In spite of documentation of independent contractor relationship, Auto Club may be liable for acts of road service technician based on agency.

Auto Club.jpgWhen I read this opinion, my first thought was "Oh, oh, there goes my AAA membership fee." An increase in my annual fee may not necessarily occur. But the California Court of Appeal, Second Appellate District (Division Two) opinion in Monarrez v. Automobile Club of Southern California (filed November 20, 2012) 2012 DJDAR 15745, will likely cause some changes in how Auto Club and similar roadside service agencies operate.

Plaintiff, an Auto Club member, suffered catastrophic injuries when he was struck by a hit-and-run driver while receiving roadside assistance for a flat tire. Auto Club had dispatched a road assistance technician employed by one of its contracting companies who agreed to respond to road service calls made to Auto Club from its members. Auto Club vetted these companies before contracting with them, and this particular company had been an Auto Club contractor for more than 20 years; 85 to 90 percent of the company's business was with the Club. Auto Club provided service guidelines, a training manual and seminars, and monitored performance. The Club visited provider companies two to three times a month. This company's agreement, like others, promised to act in a "safe" manner in guaranteeing the provision of proficient service.

In particular, technicians are instructed in the training manual to minimize a member's time standing on the traffic side of the disabled vehicle and, on a tow, to promptly get the member into the tow truck. This technician understood the member's safety was the top priority, but admitted he failed to explain to plaintiff the danger of standing on the freeway. In this instance, the technician advised plaintiff the technician needed to move the disabled vehicle by towing it to a safer location in order to change the tire. He asked him to get into the tow truck, but proceeded first to load the vehicle onto the tow truck realizing plaintiff had not yet gotten into the truck. When he completed loading the vehicle, he observed plaintiff, who had been out of his view during this process, had been struck be a motorist.

The trial court granted the Auto Club's motion for summary judgment finding the agreement between Auto Club and the provider company expressly defined the service provider as an independent contractor with Auto Club, which had no control over the manner of performance by the roadside service. On plaintiff's appeal, the appellate court reversed, determining that the issue of actual or ostensible agency cannot be decided as a matter of law from the submitted evidence. From this evidence, stated the court, it could not conclude that Auto Club had no right of control over the manner and means by which its technicians accomplish their work. In addition to the control the Club exercised in this relationship, there were practical facts that could lead a jury to find ostensible agency, such as the technician's uniform and vehicle bearing the Auto Club logo. (See Civil Code section 2300.) Because there were triable issues of fact regarding agency, the summary judgment was reversed.

This opinion should cause some concern to parties who might feel they are insulated from potential liability for the acts of a party expressly labeled as an "independent contractor." They must always be concerned as to whether their conduct infers the relationship is more that of ostensible agency.

"Lost profits" expert evidence concerning projected upstart dental implant manufacturer too speculative.

November 30, 2012

Lost Profit.jpgThe California Supreme Court in Sargon Enterprises, Inc. v. University of Southern California (filed November 26, 2012, S191550) starts its reasoning concerning a trial court's discretion in excluding expert testimony with the following advice of Federal Judge Friendly written 50 years ago: "[A court] must be exceeding careful not to set the threshold too high. Yet it is the jury system itself that requires the common law judge in his efforts to prevent the jury from being satisfied by matters of slight value, capable of being exaggerated by prejudice and hasty reasoning . . . to exclude matter which does not rise to a clearly sufficient degree of value; something more than a minimum probative value is required."

The case before the state high court involved plaintiff, a small dental implant company which sued defendant for breach of contract; the plaintiff succeeded at jury trial in proving that defendant had breached its promise to conduct and report on a five-year clinical study of plaintiff's patented and government-approved one-step dental implant. The critical question, presented in an earlier motion in limine, was damages. Plaintiff proffered the testimony of an accountant expert that plaintiff's lost profits over a five-year period ranged from $200 million to over $1 billion. At the initial trial, the court excluded this testimony, and based upon other evidence, the jury awarded $433,000. Plaintiff appealed and the Court of Appeal, Second District, court ruled the trial court improperly focused on forseeability.

On remand, defendant again moved to exclude the expert testimony. After an extensive evidentiary hearing, the trial court again granted the motion to exclude, finding no factual basis for the expert's assumption that, had defendant studied and reported on plaintiff's innovative product, plaintiff would have had the marketing success and profits in the range of the top six dental implant manufacturers worldwide, which each at minimum did approximately 50 times the business that plaintiff did. The Court of Appeal again reversed; this time the Supreme Court granted review.

