Justia California Court of Appeals Opinion Summaries

Mohamed Aljabban appeals from an adverse judgment after a bench trial in the lawsuit that he and his wife, Jacqueline Carrasco, filed against defendants Fontana Indoor Swap Meet, Inc. (FISM), Jonathan Shapiro and Victor Ramirez. Aljabban and Carrasco operated a beauty salon on the premises of an indoor swap meet managed by FISM and its president, Shapiro. Aljabban contended: (1) the trial court erred in concluding that he and Carrasco were not permitted to remove a sink/cabinet unit, a water heater and some decorative molding when vacating the premises of the beauty salon; (2) FISM and Shapiro improperly withheld $680.00 of the security deposit to cover expenses it incurred to repair damage to the premises; (3) the trial court should have found that FISM and Shapiro breached the parties’ agreement under which Aljabban and Carrasco occupied the premises because they wrongfully failed to renew it; and (4) he did not receive a fair trial because of alleged misbehavior during trial by Shapiro. After review, the Court of Appeal determined only one of Aljabban’s contentions had merit: FISM was not entitled to withhold $680.00 of the security deposit to cover the expense of repairing damage to the premises, as the parties did not specifically agree that the security deposit could be used to cover repairs. Accordingly, the Court reversed in part the trial court's judgment with respect to this contention, but affirmed in all other respects. The matter was remanded for further proceedings on the issue of attorney fees and costs. View "Aljabban v. Fontana Indoor Swap Meet, Inc." on Justia Law

Plaintiffs Cheryl Thurston and Luis Licea (collectively Thurston) were California residents who purchased items from defendant Fairfield Collectibles of Georgia, LLC (Fairfield), a Georgia limited liability company, through the company's website. Thurston alleged Fairfield’s website was not fully accessible by the blind and the visually impaired, in violation of the Unruh Civil Rights Act. The trial court granted Fairfield’s motion to quash service of summons, ruling that California could not obtain personal jurisdiction over Fairfield, because Fairfield did not have sufficient minimum contacts with California. The Court of Appeal reversed, finding the evidence showed that Fairfield made some eight to ten percent of its sales to Californians. "Hence, its website is the equivalent of a physical store in California. Moreover, this case arises out of the operation of that website." The trial court therefore could properly exercise personal jurisdiction over Fairfield. View "Thurston v. Fairfield Collectibles of Georgia, LLC" on Justia Law

Granny Purps grows and provides medical marijuana to its 20,000 members, in compliance with state laws governing the production and distribution of marijuana for medical purposes. Santa Cruz County’s ordinance prohibits any medical cannabis operation from cultivating more than 99 plants; Granny’s dispensary was growing thousands of marijuana plants. The sheriff’s office went to the dispensary in June 2015, seized about 1,800 plants, and issued a notice of ordinance violation. Several months later, officers again went to the dispensary and took about 400 more marijuana plants. Granny sued, alleging conversion, trespass, and inverse condemnation and sought an order requiring the county to return the seized cannabis plants, The trial court dismissed.The court of appeal reversed. A government entity does not have to return seized property if the property itself is illegal but the Santa Cruz ordinance ultimately regulates land use within the county; it does not (nor could it) render illegal a substance that is legal under state law. View "Granny Purps, Inc. v. County of Santa Cruz" on Justia Law

Defendants-tenants John and Rosa Castro (the tenants) leased a residential property from plaintiff-landlord Fred Graylee. The landlord brought an unlawful detainer action against the tenants, alleging they owed him $27,100 in unpaid rent. The day of trial, the parties entered into a stipulated judgment in which the tenants agreed to vacate the property by a certain date and time. If they failed to do so, the landlord would be entitled to enter a $28,970 judgment against them. The tenants missed their move-out deadline by a few hours and the landlord filed a motion seeking entry of judgment. The trial court granted the motion and entered a $28,970 judgment against the tenants under the terms of the stipulation. The tenants appealed, arguing the judgment constituted an unenforceable penalty because it bore no reasonable relationship to the range of actual damages the parties could have anticipated would flow from a breach of the stipulation. To this, the Court of Appeal agreed, and reversed and remanded this matter for further proceedings. View "Graylee v. Castro" on Justia Law

