Justia California Court of Appeals Opinion Summaries

An investor brought a derivative action against the managers of a limited liability company, alleging unauthorized transactions conducted under their management. After a bench trial, the investor lost both at trial and on appeal. The investor’s claims were rejected, and the court awarded costs to the prevailing manager. Although both managers were originally involved in the case, only one remained relevant for the cost award proceedings at this stage.Following the trial and appellate losses, the Superior Court of Los Angeles County awarded costs to the prevailing manager under Code of Civil Procedure section 1032 and California Rules of Court, rule 8.891, which together provide that a prevailing party is generally entitled to recover costs. The plaintiff had previously defeated the manager’s motion for a security bond under Corporations Code section 17709.02, a statute intended to deter frivolous derivative suits. The plaintiff argued that this earlier success on the bond motion should bar any subsequent award of costs, claiming that section 17709.02 overrides the ordinary cost rules.The California Court of Appeal, Second Appellate District, Division Eight, reviewed this argument. The appellate court held that Corporations Code section 17709.02 does not preclude an award of ordinary litigation costs to a prevailing defendant in a derivative action where the bond motion was denied. The court found no statutory language supporting the plaintiff’s position and noted that case law, including Brusso v. Running Springs Country Club, Inc., confirms that the bond statute is special-purpose and does not displace general cost-recovery rules. The appellate court affirmed the Superior Court’s judgment, awarding costs to the prevailing defendant. The court also found that the plaintiff had forfeited several additional arguments by failing to support them with adequate briefing or legal authority. View "Barrios v. Chraghchian" on Justia Law

Daevieon Towns purchased a new Hyundai Elantra in 2016, and over the next 19 months, the car required multiple repairs for alleged electrical and engine defects. In March 2018, either Towns or his wife, Lashona Johnson, requested that Hyundai buy back the defective vehicle. Before Hyundai acted, the car was involved in a collision, declared a total loss, and Johnson’s insurance paid her $14,710.91.Towns initially sued Hyundai Motor America in the Superior Court of Los Angeles County for breach of express warranty under the Song-Beverly Consumer Warranty Act. As trial approached, Towns amended his complaint to add Johnson as a plaintiff, arguing she was the primary driver and responsible for the vehicle. The trial court allowed the amendment, finding Johnson was not a buyer but permitted her to proceed based on its interpretation of Patel v. Mercedes-Benz USA, LLC. At trial, the jury found for Towns and Johnson, awarding damages and civil penalties. However, the court reduced the damages by the insurance payout and adjusted the prejudgment interest accordingly. Both parties challenged the judgment and costs in post-trial motions.The California Court of Appeal, Second Appellate District, Division Four, reviewed the case. It held that only a buyer has standing under the Act, so Johnson could not be a plaintiff. The court also held that third-party insurance payments do not reduce statutory damages under the Act, following the Supreme Court’s reasoning in Niedermeier v. FCA US LLC. Furthermore, prejudgment interest is available under Civil Code section 3288 because Hyundai’s statutory obligations do not arise from contract. The court affirmed in part, reversed in part, and remanded for the trial court to enter a modified judgment and reconsider costs. View "Towns v. Hyundai Motor America" on Justia Law

