiffs’ claims. After the bench trial, the court issued a statement of decision finding that Plaintiffs’ claims were untimely and barred by the Government Claims Act and judgment was entered in favor of the City. Plaintiffs appealed.

The appellate court held that the trial court’s finding that Plaintiffs’ claims were untimely was supported by substantial facts. First, the court found that Plaintiffs’ claims had to be presented no later than one year after the accrual of the cause of action under Government Code section 911.2. Because the last invoice reflecting the tiered water rates was sent on July 23, 2014 and was due no later than August 19, 2014, the one-year period to submit a claim expired August 19, 2015. Thus, Plaintiffs’ September and December 2015 claims were untimely.

Second, the court held that the Plaintiffs had waived their equitable tolling argument because this argument was never raised in the trial court. Finally, the court held that the City had not waived the August 19, 2015 deadline because it allowed ratepayers to participate in the Refund Program until October 1, 2015. The court confirmed that there was no evidence that the City waived a known right, citing to the City Attorney’s advise to the City Council that while the claims would not normally be considered timely, staff recommended approval of certain claims if they sought a refund within the approved period and denial of the remainder. The appellate court agreed with the trial court’s finding that the City had not by word or action extended the one-year period to present a claim under the Government Code.

DANGEROUS CONDITION OF PUBLIC PROPERTY Tansavadti v. City of Palos Verdes (2021) 60 Cal.App.5th 423* *Note: The Supreme Court has granted review to this decision.

Summary: Design immunity does not per se bar a claim based on failure to warn of a dangerous condition.

Discussion: Plaintiff Betty Tansavatdi (“Plaintiff ”) brought a wrongful death lawsuit against the City of Rancho Palos Verdes (“City”) arising out of her son’s death as he was riding his bicycle on Hawthorne Boulevard and collided with a turning truck. She sued the city alleging a dangerous condition of public property under Government Code section 835 and failure to warn of that dangerous condition. In particular, she alleged that the absence of a bicycle lane at the site of the accident constituted a dangerous condition which caused her son’s death.

The City filed a motion for summary judgment alleging that design immunity codified at Government Code section 830.6 shielded it from liability for the absent bicycle lane. The trial court granted the City’s motion, concluding that the City had shown it was entitled to design immunity, but did not address the failure to warn theory. Plaintiff appealed.

On appeal, the appellate court affirmed that the City had shown that it was entitled to the defense of design immunity, but held that “design immunity does not, as a matter of law, preclude liability under a theory of failure to warn of a dangerous condition.” To support this, the court cited to Cameron v. State of California (1972) 7 Cal.3d 318 in which the Supreme Court held that a public entity may be liable for failure to warn of a concealed dangerous condition even if that dangerous condition was covered by design immunity. The appellate court remanded the case back to the trial court for consideration as to whether summary judgment is appropriate as to the failure to warn theory.

Page 17

City of Los Angeles v. Superior Court (Wong) (2021) 62 Cal.App.5th 129 Summary: Plaintiff cannot state a cause of action for dangerous condition of public property if her injuries do not arise from the use of the property at issue or any adjacent property. The City is immune from liability for decisions affecting public health under Government Code section 855.4.

Discussion: Plaintiff Barbara Wong (“Plaintiff ”) sued the City of Los Angeles (“City”) alleging that her husband, a police officer with the Los Angeles Police Department, contracted typhus from unsanitary conditions in and around the Central Community Police Station where he worked. Plaintiff alleges that she later contracted typhus as result of sharing living space with her husband. She sued the City alleging negligence and dangerous condition of public property under Government Code section 835.

The City demurred to the complaint alleging that Plaintiff had not had contact with the property at issue and contracted the virus at home, not directly from the allegedly dangerous property. It also asserted it was immune under Government Code section 855.4. The trial court overruled the City’s demurrer and the City filed a petition for writ of mandate.

