Justia California Court of Appeals Opinion Summaries

Auburn Woods I Homeowners Association (HOA) and its property manager Frei Real Estate Services (FRES), tendered the defense of two lawsuits filed against them by a member of HOA under HOA’s condominium/association policy. HOA’s insurer, State Farm Insurance Company (State Farm), denied the tender for the first lawsuit, but accepted defense of the second lawsuit as to HOA only. HOA and Al Frei, individually and doing business as FRES, sued State Farm and its agent Frank Lewis for, among other things, breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court entered judgment in favor of State Farm and Lewis after a bench trial. HOA and Frei appealed, contending: (1) the trial court erred in concluding that State Farm did not owe a duty to defend HOA and FRES against the first lawsuit; (2) HOA had a reasonable expectation that FRES would be covered under the directors and officers liability provision of its policy; (3) State Farm failed to reimburse HOA for post-tender expenses related to the second lawsuit; (4) Lewis breached his contract with HOA by failing to include FRES as an additional insured and failing to alert HOA and Frei that itwas not possible to include FRES under the directors and officers liability provision; (5) State Farm breached the covenant of good faith and fair dealing implied in HOA’s policy; and (6) the trial court erred in denying HOA and Frei’s motion to tax the expert witness fees State Farm and Lewis sought to recover under Code of Civil Procedure section 998. After review, the Court of Appeal concluded: (1) State Farm did not have a duty to defend HOA and FRES against the first lawsuit; (2) HOA and Frei failed to establish that FRES should have been deemed an insured under the directors and officers liability provision; (3) substantial evidence supported the trial court’s finding that HOA did not present State Farm with a clear statement of the amount of attorney’s fees and costs HOA incurred in defending against the second lawsuit; (4) HOA and Frei did not establish the alleged contract between Lewis and HOA; (5) HOA and Frei failed to demonstrate error with regard to their breach of implied covenant cause of action; and (6) State Farm and Lewis’s pretrial offer to compromise was effective to trigger cost shifting under section 998. View "Auburn Woods I Homeowners Assn. v. State Farm General Ins. Co." on Justia Law

Finch began his employment with Midwest in 2014. His employment agreement stated: “This Agreement shall be construed in accordance with Ohio Law" and that any litigation "must be venued in Franklin County, Ohio.” In 2016, Midwest promoted Finch. The exhibits to the 2014 employment agreement were revised. In 2017 and 2018, Midwest provided Finch with Compensation and Annual Plan letters, revising Finch’s compensation. In 2019, Finch filed this lawsuit in Contra Costa County, alleging violations of the Labor Code for failure to pay his final wages on time and failure to reimburse him for business expenses; violation of Business and Professions Code section 17200; and a cause of action under the Private Attorneys General Act.The court concluded that the 2017 and 2018 Compensation letters modified the 2014 employment agreement. Because these modifications occurred after January 1, 2017, the court concluded they triggered Finch’s Labor Code section 925 right. Section 925 renders a forum selection clause in an employment contract voidable by an employee if the contract containing the clause was “entered into, modified, or extended on or after January 1, 2017.” The court of appeal denied Midwest’s writ petition. Section 925 is triggered by any modification to a contract occurring on or after January 1, 2017. View "Midwest Motor Supply Co. v. Superior Court" on Justia Law

Plaintiffs-Respondents were Cornerstone Realty Advisors, LLC (CRA) and Cornerstone Ventures, Inc. (CVI). Respondent Winget Spadafora & Schwartzberg, was counsel for Plaintiffs during most of the trial court litigation, referred to as WSS. Defendants-Appellants were Summit Healthcare REIT, Inc. (Summit), Paul Danchik, Daniel Johnson, Dominic Petrucci, Kairos Partners, Inc., and Kent Eikanas. Defendants sought production of CRA’s and CVI’s financial and accounting records, including their general ledgers. Plaintiffs had access to the financial and accounting records, and could and should have produced them without objection or delay. Instead, Plaintiffs carried out a protracted and costly campaign of discovery abuse, which included disobeying several court orders to produce the documents, "with the successful aim of never, ever, producing the requested documents." The trial court responded to this misconduct by imposing monetary sanctions and ordering Plaintiffs’ complaint be dismissed as a terminating sanction. Imposition of terminating sanctions, though significant, was not the subject of this appeal; plaintiffs’ appeal challenging the terminating sanctions was dismissed. The issue this case presented for the Court of Appeal's review was the monetary sanctions imposed by the trial court. Defendants contended the trial court did not award them enough to cover their attorney fees and costs incurred as a result of plaintiffs’ discovery abuses and erred by not making plaintiffs’ trial counsel jointly and severally liable for the monetary sanctions imposed. The Court of Appeal concluded: (1) the trial court's decision to impose monetary sanctions was a reasonable exercise of the court's discretion; and (2) substantial evidence supported the trial court's finding that WSS did not advise the misconduct resulting in the discovery sanctions: [t]he trial court read and considered the discovery referee’s report, which had recommended making WSS liable for the monetary sanctions, but exercised its authority to reach a different conclusion based on the court’s own assessment of the credibility of the declarants and the weight of the evidence. The court did not err in so doing." View "Cornerstone Realty Advisors, LLC v. Summit Healthcare etc." on Justia Law