The plaintiff, a former employee of California State University, Chico, filed suit against her prior employer and other parties alleging employment discrimination, whistleblower retaliation, and wrongful termination. She initiated the lawsuit on April 19, 2019. Under Code of Civil Procedure section 583.310, as extended by Judicial Council emergency rule 10 due to the COVID-19 pandemic, she was required to bring her case to trial by October 19, 2024. However, at a case management conference in March 2024, the trial court scheduled the trial for February 3, 2025, a date beyond the statutory deadline.After the trial date was set, the defendants moved to dismiss the case for failure to bring it to trial within the statutory period. They argued that no exception to the deadline applied, specifically contesting the existence of any oral agreement to extend the deadline. The plaintiff opposed dismissal, asserting that both parties had verbally agreed in open court to the February 2025 trial date, and that this agreement was recorded in the minute order. However, the minute order only documented the setting of the trial and related conferences, and contained no indication of any oral stipulation or agreement. The Superior Court of Butte County found that the plaintiff had not demonstrated a valid oral agreement to extend the deadline under section 583.330, subdivision (b), and granted the motion to dismiss with prejudice.On appeal, the California Court of Appeal, Third Appellate District, reviewed the trial court’s decision under the abuse of discretion standard, and interpreted the statute de novo. The appellate court held that an oral agreement to extend the statutory trial deadline under section 583.330, subdivision (b), must be reflected in the court’s minutes or a transcript. Because the record did not include any such evidence, the exception did not apply. The court affirmed the judgment of dismissal and awarded costs to the defendants. View "Randolph v. Trustees of the Cal. State University" on Justia Law

The parties in this case entered into a settlement agreement in 2005 to resolve a longstanding water rights dispute between their respective parcels, providing that future disputes would be resolved by mediation and, if necessary, binding arbitration before a retired judge with water law expertise in San Diego County. The agreement included provisions for attorney fees for the prevailing party in certain circumstances. In 2016, a new dispute arose over groundwater resources and the parties proceeded to arbitration. During the arbitration, the arbitrator withdrew after Lodge filed demands for disqualification, leaving the dispute unresolved. While the Barbanell entities sought a replacement arbitrator, Lodge initiated a separate lawsuit asserting the same claims as those in arbitration. The Barbanell entities then filed a distinct action, petitioning the Superior Court of San Diego County to appoint a new arbitrator.The Superior Court of San Diego County granted the Barbanell entities’ petition to appoint a new arbitrator and entered judgment in their favor, designating them as prevailing parties entitled to seek attorney fees. Upon subsequent motion, the court found that the settlement agreement entitled the Barbanell entities to recover reasonable attorney fees incurred in obtaining the appointment of a new arbitrator, and awarded them $68,800 in fees. An amended judgment was issued to reflect this award.The Court of Appeal, Fourth Appellate District, Division One, reviewed only the postjudgment award of attorney fees. It affirmed the Superior Court’s decision, holding that the Barbanell entities were prevailing parties in the discrete action to appoint an arbitrator and were entitled to attorney fees under the settlement agreement and Civil Code section 1717. The appellate court clarified that the presence of related claims pending elsewhere did not preclude a fee award for this separate, concluded action. View "Barbanell v. Lodge" on Justia Law

John Doe was a motivational speaker who, for nearly thirty years, was featured, promoted, and endorsed by the California Association of Directors of Activities (CADA) to intermediate and high school audiences. In 2022, CADA received an email from a former church youth group member alleging that Doe, under a different name in the 1990s, had engaged in an inappropriate sexual relationship with a 17-year-old student. After an independent investigation, CADA concluded that Doe was likely the person in question and terminated its association with him. CADA notified its members of the termination without disclosing the nature of the accusation.Doe filed suit in Santa Cruz County Superior Court against both CADA and the accuser, asserting tort and contractual claims. Both defendants filed special motions to strike under California’s anti-SLAPP statute. The trial court granted the accuser’s motion, finding Doe’s claims against her were protected by the common interest privilege and lacked evidence of malice. Regarding CADA, the trial court found the claims arose from protected activity but denied CADA’s motion to strike most of Doe’s claims, concluding Doe showed a sufficient probability of prevailing, particularly on contract-based claims.On appeal, the California Court of Appeal, Sixth Appellate District, reviewed the trial court’s order denying CADA’s anti-SLAPP motion. The appellate court held that all of Doe’s tort claims and contractual claims based on CADA’s communications were subject to the common interest privilege and must be stricken, as Doe did not show CADA acted with malice. However, the court affirmed the denial of the motion as to Doe’s contractual claims based on his termination, concluding Doe demonstrated minimal merit and that public policy did not bar enforcement. The appellate court reversed in part and remanded, directing the lower court to strike the specified claims and allegations. View "Doe v. California Assn. of Directors of Activities" on Justia Law