On appeal, the appellate court found that the City could not be held liable under Government Code section 835 nor did it owe a duty to Plaintiff because she had not alleged exposure to any condition of the subject property.

The appellate court affirmed that the City had immunity under Government Code section 855.4, which provides, (a) “Neither a public entity nor a public employee is liable for an injury resulting from the decision to perform or not to perform any act to promote the public health of the community by preventing disease or controlling the communication of disease within the community if the decision whether the act was or was not to be performed was the result of the exercise of discretion vested in the public entity or the public employee, whether or not such discretion be abused” and (b) “Neither a public entity nor a public employee is liable for an injury caused by an act or omission in carrying out with due care a decision described in subdivision (a).” The court determined that the Plaintiff ’s allegations fell squarely within the immunity, and she did not alleged facts demonstrating that the immunity did not apply.

The appellate court then issued a peremptory writ of mandate directing the trial court to vacate its order overruling the demurrer and to enter a new order sustaining the demurrer.

DESIGN IMMUNITY Menges v. Department of Transportation (2020) 59 Cal.App.5th 13 By: Erica C. Gonzales and edited by Kimberly Y. Chin, Allen Glaessner Hazelwood & Werth, LLP Summary: Design immunity available when there is substantial evidence of the reasonableness of the design, even if contradicted by expert opinion.

Discussion: Plaintiff Kevyn Menges (“Plaintiff ”) suffered catastrophic injuries as a passenger in a motor vehicle accident. As Plaintiff ’s vehicle proceeded on a green light to make a left-hand turn from a city street onto the onramp to southbound Interstate 5, her vehicle was struck broadside by a driver exiting the Interstate at 55-60 mph.

Plaintiff sued the Department of Transportation (“Caltrans”), alleging negligent construction of its Interstate off-ramp. Plaintiff alleged a dangerous condition existed as a result of the “confusing” and “deceiving” pavement striping and signage on the Interstate off-ramp. Caltrans moved for summary judgment, asserting design immunity. The trial court granted Caltrans’s motion for summary judgment, holding substantial evidence existed in support of the reasonableness of the designs and that Plaintiff failed to establish the project was not built according to plans.

On appeal, Plaintiff asserted that the trial court erred because: (1) design immunity should not apply since the approved design plans were unreasonable, and (2) the construction of the interstate off-ramp did not match the previously approved design plans. In a split decision, the 4th District Court of Appeal held both arguments lacked merit, upholding the trial court decision.

Page 18

In reaching its decision, the Court focused on the third element a public entity must establish to claim design immunity: (1) a causal relationship between the plan or design and the accident; (2) discretionary approval of the plan or design prior to construction; and (3) substantial evidence supporting the reasonableness of the plan or design. As to the third element, “substantial evidence,” as explained by the Court of Appeal, is “evidence of solid value and which reasonably inspires confidence.” The Court affirmed longstanding precedent: “‘[A]s long as reasonable minds can differ concerning whether a design should have been approved, then the governmental entity must be granted immunity. The statute does not require that property be perfectly designed, only that it be given a design which is reasonable under the circumstances.’” Grenier v. City of Irwindale (1997) 57 Cal. App.4th 931, 941. The Court further noted that its role in evaluating the third element of the design immunity, even during summary judgment, is not to provide a de novo interpretation of the design, but instead to decide whether there is any substantial evidence supporting its reasonableness. Evidence may be found in the discretionary approval of the designs themselves, the expert opinion of a civil engineer, or evidence that the design or plan complies with prevailing professional standards. Moreover, a mere conflict in the testimony of expert witnesses provides no justification for the matter to go to a lay jury who will then second guess the judgment of skilled public officials.

Applying the above, the Court of Appeal rejected Plaintiff ’s first argument, concluding instead that Caltrans provided substantial evidence as to the reasonableness of the design through its expert opinion and evidence that the design complied with California’s approved standards. Specifically, Caltrans provided evidence demonstrating its civil engineer responsible for the engineering design work on the project and exercised his discretionary authority to approve the relevant pavement delineation and signage plans in advance of construction. The Court held this alone was sufficient to establish the third element of the design immunity.