Continue reading ""Lost profits" expert evidence concerning projected upstart dental implant manufacturer too speculative." »

Tort damages concerning domestic pets are not limited by market value.

November 19, 2012

domestic pets.jpg"[A]nimals are special, sentient beings, because unlike other forms of property, animals feel pain, suffer and die." With words like these, the California Court of Appeal, Second Appellate District, Division One, rejected defendants argument, an argument accepted by the trial courts, that the measure of damages are limited to the market value of the injured dogs in Martinez v. Robledo (filed October 23, 2012) 2012 DJDAR 14708.

This opinion involved consolidated matters: (1) In Martinez v. Robledo, defendant shot his next door neighbor's (Plaintiff's) dog (Gunner, a two-year-old German Shepherd), causing the amputation of Gunner's right leg; plaintiff seeks recovery of the vertinary bills of $20,789.81 plus punitive damages. (2) In Workman v. Klause, plaintiff's 9-year-old Golden Retriever, Katie, received surgery from defendant veterinarian at a cost of $4,836.16; Katie's intestine was nicked during the surgery and a piece of surgical gauze was left in her body causing an infection; plaintiff's incurred emergency bills elsewhere in the sum of $37,766.06 in order to save Katie's life; plaintiff sued for this later sum, defendant having already refunded to plaintiff monies for his professional charges.

In both cases, defendants were granted motions in limine, limiting the matters that would be admissible to prove damages, and the trial courts ruled that the measure of damages would be limited to the fair market value of the dogs. Plaintiffs appealed each of their cases (in which their damage recovery was $1,000 fair market value) claiming pets are and should be treated fundamentally more significant than mere personal property, relying upon the First Appellate District case of Kimes v. Grosser (2011) 195 Cal.App.4th 1556. (A discussion of that appellate ruling concerning injuries to pet cat "Pumpkin," including potential punitive damages, appears in the June 16, 2011 blog.) As alluded to above, the Second Appellate District panel here agreed with both plaintiffs and the Kimes opinion.

Two things seem apparent from these opinions. First, veterinarians may find their malpractice premiums rising significantly. Second, appellate justices appear to be more attached to their household critters than the trial judges who rendered the trial court rulings.

Arbitration covenant that runs with the land binds homeowners and their association even though neither was a direct party to the covenant

November 13, 2012

Supreme Court.jpgOne of the earlier blog articles that I wrote on this site commented on the trend of California appellate cases questioning the fairness of arbitration clauses that often left the non-drafting party without any bargaining power. While many of these situations arise in the context of disadvantaged consumers and employees directly contracting with the drafting party, the circumstance stated in my February 7, 2011 blog concerned homeowners and homeowners associations. As was stated in the opinion which was the subject of that blog, Villa Vicenza Homeowners Association v. Nobel Court Development LLC 185 Cal.App.4th 23 (2011), in spite of the provisions of California Civil Code section 1354 generally providing that recorded covenants in deeds are enforceable as equitable servitudes binding future property owners, that court resorted to the exception: "unless unreasonable." I questioned whether there was a substantial enough basis establishing unreasonableness in that homeowners had record notice of these covenants; they could simply choose not to buy these homes realizing that claims against the developer would require arbitration, waiving the right to a public trial.

The Villa Vicenza published opinion and others like it had a short "shelf-life." They were granted review by the California Supreme Court. And just this past month that case name appeared again in the published body of law, this time in a minute order of the Supreme Court stating the grant of review was vacated and the matter was remanded to the Court of Appeal to decide the matter in light of the Supreme Court's recent opinion in Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US) LLC (2012) 55 Cal.4th 223.

In Pinnacle, a homeowners association sued a condominium developer for construction defect, seeking damage to its property and damage to the separate interests of the condominium owners who compose its membership. The developer filed a motion to compel arbitration, based on a clause in the recorded declaration of covenants, conditions, and restrictions providing that the association and the individual owners agree to resolve any construction dispute with the developer through binding arbitration in accordance with the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.).