SoCal Lien Solutions, LLC attempted to serve process on a domestic corporation, BDB Properties, at the address listed in public records for its principal office, executive officers, and agent for service of process. After multiple unsuccessful attempts to serve BDB’s designated agent, SoCal obtained a court order under California Corporations Code section 1702 authorizing service by hand delivery of the summons and complaint to the Secretary of State. SoCal delivered the documents to the Secretary on June 10, 2022. The Secretary did not forward notice of service to BDB until October 24, 2022, which was after the court had entered a default and default judgment against BDB.BDB later sought to set aside the default and judgment, first by ex parte application, which was denied, and then by a noticed motion under Code of Civil Procedure section 473.5. The Superior Court of Los Angeles County found BDB’s motion untimely under section 473.5 but granted relief on the ground that service was not complete until the Secretary mailed notice of the documents to BDB, rendering the judgment void.The California Court of Appeal, Second Appellate District, Division One, reviewed the statutory language of Corporations Code section 1702 and determined that service is deemed complete ten days after the documents are delivered to the Secretary, regardless of when the Secretary forwards notice to the corporation. The court held that the lower court erred in ruling that service was incomplete until the Secretary mailed notice. The Court of Appeal reversed the order setting aside the default and default judgment and directed the trial court to vacate its order granting BDB’s motion. The main holding is that service on a corporation via the Secretary of State under section 1702 is complete ten days after delivery, and subsequent mailing of notice by the Secretary is not required to complete service. View "Socal Lien Solutions, LLC v. BDB Properties" on Justia Law

Rebecca Eisenberg, a director of the Santa Clara Valley Water District, was permitted to review two confidential investigation reports at the District’s facility in January 2024. These reports, prepared by outside counsel, addressed allegations of misconduct by Eisenberg and complaints she raised against staff. The District explicitly instructed Board members not to remove the reports from the premises. Eisenberg nevertheless left the facility with the reports, later admitting her actions at Board meetings. After repeated requests for their return and a formal censure by the Board, Eisenberg refused to return the reports.The District filed suit in Santa Clara County Superior Court, asserting claims including conversion and seeking prejudgment recovery of the reports. It successfully moved for a writ of possession and a turnover order, which Eisenberg temporarily stayed by posting a statutory undertaking. The District then sought a mandatory preliminary injunction compelling the return of the reports. Eisenberg opposed this, arguing that the claim and delivery law’s remedy (the writ of possession, now stayed) precluded further injunctive relief and that the District did not meet the requirements for an injunction.The California Court of Appeal, Sixth Appellate District, reviewed the trial court’s order granting the preliminary injunction. The appellate court held that Code of Civil Procedure section 516.050 expressly permits a party to seek injunctive relief for possession of personal property, even after pursuing relief under the claim and delivery law. The court further found no abuse of discretion: the District demonstrated a likelihood of prevailing on its conversion claim and showed that the harm to the District from denial of the injunction outweighed any harm to Eisenberg. The appellate court affirmed the order granting the preliminary injunction, requiring Eisenberg to return the confidential reports. View "Santa Clara Valley Water Dist. v. Eisenberg" on Justia Law