Additionally, Caltrans’ expert reviewed the complaint, collision reports, photos, the applicable manual on traffic control, and conducted a site inspection to conclude that the improvements that were in place at the time of the accident were done with reasonable professional engineering judgment in design and construction and complied with approved standards. Plaintiff only offered her experts’ differing opinion, which alone is insufficient evidence to defeat the reasonableness of the design.

As to Plaintiff ’s second argument that the construction of the interstate off-ramp did not match the previously approved design plans, the Court held that “substantial conformance” with the design plans is all that is required in order to successfully invoke design immunity and that a minor deviation from the approved plan as designed will not preclude the application of design immunity. Since Plaintiff ’s experts failed to raise a triable issue of material fact that Caltrans did not substantially conform to the design plans, summary judgment was appropriate.

At bottom, the Court of Appeal held that the normal rules governing a motion for summary judgment, requiring its denial if any triable issue of fact appears, do not apply to cases involving design immunity under Government Code section 830.6 because the statute provides immunity when there is substantial evidence of reasonableness, even if contradicted.

EMPLOYMENT CASES AND A SCHOOLS CIVIL RIGHTS CASE

Summaries provided by Neal Meyers of Meyers Fozi & Dwork, LLP CIVIL RIGHTS Manahoy Area School District v. B.L., a Minor, et. al (2021) 141 S.Ct. 2038.

Summary: Public high school student brought an action against a school district, alleging that her suspension from junior varsity cheerleading squad based on her use of profanity (for example, “F*** school f*** softball f***cheer f*** everything”) in a social media post, made off-campus and on a Saturday, violated the First Amendment. While recognizing that schools have considerable freedom on campus to discipline students for conduct that the First Amendment might otherwise protect, the court held that the special characteristics that Page 19

give schools additional license to regulate student speech do not always disappear when a school regulates speech that takes place off-campus. In this case, the school violated the student’s First Amendment rights when it suspended her from the junior varsity cheerleading squad. The court held that when it comes to political or religious student speech that occurs outside school or a school program or activity, the school has a heavy burden under the First Amendment to justify intervention.

Discussion: This was a well-publicized case. While the court was able to find a “line” between protected ofcampus and on-campus speech in this case, it recognized that it would take some time, and much litigation, to fully develop the parameters between “off-campus” and “on-campus speech.” The court recognized this in its majority opinion, noting: We are uncertain as to the length or content of any such list of appropriate exceptions or carveouts…. [to the off-campus speech rule] …. Particularly given the advent of computer-based learning, we hesitate to determine precisely which of many school-related off-campus activities belong on such a list. Neither do we now know how such a list might vary, depending upon a student’s age, the nature of the school’s off-campus activity, or the impact upon the school itself. Thus, we do not now set forth a broad, highly general First Amendment rule stating just what counts as “off campus” speech and whether or how ordinary First Amendment standards must give way off campus to a school’s special need to prevent, e.g., substantial disruption of learning-related activities or the protection of those who make up a school community.”

PREVAILING WAGE Kaanaana v. Barrett Business Services Inc (2021) 11 Cal.5th 158.

Summary: Work done by workers hired through a temporary staffing agency for a “special district” can be considered a “public work” under Labor Code section 1720(a)(2), and the payment of prevailing wages is therefore required.

Discussion: The employees worked as belt-sorters, sorting trash and refuse for recycling that moved along conveyor belts in facilities owned and operated by the District. They were directly employed and supervised by a staffing agency, which was sued in a class-action lawsuit alleging it unlawfully failed to pay prevailing wages.