Paul Copenbarger and Kent McNaughton formed Newport Harbor Offices & Marina, LLC (NHOM) in 2003 to acquire an office building in Newport Beach. McNaughton and Copenbarger were equal owners and the sole members of NHOM. Copenbarger delegated to McNaughton “management of the day-to-day operations of the commercial real property owned by the Company,” and McNaughton delegated to Copenbarger “management and handling of all legal affairs of the Company.” These delegations were “[s]ubject to revocation” by the delegating members. McNaughton later leased several office suites in NHOM’s building for his separate real estate business. McNaughton signed the rental agreement on behalf of both himself and NHOM. In early 2008, after learning McNaughton had unilaterally increased his monthly NHOM management payments to himself, Copenbarger revoked McNaughton’s delegated authority to manage NHOM’s day-to-day operations. In response, McNaughton stopped paying rent to NHOM. NHOM hired attorney Elaine Alston and her firm, Alston, Alston & Diebold (collectively, Alston), to file unlawful detainer actions against McNaughton. In June 2008, while the unlawful detainer actions and arbitration were pending, McNaughton formally revoked Copenbarger’s delegated right to manage NHOM’s legal affairs. He also filed a motion to compel arbitration of the lease dispute. The arbitrator issued an interim award in 2011, finding largely in Copenbarger’s favor. He further found McNaughton had breached his leases with NHOM by improperly withholding rent. Copenbarger petitioned to confirm the arbitration award with the trial court, and McNaughton filed a motion to disqualify Alston. The court denied McNaughton’s disqualification motion, granted Copenbarger’s petition to confirm the arbitration award, and confirmed the award in all respects. McNaughton filed an action seeking declaratory relief against Alston, "vaguely alleging" Alston was impermissibly representing NHOM in litigation matters now adverse to McNaughton. The trial court sustained Alston's demurrer without leave and granted her anti-SLAPP motion, citing the collateral estoppel effect of the first case. Alston then filed the underlying malicious prosecution action against McNaughton and his attorneys, who each filed anti-SLAPP motions. The Court of Appeal affirmed that portion of the trial court's order granting McNaughton's anti-SLAPP motion as to Alston's fraud claim; the portion of the order granting McNaughton’s and his attorney's anti-SLAPP motions as to Alston’s malicious prosecution claim was reversed. The matter was remanded for further proceedings. View "Alston v. Dawe" on Justia Law

Pulte, a residential developer, was sued for construction defects by the owners of 38 homes. Many subcontractors worked on the projects, under contracts requiring each subcontractor to indemnify Pulte and to name it as an additional insured on the subcontractor’s commercial general liability insurance. Pulte cross-complained against subcontractors who worked on the homes. Travelers, the insurer for four subcontractors, provided a defense. The “Blanket Additional Insured Endorsements” to Travelers’s named insureds’ policies stated that the “person or organization is only an additional insured with respect to liability caused by ‘your work’ for that additional insured.Travelers filed a complaint in intervention against the insurers for seven subcontractors (respondents), who declined to provide a defense, seeking equitable subrogation. Pulte settled the homeowners’ claims and its claims against all the subcontractors. The court concluded that it “would not be just” to find respondents jointly and severally liable for the costs Travelers sought to recover. There was considerable variation in the number of homes each respondent worked on. The homeowners’ complaints did not indicate which subcontractor worked on which home, and no evidence was presented as to whether the work of any subcontractor was defective.The court of appeal affirmed. Pulte was entitled to indemnity and defense from each respondent only with respect to its own scope of work. Travelers was "not seeking to stand in Pulte’s shoes. It is seeking to stand in a different, more advantageous" shoes. View "Carter v. Pulte Home Corp." on Justia Law