The Supreme Court granted review to determine whether the arbitration clause is binding on the association, and if so, whether it must be invalidated as unconscionable. The high court determined that, even though the association did not exist as an entity independent of the developer when the declaration was drafted and recorded, it is settled under the statutory and decisional law pertaining to common interest developments that the covenants and terms in the recorded declaration reflect written promises and agreements that are subject to enforcement against the association. The court concluded that the arbitration clause binds the association and is not unconscionable


The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients, clients or otherwise, should act or refrain from acting on the basis of any content included in this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this blog contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this blog.

"Completed and accepted" doctrine absolves architect of liability for college theatre stairway fall.

College.jpgIn Neiman v. Leo A. Daly Company, (filed October 30, 2012) B234537, plaintiff fell on stairs at the theater of Santa Monica Community College. She claimed she sustained injuries due to poor lighting and improper marked stairs at the main stage. She sued defendant, the architect who designed the theater and observed its construction. Defendant moved for summary judgment, theorizing that once a contractor completes its work and the owner accepts it, the contractor is not liable to third parties as a result of a patent defect in the work. This is known as the "completed and accepted" doctrine. Plaintiff countered there was a triable issue of material fact as to whether the defect--lack of marking stripes on the stairs--was patent or latent. Also, she claimed the project was not completed. The trial court granted the motion dismissing the matter as against defendant architect, and the Court of Appeal, Second Appellate District, Division One, affirmed.

The negligence alleged here did not concern preparation of the plans and specifications for the building. Rather, plaintiff claimed defendant was negligent in failing to notify the owner school district and project general contractor that the contrast marks required by the state building code were never placed on the stairs. She does not dispute that the absence of the marks is "obvious and apparent;" rather the patent defect here was the patency of the danger, not merely the exterior visibility. She argues the danger here was not apparent.

It was undisputed the plans and specifications called for the stripes on the stairs; but any noncompliance did not mean the work was incomplete. The appellate court determined that the work in question was deemed completed by the school district approximately 2 years before plaintiff's fall, and in use long before this accident. There was no evidence that the school district did not have access to those plans and thus had accepted the building's condition as it was. There was no hidden or concealed defect, which is the general criterion for determining latency. Thus the appellate court concluded the alleged defect was patent as a matter of law, giving defendant a complete affirmative defense to the claim.

In my view, this opinion should not be construed as giving carte blanche to a contractor to ignore building codes and plans and specifications. There certainly can be other consequences for such failure. Rather, the policy behind the completed-and-accepted doctrine is that the risk of liability for injury to third parties, under proper circumstances of completion and acceptance, must pass from the contractor to the owner, except for hidden or concealed defects.


The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients, clients or otherwise, should act or refrain from acting on the basis of any content included in this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this blog contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this blog.

"A motivating reason" properly instructs jurors on the basis to find job termination was discriminatory; "invited error" precludes attack on attorney's fee award.

job termination.jpgPlaintiff Lorena Alamos was terminated from her position of collection clerk with defendant Practice Management Information Corporation. She took 8 weeks off from her job for pregnancy/maternity leave. She came to the workplace about one week prior to her agreed date of return to have lunch with a friend. While there, she got into an argument with the person who was temporarily replacing her. She was terminated the day she returned to work. The initial reason stated for her termination by her supervisor, Cuevas, was Cuevas discovered during her leave that she had gotten behind on some accounts. Cuevas later testified this job performance issue alone was not serious enough to justify termination; that her visit to the office was an additional reason. Both she and the executives who eventually approved of the termination claimed her pregnancy or maternity leave was not in any way a reason for her termination.

At trial of the lawsuit brought by plaintiff, the jury was instructed that an element of plaintiff's proof was to prove her maternity leave was "a motivation reason" for her discharge. Defendant requested a "mixed motive" instruction to the effect that the employer is not liable if it proved that, among the reasons for terminating plaintiff, there was a legitimate reason, standing alone, that would have caused the same decision. The trial judge refused the defense's requested instruction. The jury proceeded to render a general verdict in favor of plaintiff and awarded her $10,000. The trial judge additionally awarded Fair Employment and Housing Act (FEHA) prevailing plaintiff attorney's fees in the amount of $50,858.

Defendant appealed. In Alamos v. Practice Management Information Corp. (filed 9/24/12, pub. ordered 10/18/12) 2012 DJDAR 14480, the Court of Appeal, Second Appellate District, Division Seven, affirmed.