The trial court dismissed the prevailing wage claims because the sorting and other work performed by the staffing agency did not fall under the California Prevailing Wage Act. The Court of Appeal reversed the trial court, concluding that the belt sorting activities met the definition of “public works” under the prevailing wage law. The California Supreme Court affirmed the appellate court decision, holding that “public works,” as used in California’s prevailing wage law in guaranteeing a certain minimum wage to those employed on public works, had to be interpreted broadly as not limited only to workers employed in construction activities. In this case, the work was covered. The case also has implications of expanding prevailing wage requirements to “special districts” that previously may not have considered themselves subject to the law.

Busker v. Wabtec Corporation (2021) 2021 WL 3612126 (8/16/21) Summary: This California Supreme Court case involved two questions: (1) Does publicly funded work on rolling stock, like train cars, fall under the statutory definition of “public works”? (2) Alternatively, does the work on rolling stock, in this case, qualify as “public work” because it is integral to other activities that themselves qualifies as public work? The answer to both questions was no.

Mendoza v. Fonseca McElroy Grinding Co (2021) 2021 WL 3612745 Summary: The question here was whether the prevailing wage must be paid for the Contractor’s mobilization work, which involved transporting heavy machinery to and from a public works site. It was undisputed that the operation of the machinery at the site qualified as “public work.” However, plaintiffs argued that while transporting the equipment to the site, they were still “deemed to be employed upon public work” because their mobilization work was performed “in the execution” of a public works contract. The court held that this Page 20

“expansive interpretation” was unsupported by either the statutory language or legislative history.

Discussion: While the first case (Kaanaana) arguably expanded the pool of agencies subject to prevailing wages, the Supreme Court also sent a message in the last two decisions that efforts to expand the scope of prevailing wage law beyond its statutory limits will be highly scrutinized and likely will fail.

TAX TREATMENT OF EMPLOYMENT SETTLEMENTS Stassi v. Commissioner (T.C. Summ.Op 2021-5 (February 8, 2021).

Summary: The United States Tax Court found that the entire settlement amount in an employment dispute was not excludable from income as a personal physical injury because Plaintiff failed to demonstrate that her employer’s workplace caused her shingles. The entire settlement amount should have been allocated as lost wages, and it was taxable as a whole.

Discussion: Generally (and much simplified), in a settlement, personal and emotional distress injuries are not considered to be taxable income, but an economic loss is taxable. To enhance the settlement’s net value, it is not unusual for a plaintiff to try to allocate as much of the settlement as a non-taxable “pain and suffering” event.

Here, Plaintiff was diagnosed with shingles and had symptoms of shingles during her employment. Plaintiff sent a letter to a company board member complaining about the work environment. Although the letter contained several specific complaints, none included any complaints about physical injury or sickness. She subsequently retained an attorney who sent a demand letter alleging wage and hour violations, constructive termination, and emotional distress. The case was settled, and Plaintiff tried to allocate only a small portion of the settlement to economic damages. The tax court disagreed. This case is an excellent example of the subtle dynamics that can exist during settlement discissions and how the employer must be careful not to get ensnarled in the Plaintiff ’s tax avoidance strategies.

INDEPENDENT CONTRACTOR TEST Vazquez v. Jan-Pro Franchising Int’l, Inc. (2021) 10 Cal.5th 944.

Summary: In 2018, Dynamex v. Superior Court upended the rules defining an independent contractor vs. an employee under California wage law, instilling the “ABC test.” One open question was whether the rule applied retroactively, thus impacting employers before Dynamex was decided.

Discussion: The court held that Dynamex is retroactively applied because it did not consider its decision to be a significant change of existing law. Although significant, this decision impacts only a small subset of older claims.

EMPLOYEE DRUG TESTING Espindola v. Wismettac Asian Foods, Inc. (2021) 2021 WL 1947284 Summary: The District Court held that an employer could condition an offer of employment on passing a pre-employment drug screening, including a test for marijuana. The court further held that an employer is not obligated to engage in the interactive process before terminating an employee under such circumstances.

