Justia California Court of Appeals Opinion Summaries

Plaintiffs filed suit alleging claims for breach of fiduciary duty, conspiracy, and legal malpractice, and defendants moved to strike the entire complaint as to the individual plaintiffs Klotz and Spitz because defendants had no independent legal duty to plaintiffs nor did they act for their personal financial gain. Plaintiffs alleged that a former business associate of theirs, Stephen Bruce, who was a client of defendants, conspired with defendants to unlawfully withdraw from plaintiff SageMill and to usurp a nascent business opportunity of SageMill. The trial court denied the motion. The court reversed the trial court‘s order on plaintiffs‘ second cause of action for conspiracy as to the individual plaintiffs Klotz and Spitz, finding that any advice defendants gave Bruce arose from an attempt to contest or compromise a claim or dispute, and thus was within the ambit of section 1714.10. The court affirmed as to the remaining claims. View "Klotz v. Milbank,Tweed, Hadley & McCloy" on Justia Law

The class action complaint at the heart of this case alleged violations of the Song-Beverly Credit Card Act of 1971 based on Dick’s alleged practice of requesting personal information from consumers during credit card transactions. The litigants reached a settlement providing for class members to receive vouchers for discounts off any merchandise purchases. The initial complaint listed Plaintiff’s counsel of record as California attorney Sean Reis of the law firm of Edelson McGuire, LLP, and several out-of-state attorneys with the notation “[p]ro hac vice admittance to be sought.” The out-of-state attorneys included Joseph Siprut of Siprut PC in Chicago, Illinois. Reis signed the complaint and signed an amended complaint filed in June 2011. While accepting responsibility for monitoring the pro hac vice application, Reis was not aware the application had been denied and assumed the application had been granted. Once the proposed class action settlement had been reached, the parties set a hearing date for an unopposed motion for preliminary approval of the settlement. While preparing for this hearing, Siprut and his staff reviewed the file and were unable to locate an order granting the pro hac vice application. After learning of the status of the pro hac vice application, Reis filed a new application to admit Siprut pro hac vice. The trial court issued a tentative ruling denying the second pro hac vice application. Citing rule 9.40(b) of the California Rules of Court, the court stated that application would be denied due to the “great number of pro hac vice applications” that Joseph Siprut had made during the past year. Siprut appeared at a December 2012 hearing along with Todd Atkins, an attorney from Siprut PC, who was a member of the California State Bar. Reis did not appear. The court, affirming the tentative ruling, denied the pro hac vice application on the ground that Siprut had made 12 pro hac vice applications in the prior 11 months and there were no special circumstances under rule 9.40(b) of the California Rules of Court which would support granting the application. Reis ultimately filed a consent to associate Atkins as counsel of record for plaintiff. Upon settlement of the class, plaintiff's counsel moved for fees. The trial court found that two of a class of 232,000 submitted claims for the merchandise credit. The court could find “absolutely no benefit really to anybody based on your claims record” and noted that most of the attorney fees sought were incurred by two out-of-state attorneys who had never been admitted pro hac vice. Final approval was granted to the settlement. In a supplemental briefing, plaintiff's counsel suggested the court grant Sirput's pro has vice application for admission nunc pro tunc to the date of first application. Counsel's application for fees was ultimately denied, and on appeal, argued the trial court erred in denying the total amount ($210,000) of fees. The Court of Appeal affirmed the trial court's award of $11,000. The Court further affirmed the trial court's decision to reduct the amount of the plaintiff incentive award. View "Golba v. Dick's Sporting Goods" on Justia Law

Justin Leber and Katherine Neumann (collectively, Leber) sued DKD of Davis, Inc. and General Motors Company (not a party on appeal) under California's "lemon law" after buying a Silverado truck with an allegedly defective transmission. Leber alleged the Silverado was “a new motor vehicle,” and DKD and General Motors issued an ""express warranty.'" The Silverado had a defect, despite a reasonable number of repairs, and was not fit for ordinary purposes, but neither defendant replaced it or offered restitution. DKD denied the allegations, arguing Leber did not state a claim under the Act, no warranty was given, and the Silverado was sold "as is." DKD presented evidence the truck had previously been sold to another buyer, who traded it in nearly a year later. During the sale at issue here, Leber signed various documents, including a “Buyers Guide” which states the Silverado was bought “used,” “AS IS-NO WARRANTY,” and with over 10,000 miles on it. Leber opposed DKD’s motion with a combination of legal arguments and facts regarding a warranty by General Motors. Leber also proffered several opposing facts, including that the General Motors warranty was transferrable to subsequent owners, and General Motors had paid for the unsuccessful attempts to fix the alleged defect. The trial court sustained objections to some of Leber’s evidence including evidence showing how other dealers filled out the Buyers Guide to account for the transfer of a manufacturer’s warranty. Leber appealed when the trial court granted DKD's motion for summary judgment. Finding no reversible error, the Court of Appeal affirmed. View "Leber v. DKD of Davis" on Justia Law

Harley-Davidson, Inc. and several of its subsidiaries sued the Franchise Tax Board for a tax refund. The trial court sustained the Board's demurrer to Harley-Davidson's commerce clause challenge to Revenue and Taxation Code provisions that allowed intrastate unitary businesses to choose annually whether to compute their tax using the combined reporting method or the separate accounting method but required interstate unitary businesses to compute their tax using only the combined reporting method. After review of the Board's arguments on appeal, the Court of Appeal concluded the trial court erred in sustaining the demurrer because the statutory scheme facially discriminated on the basis of an interstate element in violation of the commerce clause. The Court reversed the judgment in that respect and remanded to the trial court to determine in the first instance whether the taxation scheme withstands strict scrutiny (that is, whether it "'advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.'") On a separate issue, the trial court determined after a bench trial that two Harley-Davidson subsidiaries were taxable by California during the tax years 2000 through 2002. Harley-Davidson argued the trial court erred by finding those subsidiaries bore a sufficient nexus to this state to overcome due process and commerce clause limitations on taxing foreign entities. The Court of Appeal disagreed on this and affirmed the judgment. View "Harley-Davidson v. Franchise Tax Bd." on Justia Law

