Justia California Court of Appeals Opinion SummariesArticles Posted in Business Law
Moofly Productions, LLC v. Favila
The Court of Appeal affirmed the superior court's judgment in favor of the Estate, in a lawsuit brought by Moofly for actions the Estate took when attempting to collect on a judgment in a previous, related case. The Estate filed a cross-complaint, accusing Moofly and its owner of fraudulent transfers and other causes of action. The court held that Moofly was not entitled to a jury trial because the Estate's cause of action for fraudulent transfer was essentially one in equity and the relief sought depended upon the application of equitable doctrines; Moofly received adequate notice of the Estate's motion for terminating sanctions; there were sufficient grounds to justify the imposition of terminating sanctions; the superior court did not exceed its jurisdiction by awarding the return of derivative copyrighted materials; even assuming that the Estate's claim fell within the subject matter of copyright, the rights the Estate asserted are not equivalent to copyright; and there was no error in including Moofly's owner as a party liable for the judgment. View "Moofly Productions, LLC v. Favila" on Justia Law
Wanke, Industrial, Commercial, etc. v. AV Builder Corp.
Wanke, Industrial, Commercial, Residential, Inc. (Wanke) was a company that installed waterproofing systems. It sued Scott Keck and another of its former employees in 2008 for trade secret misappropriation after they left Wanke to form a competing business, WP Solutions. The parties entered into a stipulated settlement and later litigated Keck's alleged breach of that settlement agreement. To collect, Wanke filed a creditor's suit against third party AV Builder Corp. (AVB) to recover $109,327 that AVB owed WP Solutions in relation to five construction subcontracts. Following a bench trial, the court entered judgment in Wanke's favor for $83,418.94 after largely rejecting AVB's setoff claims. Invoking assignment principles, AVB contended: (1) Wanke lacked the ability to sue given judgment debtor WP Solutions's corporate suspension; (2) Wanke's suit was untimely under section 708.230 of the Code of Civil Procedure; and (3) the trial court erred in denying its request for warranty setoffs under section 431.70. Rejecting each of these contentions, the Court of Appeal affirmed the judgment View "Wanke, Industrial, Commercial, etc. v. AV Builder Corp." on Justia Law
San Francisco Print Media Co. v. The Hearst Corp.
The San Francisco Examiner sued the San Francisco Chronicle, claiming that the defendant sold a certain type of print advertising in the Chronicle at prices that violated California’s Unfair Practices Act (UPA, Bus. & Prof. Code, 17000) and Unfair Competition Law (UCL, 17200). The trial court granted the defendant summary judgment. The court of appeal affirmed. The trial court properly rejected the claim of below-cost sales under the UPA after excluding the opinion of the plaintiff’s expert on costs. The plaintiff had disclaimed reliance on specific transactions to prove the Chronicle’s alleged underpricing of its print advertising, leaving only the aggregate cost analysis prepared by that expert to establish the occurrence of alleged below-cost sales. The plaintiff’s expert lacked the foundational knowledge to conduct the requisite cost analysis and based his analysis on another individual’s non-UPA-related pricing analysis without understanding its foundations, such as some of the included cost components. Summary judgment was proper as to the claim for unlawful use or sale of loss leaders under the UPA because the plaintiff failed to identify the loss leader sales on which this claim was based. The trial court did not err in granting summary judgment on the causes of action for secret and unearned discounts under the UPA. View "San Francisco Print Media Co. v. The Hearst Corp." on Justia Law
Hensel Phelps Construction Co. v. Super. Ct.
Petitioner Hensel Phelps Construction Co. (Hensel Phelps) was a defendant in construction defect litigation filed by plaintiff and real party in interest Smart Corner Owners Association (Smart Corner). Hensel Phelps moved for summary judgment contending, among other things, that Smart Corner's claims were barred by a 10-year limitations period under Civil Code section 941. Smart Corner was not a party to the contract between Hensel Phelps and the developer of a mixed-use project, to which Smart Corner was a lessee. In its motion for summary judgment, Hensel Phelps asserted that "substantial completion" under the statute had the same meaning as "substantial completion" in its construction contract with the developer. Because the parties to the construction contract agreed that "substantial completion" occurred on a certain date at the time of construction, Hensel Phelps argued that the limitations period began to run on that date. Because Smart Corner asserted its claims more than 10 years later, Hensel Phelps contended they were untimely. The trial court denied the motion, finding that the definition of substantial completion in the contract did not trigger the running of the statute. And, even if it did, Smart Corner had raised a triable issue of fact whether the definition of substantial completion under the contract had been satisfied on the date asserted by Hensel Phelps. Hensel Phelps petitioned the Court of Appeal for mandamus relief, arguing again that the date of substantial completion adopted by the parties to the contract "conclusively establishe[d]" the date of substantial completion under the statute. After review, the Court of Appeal concluded the trial court did not err by denying Hensel Phelps's motion for summary judgment. "Hensel Phelps offers no authority for the novel proposition that certain parties may, by contract, conclusively establish the date when a limitations period begins to run on another party's cause of action. ... it is clear that the statute does not simply adopt the date determined by private parties to a contract for their own purposes as the date of substantial completion." The Court therefore denied the petition. View "Hensel Phelps Construction Co. v. Super. Ct." on Justia Law
Techno Lite, Inc. v. Emcod, LLC