Discussion: The employer is a wholesaler and distributor of Asian food products. For a Vice-President position, the company offered Plaintiff a position subject to a pre-employment drug test. Plaintiff delayed his drug test to after the date his employment started. The day before Plaintiff began his employment, he completed a “Personnel Information Sheet,” indicating that he was not “disabled.” He never informed his prospective employer that he used marijuana. During onboarding, Plaintiff expressed his concern about the drug test, disclosing for the first time that he had “chronic back pain” and that he was “prescribed” and used marijuana to treat that condition.

However, Plaintiff did not provide any additional details or documentation (such as a doctor’s note or medical records) to substantiate the nature of his condition or explain any limitations on his ability to perform his job Page 21

duties. He then provided a medical marijuana card that he had obtained the day before. The employer still required the drug screen, and, not surprisingly, it tested positive for marijuana. Plaintiff was terminated for the stated reason that he failed the pre-employment drug test. He sued.

The company filed a summary judgment motion, which the court granted under this specific set of facts. First, the court found that Plaintiff has not demonstrated that his general claim of a “chronic back injury,” without more, qualified as a “disability” that limited a major life activity. Instead, Plaintiff had indicated on the Personnel Information Sheet that he did not have any disability, nor did he provide any explanation or detail concerning how his chronic back pain limited his ability to work. Also, importantly, the employer established that it had established a legitimate, nondiscriminatory reason for the Plaintiff ’s termination, which was not passing the drug screen. The court pointed out that employers are legally permitted to condition employment under California law upon completing a pre-employment drug screening. Where, as in this case, the employer had a uniform policy requiring employees to complete a pre-employment drug test as a condition of employment, the fact that the employee had notice of that condition, and coupled with the result of the test, the employer’s decision was determined to be legitimate.

DISABILITY DISCRIMINATION Brown v. Los Angeles Unified School District (2021) 60 Cal. App. 5th 1092.

Summary: Following activation of the new wi-fi system, Plaintiff began to experience chronic pain, headaches, nausea, itching, burning sensations on her skin, ear issues, shortness of breath, inflammation, heart palpitations, respiratory complications, foggy-headedness, and fatigue. She reported the symptoms to her superiors and was granted leave from work “due to these symptoms, on an intermittent basis, for several days thereafter.”

She returned to campus the following week and fell ill again “[w]ithin 2 to 3 hours.” Her medical provider subsequently diagnosed her with electromagnetic hypersensitivity (EHS), also referred to as “microwave sickness.” The District attempted to accommodate by hardwiring her classroom. Plaintiff demanded the use of paints and other forms of shielding materials to block the wi-fi and radio frequencies in the classroom. District testing concluded that the classroom was “safe” and denied her further accommodation request. Plaintiff alleged she could not return to work “without being overcome with crippling pain.” She was “forced to go out on a disability leave from her job, which exhausted her approximately 800 hours of accrued paid time off and sick leave.” As a result, she experienced “an economic loss of earnings due to not receiving her full income.” She sued.

The District demurred, arguing that it “went above and beyond to accommodate” Plaintiff ’s alleged disability and provided examples of accommodations. The trial court sustained the demurrer and dismissed the case. The appellate court reversed as to some of the causes of action and reinstated the case.

Discussion: It is important to keep in mind that this decision was at the demurrer stage where the court is required to accept as true all material facts properly pleaded in the complaint. At this early stage, the question of a plaintiff ’s ability to prove the allegations or the possible difficulty in making such proof is not the issue.

Here, LAUSD cited out-of-state cases holding that electromagnetic sensitivity is not a “recognized” disability.

However, the court distinguished those cases since they were not based on the California FEHA statutes, where the definition of an actual or perceived disability is more expansive.