Plaintiff appealed the trial court's sustaining of a demurrer without leave to amend, ruling that plaintiff obligated himself to pay a medical bill when he signed the "Cedars-Sinai Medical Center Conditions of Admissions" (COA). The court concluded that the demurrer was properly sustained as to the Unfair Competition Law, Bus. & Prof. Code 17200 et seq.; plaintiff has forfeited his other claims and has not shown he can amend where he does not explain how he could amend his complaint to avoid demurrer, and he did not propose any proper amendments in opposition to the demurrer; and therefore, the court affirmed the judgment of the trial court. View "Nolte v. Cedars Sinai Medical Center" on Justia Law

In "Hahn v. Diaz-Barba," (194 Cal.App.4th 1177 (2011)), the Court of Appeal affirmed an order, issued under the forum non conveniens doctrine, staying an action against residents of California for tortious interference with contract and related claims for the sale of an interest in a Mexican business. In this petition, the issue was whether the court erred by granting plaintiffs' motion to lift the stay on the ground Mexican courts dismissed two separate suits they filed in that country, making it an unavailable alternate forum. Defendants contended the ruling was erroneous because the evidence showed plaintiffs did not prosecute their action in Mexico in good faith. Among other things, defendants claimed they unreasonably delayed filing suit in Mexico and purposely drafted deficient complaints to ensure their rejection. Additionally, defendants argued the court prejudicially erred by denying their request to cross-examine the independent expert it appointed on Mexican law. After review, the California Court of Appeal concluded defendants' contentions lacked merit, and thus denied the petition. View "Diaz-Barba v. Super. Ct." on Justia Law

Drake and Brian each owned a 50 percent interest in the corporations; in the limited liability companies, they held different interests. Drake and Brian were each a director, officer, and shareholder or member of each of the companies. Seyde was also involved in two of the companies. Drake filed suit alleging multiple types of misconduct against Brian and Seyde and seeking involuntary dissolution. Brian filed a cross complaint. The trial court denied Brian’s motion to stay dissolution of the corporations and limited liability companies and appoint appraisers to permit a buyout to occur (Corp. Code, 2000, 17707.03). The court of appeal affirmed, agreeing that, as a result of Drake’s dismissal of the dissolution claim, the court lacked jurisdiction to consider a motion for buyout. View "Kennedy v. Kennedy" on Justia Law

After an LLC defaulted on a loan that had been used to purchase property for a section 1031 exchange, the lender’s successor brought a deficiency action to enforce commercial guaranty agreements executed by defendants Bradley and Yates, the managers of the LLC. They argued the guaranties were shams, and therefore unenforceable, due to their close relationship with the borrower on the subject loan, the LLC. Defendants filed a counterclaim, asserting that attempts to enforce the guaranties constituted an unfair business practice in violation of the Unfair Competition Law (UCL) (Bus. & Prof. Code, 17200). Under California law, a lender may not pursue a deficiency judgment against a borrower where the sale of property securing a debt produces proceeds insufficient to cover the amount of the debt. Lenders may pursue deficiency judgments against guarantors, but only true guarantors. Where the borrower and the guarantor are the same, the guaranty is considered an unenforceable sham. The jury found in favor of defendants on the sham issue, but the court rejected defendants’ UCL counterclaim. The court of appeal reversed, holding that substantial evidence did not support the finding that the guaranties were shams. View "CADC/RAD Venture v. Bradley" on Justia Law

Sanowicz and Bacal are licensed real estate salespersons. Sanowicz alleges that he and Bacal agreed to share commissions earned by either of them on certain sales of real property, but that Bacal breached that agreement. The two did share some commissions. The trial court dismissed, based on Business and Professions Code section 10137,4 which provides that it is unlawful for a real estate agent to accept compensation from any person other than the real estate broker under whom he or she is licensed. The court of appeal reversed, holding that licensed real estate agents may agree to share commissions earned under certain circumstances. In stating that an agent may pay commission to another licensee, the Legislature did not limit the payee to a licensed broker; instead it required that any such payment be made “through the broker” thus permitting payments to be made to licensed real estate professionals, whether agents or brokers. View "Sanowicz v. Bacal" on Justia Law

Aladdin, a licensed bail agent, sought to enjoin GPS from engaging in bail agent activities in violation of state licensing and regulatory requirements. The superior court dismissed Aladdin’s claim for false advertising under the federal Lanham Act, 15 U.S.C. 1125(a) and granted a defense motion for summary judgment on claims alleging violations of California’s Unfair Competition Law, Business and Professions Code 17200. The court of appeal affirmed, holding that Aladdin lacked standing to maintain a UCL claim; undisputed evidence showed that the commercial activities of GPS associated with its processing of credit or debit card transactions for cash bail payments do not require GPS to obtain a bail bond license, so that GPS is not in violation of the UCL; and Aladdin’s complaint failed to state a Lanham Act claim, as a matter of law. View "Two Jinn, Inc. v. Gov't Payment Serv., Inc." on Justia Law