Defendant's first assertion on appeal was that the trial court prejudicially erred in failing to properly instruct the jury on the standard of causation in a FEHA claim. It criticizes the CACI instructions on "a motivating reason," saying that instead the BAJI instructions concerning motives would properly set forth a defendant's mixed motive defense that the same termination decision would have been made in the absence of the discriminatory motive. The appellate court noted that this issue is currently pending before the California Supreme Court in Harris v. City of Santa Monica. However, the high court's dicta in other cases strongly suggests that "a motivating reason" is the proper causation standard. As the court stated in Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 358: "[T]he ultimate issue is simply whether the employer acted with a motive to discriminate illegally."

Continue reading ""A motivating reason" properly instructs jurors on the basis to find job termination was discriminatory; "invited error" precludes attack on attorney's fee award. " »

Former human resource director's deceiving employer she had executed arbitration agreement neither implies agreement nor estops her from denying.

dec.jpgIn Gorlach v. The Sports Club Company. B233672 (filed October 16, 2012), the Court of Appeal, Second Appellate District, Division Four, affirmed the trial court's denying defendant's motion to compel arbitration. While the defendant conceded that plaintiff never signed a written contract to arbitrate, defendant claimed equitable estoppel or implied-in-fact agreement.

Plaintiff Susan Gorlach resigned as defendant's human resource director in August 2010. Prior to 2010, defendant had no arbitration agreement with its employees. It then revised its employee handbook to contain such an agreement and tasked plaintiff to get all employees to sign. Through July 2010, not all employees had signed, prompting plaintiff to write company executives to consider what to do about employees who failed to sign. She led executives to believe she had signed, when in fact she had not. She resigned August 6, 2010, and later sued defendant for constructive termination including a cause of action claiming paramour sexual harassment.

Defendant Sports Club moved to compel arbitration contending plaintiff assented to it by her continued employment, yet acknowledging that she had not executed the arbitration agreement. The trial court found that, while plaintiff "intentionally misled" defendant to believe she was "on board" with the new agreement, she never planned on signing it, thus there was no basis to find that an agreement to arbitrate existed between the parties.

Continue reading "Former human resource director's deceiving employer she had executed arbitration agreement neither implies agreement nor estops her from denying. " »

Discharge of employee in violation of statutory prohibition of firing for filing work-comp claim cannot form basis for common law civil action based on public policy.

Thumbnail image for work-comp claim.jpgDutra v. Mercy Medical Center Mt. Shasta (filed September 26, 2012) 2012 DJDAR 13447, plaintiff Dutra claimed defendant wrongfully terminated her employment in violation of public policy codified in California Labor Code section 132a, which generally prohibits discharge of an employee for filing a workers'compensation claim. After jury selection, the trial court granted defendant's motion to dismiss the claim because the Workers' Compensation Appeal Board (WCAB) had exclusive jurisdiction to adjudicate the claim; plaintiff declined the court's offer allowing amendment of her complaint. The Court of Appeal, Third Appellate District, affirmed.

The appellate court rejected plaintiff's legal argument that the California Supreme Court, in City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143, provided that a plaintiff could pursue common law remedies as an alternative to the Labor Code's vesting of jurisdiction in the WCAB. As the court put it, "City of Moorpark does not go as far as plaintiff suggests. " While the high court did say a plaintiff is not precluded from pursuing remedies under FEHA statutory provisions and common law wrongful termination, the other half of the analysis in that case was to decide whether a violation of FEHA could serve as a basis for a claim of wrongful termination in violation of public policy. On this point, the Supreme Court wrote that when a statute stating a public policy also includes certain substantive limitations in scope and remedy, these limitations also circumscribe the common law cause of action.

Here, Section 132a has the limitation of establishing a specific procedure and forum for addressing a violation with limited remedies. A claim in common law tort bootstrapping a violation of this statute would give a broader remedy than the statute allows. To the extent that this plaintiff claims the wrong committed against her fell outside of the "compensation bargain," she could have alleged different causes of actions which she chose not to.

I see three important lessons that are suggested by this opinion. First, if you seek a common law remedy, do not try to infuse it with a statutory theory of recovery that is limited in scope, and may end up getting the cause of action dismissed. Second, never give short shrift to a trial court's invitation to amend your complaint. And third, more generally, if you wish to quote from a case opinion, make sure you have the proper context.

The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients, clients or otherwise, should act or refrain from acting on the basis of any content included in this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this blog contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this blog.