The case involves a dispute over possession and damages related to a residential property in Malibu. In 2019, the plaintiff filed an unlawful detainer action against several defendants, including the defendant, seeking possession of the property and damages. The defendant responded with an answer denying several key allegations, including the plaintiff’s ownership of the property and the claimed fair rental value. The plaintiff later obtained leave to file a first amended complaint, which reclassified the action and asserted new causes of action but relied on the same underlying facts as the original complaint. The defendant did not file a new answer to this amended complaint.The Los Angeles County Superior Court entered a default against the defendant after he failed to answer the amended complaint and subsequently entered a default judgment awarding significant damages. The defendant moved multiple times to set aside the default judgment. The court eventually denied his postjudgment motion under Code of Civil Procedure section 473, subdivision (d), which allows courts to set aside void judgments. The defendant timely appealed these orders.The California Court of Appeal, Second Appellate District, Division Four, reviewed whether the original answer sufficed to controvert the first amended complaint’s allegations and precluded entry of default. The appellate court held that because the defendant’s original answer denied essential factual allegations that remained central to the amended complaint—including ownership and valuation—the default judgment was improper. The court found that a defendant’s original answer stands as a response to reasserted facts in an amended complaint, and default cannot be entered on allegations previously denied. The Court of Appeal reversed the judgment and the trial court’s order denying the motion to set aside default, remanding with instructions to vacate the default and default judgment. View "Ammari v. Ammari" on Justia Law

Plaintiff was employed by defendant and, as a condition of employment, electronically signed both an offer letter containing an arbitration provision and a separate nondisclosure agreement (NDIAA) on the same day. The offer letter required arbitration for most employment-related disputes, while the NDIAA included terms such as a waiver of bond for injunctive relief and a heightened burden of proof for public domain information. Plaintiff’s employment ended in March 2023, after which she sued defendant in Alameda County Superior Court for disability discrimination, retaliation, and related claims under California’s Fair Employment and Housing Act, as well as wrongful termination. None of her claims involved confidential information or sought injunctive relief.Defendant moved to compel arbitration, asserting the Federal Arbitration Act (FAA) governed and that plaintiff’s claims fell within the arbitration agreement’s scope. The trial court found the arbitration agreement and NDIAA should be read together under California Civil Code section 1642, determined that certain NDIAA provisions were unconscionable, and concluded that unconscionability permeated the arbitration agreement. The court declined to sever the NDIAA’s unconscionable provisions and denied the motion to compel arbitration.On appeal, the California Court of Appeal, First Appellate District, Division Five, disagreed with the trial court’s refusal to sever. The appellate court held that the FAA does not preempt section 1642, and even assuming the NDIAA’s challenged provisions were unconscionable and properly considered alongside the arbitration agreement, those provisions were collateral to the arbitration agreement’s central purpose and did not affect the claims at issue. Applying Ramirez v. Charter Communications, Inc., the appellate court determined that the unconscionable terms should have been severed and the arbitration agreement enforced. Consequently, the order denying arbitration was reversed. View "Wise v. Tesla Motors, Inc." on Justia Law

In 2017, the plaintiff was involved in a low-speed collision when the defendant, driving a car, struck the plaintiff riding a motorcycle. The plaintiff did not fall or receive immediate medical attention and reported pain only in his hip, leg, and foot the following day. He later claimed the accident caused severe and lasting neck and groin injuries. The defense contested the severity of the plaintiff’s injuries, noting his continued participation in physical activities after the accident. As trial approached, the plaintiff, who had previously designated numerous expert witnesses, visited a new doctor—Dr. Gravori—just days before trial. Dr. Gravori recommended spine surgery, introducing a new theory of injury not previously disclosed.The Superior Court of Los Angeles County allowed Dr. Gravori to testify as an expert, provided he was immediately made available for a deposition at the plaintiff’s expense. The defense objected, arguing the late disclosure of this expert was prejudicial and violated procedural rules. The deposition took place during jury selection, and the court maintained its ruling, permitting Gravori’s testimony. The jury ultimately awarded the plaintiff substantial damages, including future medical expenses and pain and suffering.The California Court of Appeal, Second Appellate District, Division Eight, reviewed whether the trial court abused its discretion by allowing the late expert witness. The appellate court found that the plaintiff offered no reasonable justification for the delayed designation of Dr. Gravori and failed to follow statutory requirements for augmenting the expert witness list. The court held that this was an abuse of discretion and that the error was prejudicial, likely affecting the outcome. Accordingly, the judgment and costs order were vacated, and the case was remanded for a new trial. Costs were awarded to the appellants. View "Fancourt v. Zargaryan" on Justia Law