EXHAUSTION OF ADMINISTRATIVE REMEDIES Briley v. City of West Covina (2021) 66 Cal.App.5th 119 Summary: A possible defense to an employment-related case involving a public agency is that the Plaintiff failed to exhaust their internal administrative remedies before filing suit. Here, the City argued that a deputy fire marshal’s retaliation lawsuit arising from safety issues and misconduct complaints should be dismissed because Plaintiff abandoned his appeal to City’s Human Resources Commission before filing suit. The appellate court agreed with Plaintiff that the commission had no authority to consider Briley’s retaliation claim and that his Page 22

appeal would have been futile because the hearing officers were embroiled in the underlying dispute (due process problem).

Discussion: The failure to exhaust administrative remedies doctrine is a powerful defense when available. Here, it failed because of the commission’s limited jurisdiction and the implicit bias of the decision-makers. In all applicable cases, the agency should give Plaintiff the available administrative forum with unbiased decisionmakers. If Plaintiff fails to proceed, a strong defense exists. If the matter does proceed, sometimes it can resolve a dispute rather than litigating. On that note, the case proceeded to trial, and the jury found for Plaintiff and awarded him about $4 million, including $2 million in past noneconomic damages and $1.5 million in future noneconomic damages. On appeal, the court reduced the awards to $1 million and $100,000, respectively, so at least there was some “win” for the City on appeal.

DISCRIMINATION & HARASSMENT AGAINST A NON-EMPLOYER COMPANY Smith v. BP Lubricants USA Inc. (2021) 64 Cal.App.5th 138 Summary: Plaintiff ’s employer, Jiffy Lube, held a presentation for its employees to learn about a new Castrol product. A Castrol employee led the presentation. Plaintiff, African American, alleges that Castrol’s presenter made several comments to Plaintiff during the presentation that he considered racist and offensive. Plaintiff sued Castrol (BP) for harassment under FEHA and discrimination under the Unruh Act. He also personally sued the presenter for intentional infliction of emotional distress (IIED). The trial court sustained BP and the presenter’s demurrer without leave to amend, and Plaintiff appealed. The appellate court reversed, holding that Plaintiff sufficiently alleged claims for IIED against the presenter and violation of the Unruh Act against Castrol.

Discussion: This is an excellent case illustrating that what some people think is a good laugh, is not. The comments alleged were demeaning and inappropriate, even at a Jiffy Lube. The most significant takeaway from the case was the court’s willingness to support a direct claim of IIED against the individual presenter. The court held that a rational juror could find the presenter’s conduct was extreme and outrageous based on the allegations.

Plaintiff alleged that the presenter made three offensive comments to him in front of about 50 of his colleagues, including three of his supervisors. As alleged, after the presenter made the first comment, everyone except for African American employees laughed, yet the presenter made two more comments that Plaintiff found offensive.

It likely was the succession of offensive comments that kept the claim alive. There is concern that this case could spawn more individual claims, which also raises coverage and conflict issues.

INTERACTIVE PROCESS & ACCOMMODATION Shirvanyan v. Los Angeles Community. College District (2020) 59 Cal. App.5th 82.

Summary: This appeal came following a jury verdict in favor of Plaintiff. The claims were based on the District’s alleged failure to provide reasonable accommodations for and/or engage in an interactive process to identify reasonable accommodations for two injuries, each of which was sufficient to render the Plaintiff disabled for the purposes of FEHA. The District argued at trial that a necessary element of a FEHA interactive process claim is the availability of a reasonable accommodation when the interactive process occurs. Otherwise, the process is futile. The trial court erroneously rejected this argument. On appeal, the appellate court agreed with the District that to engage in the interactive process, Plaintiff must show that an available reasonable accommodation existed at the time and ordered a retrial.

Discussion: This case provided much needed clarity that the requirement to engage in an interactive process only exists if a reasonable accommodation is available. Otherwise, the entire effort is unnecessary and futile.

Here, since the jury did not have the opportunity to find whether a reasonable accommodation existed, judgment was reversed.

Page 23