"Shall" is not always mandatory language; LA County not required to capture pit bulls because whether "hazard" is discretionary decision under immunity statute

Beware.pngCalifornia Government Code section 815.6 exempts a public entity from immunity if it has failed to discharge a statutory "mandatory duty" designed to protect from injury. Los Angeles County Code (LACC section 10.12.090C states that the county animal care and control department "shall capture and take into custody . . . [a]ny animal being kept or maintained contrary to [LACC sect. 10.40.010W]." That section states, "No animal shall be allowed to constitute a hazard or be a menace to the health, peace or safety of the community."

In County of Los Angeles v. Superior Court (Faten) (filed September 5, 2012, certified for publication on Sept. 20) 2012 DJDAR 13264, minor Kameron Faten and his two bothers were walking home from school when two pit bulls jumped over the fence of John Boles' residence and viciously attacked Kameron. The boys' parents sued on their behalf for personal injury and emotional distress, naming Bowles, his landlord and the County of Los Angeles.

The County moved for summary judgment in the Superior Court, claiming the above-cited portions of the county ordinance were merely discretionary or permissive, thus it was immune and owed no duty.

The evidence reflected that on one occasion, a pit bull running loose in the neighborhood was seized and eventually euthanized, but not identified with any residence or owner. The County had received 9 previous telephone calls about the many pit bulls that had been at the Bowles' residence during the past two-and-a-half years before the attack on Cameron. Pit bulls at the residence were reported to have jumped the fence, to have run loose and chase people. However, County animal control officer were unable to find any dogs of the Boles to be running loose. Officers had gone to the residence and posted notices, finding no responsible person home except on one occasion. The one time contact was made with a member of the Boles family occurred three months before the Faten incident when an identified neighbor reported that two pit bulls had jumped the Boles' fence and killed two of her goats in her yard. Officers gave written notice at that time that the Boles could keep no more than 3 dogs.

Continue reading ""Shall" is not always mandatory language; LA County not required to capture pit bulls because whether "hazard" is discretionary decision under immunity statute " »

Triable issues of lender fraud requires reversal of summary adjudication of claims for damages caused by foreclosure

September 27, 2012

Foreclosure.jpgThe general history of the instant foreclosure is all too familiar. Home loan borrower starts with a low adjustable rate loan based on now-bygone high home values. The interest adjusts in a few years to more than twice the original rate, more than doubling the homeowners' payment on a home that now is substantially "underwater" due to decreased home values. Eventually, the lender itself goes under and is replaced by a successor.

In Ragland v. U.S. Bank National Association, Inc. (filed September 11, 2012) 2012 DJDAR 12769, we have the added facts that the borrower, Pam Ragland, had remained current on her mortgage obligation up to April 2008, when she spoke about loan modification to a lender representative who told her she would have to get "behind" on her loan in order to modify the loan. Additionally, Ragland had executed her note after complaining that her signature had been forged on other loan documents (confirmed by a handwriting expert). She thought this part of her loan history justified her request to have the lender waive the normal modification fee. The rep said he would get back to her. As she was not certain she wanted to miss her loan payment and apply for a modification without further assurances and she did not hear back at the time for her to make her April 2008 payment without incurring a late charge, she called the rep again. He referred her to his supervisor who stated that if any documents in her loan packet had been forged, she may not be responsible for anything in her loan. She was advised not to pay anything while the legal department investigated.

By late April 2008, Ragland received a delinquency notice from the lender. She immediately called and was advised by two separate reps not to worry because collection activity was frozen. Still nervous about all of this, she attempted to transmit a loan payment, which was refused by the lender. On May 5, 2008 she received a notice of foreclosure. Yet another call to the lender was responded to: legal department will get back to you. Predictably, she did not hear back and instead was greeted by another letter in early July 2008 that advised foreclosure was under way. She again got the "runaround," being told her situation was not properly flagged with legal and the foreclosure would be on hold. She again tried to make mortgage payments, three in this instance, which were again rejected. The foreclosure went forward and she filed her lawsuit.

Continue reading "Triable issues of lender fraud requires reversal of summary adjudication of claims for damages caused by foreclosure " »

Doctrine of boundary by agreement: good fences don't make good neighbors absent an agreement.