Techno Lite filed suit against defendants, alleging claims for breach of fiduciary duty, misappropriation of trade secrets, interference with contractual relationships, intentional and negligent interference with prospective economic advantage, conversion, injunctive relief, and constructive trust. Defendants cross-complained against Techno Lite and several others. In the published portion of the opinion, the Court of Appeal rejected defendants' argument that they could not be found liable for fraud because their promise not to compete against their current employer was void under Business and Professions Code section 16600. In this case, a promise not to compete with an employer while employed is not void, and defendants had a duty of disclosure. View "Techno Lite, Inc. v. Emcod, LLC" on Justia Law
Posted in: Business Law
ENA North Beach, Inc. v. 524 Union Street
Hong, the president of ENA, sought to open a restaurant with a license to serve beer and wine in a building owned by 524 Union, which had housed restaurants for many years. After leasing the premises, ENA was unable to open because the San Francisco Planning Department determined that an existing conditional use authorization for the property was no longer effective and a new one could not be granted. ENA sued the lessors, claiming false representations and failure to disclose material facts regarding the problems with the conditional use authorization. A jury awarded ENA compensatory and punitive damages. The court of appeal held that the jury’s verdict on liability, including liability for punitive damages, is supported by substantial evidence. Hong’s testimony was substantial evidence supporting the jury’s verdict. Additional support was provided by evidence of email correspondence around the time Hong entered the lease. The trial court employed an improper procedural mechanism in reducing the amount of the punitive damages award but the jury award was unsupported and Hong effectively stipulated to the reduced amount. View "ENA North Beach, Inc. v. 524 Union Street" on Justia Law
Presbyterian Camp & Conference Centers, Inc. v. Superior Court
CalFire filed suit against PCCC to recover costs arising from a fire started by a PCCC employee. PCCC demurred, arguing that the Third Appellate District's opinion in Department of Forestry & Fire Protection v. Howell (2017) 18 Cal.App.5th 154, precluded liability. The trial court disagreed and overruled. The Court of Appeal denied PCCC's petitioner for writ of mandate, holding that Health and Safety Code sections 13009 and 13009.1 include principles of vicarious corporate liability. The court agreed with the dissenting opinion in Howell, and held that sections 13009 and 13009.1 expressly permit the recovery of fire suppression and investigation costs from a corporation, like PCCC, when one of its agents or employees negligently, or in violation of the law, sets a fire, allows a fire to be set, or allows a fire kindled or attended by them to escape onto any public or private property. Therefore, the trial court correctly overruled PCCC's demurrer to CalFire's complaint. View "Presbyterian Camp & Conference Centers, Inc. v. Superior Court" on Justia Law
Posted in: Business Law
Handoush v. Lease Finance Group, LLC
Handoush, a store owner, sued LFG regarding a lease for credit card processing equipment. The complaint alleges fraud, rescission, and violation of Business and Professions Code section 17200. The lease agreement states that it “shall be governed by the laws of the State of New York,” that any disputes shall be litigated in New York, and that the parties waived their rights to a jury trial. California precedent (Grafton), forbids pre-dispute jury trial waivers; under New York law such waivers are enforceable. The court dismissed, finding that Handoush did not meet his heavy burden of demonstrating that the forum selection clause is unreasonable and that “the right to trial by jury is not unwaivable” under Code of Civil Procedure section 631. The court of appeal reversed. The trial court erred in enforcing the forum selection clause in favor of a New York forum where the clause includes a pre-dispute jury trial waiver, which Grafton instructs is unenforceable under California law. LFG failed to show that enforcement of the forum selection clause would not substantially diminish the rights of California residents in a way that violates California's public policy. View "Handoush v. Lease Finance Group, LLC" on Justia Law
MGA Entertainment, Inc. v. Mattel, Inc.
This lawsuit stemmed from MGA and Mattel's dispute over ownership of the Bratz line of dolls and claims of copyright infringement. The Court of Appeal agreed with the trial court that, under California law, the same suspicions that allowed MGA to request discovery and plead the unclean hands defense in the federal court in 2007 were sufficient to trigger the statute of limitation on its misappropriation of trade secrets claim which was filed in federal court in 2010. Accordingly, the court affirmed the trial court's grant of summary judgment on the complaint because it was barred by the statute of limitations. View "MGA Entertainment, Inc. v. Mattel, Inc." on Justia Law
Rudick v. State Board of Optometry
Plaintiffs challenged the Board of Optometry's denial of an application for a statement of licensure submitted by Rudick, a licensed optometrist (Business and Professions Code section 3041.2), Rudick is a 49% owner of Ridge, a medical corporation, and works at one of Ridge’s four locations. Ridge employs both ophthalmologists and optometrists at each location. The Board denied Rudick’s application, stating: “you list yourself as the principal employer at the location ... you state that you are 49% shareholder in the business. Per BPC 3077 you need to submit a Branch Office License application if you have a financial interest in that location.” The trial court denied the petition, finding that the Board properly determined Rudick must comply with the branch office licensing requirements for his practice at Ridge’s Magalia office since his principal place of practice was in Paradise. The court of appeal affirmed, upholding the Board’s decision that Rudick must obtain a branch office license for each Ridge location aside from his principal place of practice; for purposes of section 3077, “office” means any place where optometry is practiced notwithstanding the fact that ophthalmology is also practiced at the location, or that the practicing optometrist is merely a minority owner of the medical corporation where he is practicing. View "Rudick v. State Board of Optometry" on Justia Law