Ben-E-Lect, a third-party insurance claim administrator, developed a medical expense reimbursement plan; employers could buy a group policy of medical insurance with a high deductible and self-fund to pay for the healthcare expenses employees incurred within the annual deductible or any copay requirement. The practice of employers’ using such plans in conjunction with a high-deductible health plan is called “wrapping.” Ben-E-Lect was the state’s largest third-party administrator for small group employers who wrapped their employee medical policies. Anthem provides fully insured health plans to the California small group employer market. Beginning in 2006, Anthem announced a series of policies that limited wrapping. In 2014, Anthem prohibited wrapping all Anthem plans. Employer groups who used Anthem plans certified they would not wrap Anthem policies, and agents certified they would not advise employers to enter into any employer-sponsored wrapping plan. Ben-E-Lect sued Anthem.The court of appeal affirmed that Anthem’s policy to prohibit wrapping its health insurance products violated the Cartwright Act (Bus. & Prof. Code, 16700); interfered with Ben-E-Lect’s prospective business relationships; and was an illegal, coercive, vertical group boycott under the antitrust rule of reason (Bus. & Prof. Code, 17200), because Anthem told its insurance agents that if they wrapped any Anthem policies they would be subject to termination loss of sales commissions. The court affirmed an award of $7.38 million and an injunction. The trial court considered sufficient evidence of market power and market injury. View "Ben-E-Lect v. Anthem Blue Cross Life and Health Insurance Co." on Justia Law

In 2006, Ram’s Gate purchased a Sonoma County winery from the Roches. Ram’s Gate later sued the Roches for breach of contract, fraud, and negligent nondisclosure, claiming they withheld seismic information about the property and made misstatements concerning the ability to build on an existing building pad. Protracted litigation ultimately ended with Ram’s Gate dismissing the action, Roche paying nothing to Ram’s Gate, and Ram’s Gate paying most but not all of Roche’s attorney fees. Roche then brought a malicious prosecution suit against Ram’s Gate, two of its members, and their attorney, Hyde, alleging they withheld documents in discovery that would have proved they knew or should have known the seismic information they claimed was kept from them when they bought the property from Roche. The defendants filed unsuccessful special motions to strike the complaint as a strategic lawsuit against public participation (anti-SLAPP motions). The court of appeal affirmed the denial of the motion under Code Civ. Proc., 425.16(b)(1). A cause of action for malicious prosecution fits by definition into the scope of the anti-SLAPP statute but Roche is likely to succeed on the merits and is now entitled to proceed to trial. View "Roche v. Hyde" on Justia Law

A "subtle" question concerning entitlement to attorney fees raised by this appeal was one of first impression for the Court of Appeal. In a separate lawsuit filed at Superior Court, plaintiffs obtained a judgment for breach of contract, including an award of attorney fees, against certain entities not parties to the present suit. Plaintiffs filed the present enforcement action against defendants, seeking to hold them liable on the judgment as alter egos of the judgment debtors. Plaintiffs lost against one of the defendants, Steve Saleen (Steve). Steve moved for attorney fees under the contract; the court granted the motion and plaintiffs appeals. Plaintiffs contended this was not an action on the contract and, therefore, fees were unavailable under Civil Code section 1717. Instead, it was an enforcement action. They cited caselaw for the proposition that a judgment on the contract subsumes and extinguishes contractual rights. On the other hand, had plaintiffs included Steve as a defendant in the Superior Court suit, making the exact same alter ego allegations they made to the Court of Appeal, undoubtedly Steve would have been entitled to contractual attorney fees under the doctrine of reciprocity established by Civil Code section 1717 and Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (1979), even though he was not a signatory on the contract. The Court of Appeal concluded the timing of an alter ego claim (either pre- or postjudgment) was too arbitrary a consideration on which to base the right to attorney fees. "When a judgment creditor attempts to add a party to a breach of contract judgment that includes a contractual fee award, the suit is essentially 'on the contract' for purposes of Civil Code section 1717." The Court therefore agreed with Steve and affirmed judgment. View "MSY Trading Inc. v. Saleen Automotive, Inc." on Justia Law

Plaintiff filed suit against defendant, alleging a common count claim for "money lent." The trial court found that plaintiff loaned defendant $874,708.44, which defendant never repaid. Defendant argued that the money came from entities controlled by plaintiff rather than from plaintiff himself.The Court of Appeal affirmed the trial court's judgment against defendant because defendant waived his defense of lack of capacity by failing to assert it at the earliest opportunity. The court also held that the trial court properly concluded that proof of an implied promise to repay was legally sufficient for plaintiff's common count claim. In this case, substantial evidence supported the trial court's finding that defendant made such an implied promise. Finally, defendant's statute of frauds argument is meritless. View "Rubinstein v. Fakheri" on Justia Law