September 17, 2012

fences.jpgWith apologies to Robert Frost and his poem "Mending Wall," there might be a circumstance when a good fence does make a good neighbor: that is where the fence marks an agreed-upon boundary between two neighbors. In Martin v. Van Bergen (filed September 6, 2012) 2012 DJDAR 12577, the Van Bergens contended the fence that had been built between the Van Bergens' property and that of the Martins defined the boundary between the two properties because their predecessors who owned the two properties when the fence was built created a "boundary by agreement." The Court of Appeal, Second Appellate District, Division Six, recognized this doctrine, but found one all too obvious element missing in the Van Bergen's proof: an agreement. It affirmed the quiet title judgment in accordance with the Martins' survey of the true boundary.

The Martins own a 240-acre parcel in Paso Robles that include their residence and a vineyard. The Van Bergens own a contiguous property consisting of their residence and an almond orchard. A fence runs over Martin's parcel for a portion of the 1300 feet parallel to the boundary. The area between the boundary and the fence has almond trees farmed by the Van Bergens, encroaching on the Martin parcel. The almond orchard was planted in 1947; the Van Bergens' predecessor-in-interest was assisted by Martin's predecessor, who possessed some survey equipment, in the planting. No one recalls any survey equipment actually being used; the "deer" fence constructed at that time marked the extent of almond trees simply replacing and matching the location of an old fence used to contain cattle.

In 2005, upon acquiring their property, the Martins had professional surveyors perform a survey for them. The survey established the boundary as showing the Van Bergen orchard and fence encroached on the Martins' property. The boundary indicated that 8 to 10% of the Van Bergens' almond crop was being grown on the Martins, property. The Van Bergens sold only about 25% of their crop commercially. The Van Bergens also had a professional survey performed which showed the boundary line to be different than both the fence line and the Martins' survey.

Continue reading "Doctrine of boundary by agreement: good fences don't make good neighbors absent an agreement." »

Release rule gives way to set-off-with-contribution absent finding settling tortfeasor's policy-limit-payment was a good-faith settlement

September 12, 2012

policy-limit-payment.jpgIn Leung v. Verdugo Hills Hospital (filed August 23, 2012) 2012 DJDAR 11705, the California Supreme Court tackled what it saw as an inequitable result to personal-injury plaintiffs and repudiated the common law release rule.

Plaintiff minor suffered irreversible brain injury shortly after birth. Through his guardian mother, he settled his claim for damages with his pediatrician for that defendant's malpractice insurance policy limit of $1 million. The trial court refused to grant these parties' request for an order that the settlement was in good faith. Nonetheless, plaintiff stood by the settlement and proceeded to trial against the remaining defendant, the hospital. A jury found both defendants negligent, assessing approximately $15.504 million in damages. The jury apportioned fault as 55% as to the pediatrician, 40% as to the hospital, and 5% as to the minor's parents. The defendants' portion of fault left them liable for approximately $14.729 million.

The Court of Appeal felt duty-bound to follow the common law release rule which would relieve the nonsettling hospital from any liability for plaintiffs economic damages (the above total damages less the $250,000 MICRA-limited non-economic damages) because plaintiff's settlement with, and release of liability against, the joint torfeasor pediatrician also released the non-settling hospital. This is where the Supreme Court stepped in to unanimously repudiate the common law release rule.

The state high court determined that basic tort principles support the court's adoption of the "setoff-with-contribution" rule. The court's opinion states that this does not change the respective positions of the parties and is fully consistent with both comparative fault and joint and several liability.

Continue reading "Release rule gives way to set-off-with-contribution absent finding settling tortfeasor's policy-limit-payment was a good-faith settlement" »

Don't trust article headnotes: Class arbitration required only on contractual principles.

September 5, 2012

Headlines.jpgI hope those of you reading this blog, or any other blog or case commentary, choose to read the discussed opinion rather than rely on the headnote or summary found in the commentary. Recently I came across the following headnote: "Gentry v. Superior Court, which permits invalidation of class action arbitration waivers, remains viable despite AT&T Mobility LLC v. Concepcion." The case opinion referred to is Truly Nolen of America v. Superior Court (certified for publication on August 13, 2012) 2012 DJDAR 11207.

If you think from this heading that you will find that the opinion discusses and supports the application of the Gentry analysis that policy considerations supporting class arbitration will rule the day over the applicable contract, you will find that you have been seriously misled. While the California Court of Appeal, Fourth Appellate District, Division One, does say that California Supreme Court case of Gentry has not been expressly overruled, it goes on to say that the U.S. Supreme Court's reasoning in Concepcion strongly suggests Gentry is toast (my term, not theirs). The appellate court states, "[T]o the extent the Gentry decision would permit such a generalized showing to negate the parties' contractual intentions, that conclusion is no longer valid after the Concepcion and Stolt-Nielsen decisions." (See previous blog of June 19, 2012.)

The appellate court found in Truly Nolen that, in any event, the trial court erred in requiring class arbitration; that even if the Gentry factors still apply, they were not established in this case. It remanded the matter to the trial court in issuing writ of mandate in favor of petitioner Truly Nolen. The trial court was instructed to determine whether there is a contractual basis for finding the parties mutually agreed to class arbitration. Thus the actual holding of the case left little doubt that it was applying the principles found in Concepcion rather the Gentry factors.

The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients, clients or otherwise, should act or refrain from acting on the basis of any content included in this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this blog contains general information and may not reflect current legal developments, verdicts or settlements. The Firm expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this blog.

Writ granted: producers of Desperate Housewives granted directed verdict on actress's wrongful termination claim.

In Touchstone Television Productions v. Superior Court (B241137, filed August 16, 2012), petitioner Touchstone had an agreement with actress Nicollette Sheridan for the first season of the television series Desperate Housewives in which Touchstone had the exclusive option to renew Sheridan's services on an annual basis for an additional six seasons. During Season 5, Touchstone informed Sheridan it would not renew her contract for Season 6, while paying her for the entirety of Season 5. Sheridan sued for wrongful termination in violation of public policy, alleging that she was "fired" because she had complained about a battery committed against her by the series' creator Mark Cherry. A jury deadlocked on this claim resulting in a mistrial. Touchstone's motion for a directed verdict was denied by the trial court, and Touchstone petitioned the Court of Appeal for extraordinary relief.

The Court of Appeal, Second Appellate District, Division Four, stayed the pending retrial, issue an alternative writ of mandate, and, after receiving briefing and oral argument, concluded the trial court erred in denying Touchstone's motion for directed verdict. The court was convinced there was clear legal precedent on the merits: "A cause of action for wrongful termination in violation of public policy does not lie if an employer decides simply not to exercise an option to renew a contract. In that instance, there is no termination of employment, but, instead, an expiration of a fixed term contract. (Daly v. Exxon Corp. (1997) 55 Cal.App.4th 39.)"

The appellate court, however, rather than ordering the entire action dismissed, sent the matter to the trial court to allow Sheridan to file an amended complaint alleging a cause of action under California Labor Code section 6310 that Touchstone retaliated against her for complaining about unsafe working conditions (in the form of Cherry's conduct) by deciding not to exercise its option to renew her contract. The court noted that, after this petition was filed, Sheridan had moved the trial court to allow her to amend her complaint to add the Section 6310 claim; the trial court had denied that motion.

Continue reading "Writ granted: producers of Desperate Housewives granted directed verdict on actress's wrongful termination claim." »

Real Estate Recovery Program provides recovery for broker's fiduciary breach if factual findings supporting judgment state conduct constituting deliberate fraud

real estate broker.jpgCalifornia Business & Profession Code section 10471 is a "remedial statute intended to protect the public from loss resulting from unsatisfied damage awards against licensed real estate personnel." (Doyle v. Department of Real Estate (1994) 30 Cal.App.4th 893.) It is punitive in the sense that an agent's license is immediately suspended if the state pays from the fund and that license will not be reinstated until the payment is paid back in full. It is limited in that it only applies to an unsatisfied judgment for intentional fraud.

In Worthington v. Davi (G045537, filed August 7, 2012), plaintiffs arbitrated three transactions claiming breach of fiduciary duty and one transaction claiming fraud committed by their real estate broker and others, and received a total award of $280,000. The award was confirmed in a judgment which went unpaid. Plaintiffs applied to the state's Real Estate Commissioner for recovery from the 10471 recovery fund. The Commissioner allowed recovery of $50,000, allowing recovery only on the "fraud" transaction, and disallowing the other three.

Plaintiffs applied to the trial court for an order directing payment of the judgment from the recovery fund as to the remaining three transactions. The trial court ordered payment on two of these three. On these three transactions, the arbitrator did not expressly state the award was for "fraud." The trial court found that in two of these transactions, there was a breach of fiduciary duty resulting from fraudulent transactions. However the remaining fiduciary transaction involved no sufficient stated showing of fraud. Both sides appealed.

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