After the referee in a consensual general reference filed his decisions in the trial court, but before entry of judgment on those decisions, the trial court entertained motions to set them aside and ordered a new trial to be had by the trial court, not by the referee. Petitioners, who had prevailed before the referee, petitioned this court for a writ of mandate to compel the trial court to enter judgment on the referee's decisions, or alternatively, to direct the trial court to order a new trial to be heard by the referee.The Court of Appeal granted the petition, holding that the trial court had no authority to review the consensual referee's decisions before entering judgment on them; the trial court did not apply the incorrect standard of review; and the trial court did not err in ordering that the new trial would be heard by it and not by the referee. View "Michael S. Yu, a Law Corp. v. Superior Court of Los Angeles County" on Justia Law

While Michael Tilkey and his girlfriend Jacqueline Mann were at her home in Arizona, the two got into an argument. Tilkey decided to leave. When he stepped out onto the enclosed patio to collect his things, Mann locked the door behind him. Tilkey banged on the door to regain entry, but Mann called police. Police arrested Tilkey and charged him under Arizona law with criminal damage deface and other charges; domestic violence charges were attached to the criminal damage and disorderly conduct charges. Tilkey pled guilty to the disorderly conduct charge only, and the other charges were dropped. After Tilkey completed a domestic nonviolence diversion program, the disorderly conduct charge was dismissed. Before the disorderly conduct charge was dismissed, Allstate Insurance Company (Allstate), for whom Tilkey had worked for over 30 years, terminated his employment based on his arrest and his participation in the diversion program. Allstate informed Tilkey it was discharging him for threatening behavior and/or acts of physical harm or violence to another person. Following the termination, Allstate reported its reason for the termination on a Form U5, filed with Financial Industry Regulatory Authority (FINRA) and accessible to any firm that hired licensed broker-dealers like Tilkey. Tilkey sued Allstate for wrongful termination in violation of California Labor Code section 432.7 and compelled, self-published defamation. At trial, Allstate presented evidence that it would have terminated his employment based on after-acquired evidence that Tilkey had circulated obscene and inappropriate e-mails using company resources. A jury returned a verdict in Tilkey’s favor on all causes of action. Allstate appealed, contending: (1) it did not violate section 432.7; (2) compelled self-published defamation per se was not a viable tort theory; (3) it did not defame Tilkey because there was not substantial evidence its statement was not substantially true; (4) punitive damages were unavailable in compelled self-publication defamation causes of action; (5) the defamatory statement was not made with malice; and (6) the punitive damages awarded here were unconstitutionally excessive. The Court of Appeal agreed Allstate did not violate section 432.7 when it terminated Tilkey’s employment based on his plea and his participation in an Arizona domestic nonviolence program and reversed that judgment. However, the Court concluded compelled self-published defamation was a viable theory, and substantial evidence supported the verdict that the statement was not substantially true, so the Court affirmed that portion of the judgment. While the Court concluded punitive damages were available in this instance, the punitive damages awarded here were not proportionate to the compensatory damages for defamation. The Court remanded this matter to the trial court with directions to recalculate punitive damages. View "Tilkey v. Allstate Ins. Co." on Justia Law

Subcontractor Ehmcke Sheet Metal Company (Ehmcke) recorded a mechanic’s lien to recoup payment due for sheet metal fabrication and installation work done on a luxury hotel project in downtown San Diego. Project owner RGC Gaslamp, LLC (RGC) secured a bond to release the lien. Thereafter Ehmcke filed three successive mechanic’s liens, each identical to the first, prompting RGC to sue it for quiet title, slander of title, and declaratory and injunctive relief. The trial court granted Ehmke’s special motion to strike under the anti-SLAPP statute. The trial court found that Ehmcke met its moving burden because the filing of even an invalid lien was protected petitioning activity. Thereafter, the court found that RGC failed to make a prima facie showing that its sole remaining cause of action for slander of title could withstand application of the litigation privilege. RGC appeals both findings, arguing that the duplicative filing of mechanic’s liens after the posting of a bond was not protected activity. The Court of Appeal concluded after review that RGC erroneously imported substantive requirements of the litigation privilege into the first step of the anti-SLAPP inquiry. Ehmcke met that moving burden once its erroneously excluded reply declarations were considered. With the burden shifted on prong two, RGC failed to make a prima facie showing that the litigation privilege did not bar its slander-of-title cause of action. The anti-SLAPP motion was thus properly granted, and Court likewise affirmed the subsequent attorney’s fees and costs award. View "RGC Gaslamp v. Ehmcke Sheet Metal Co." on Justia Law

A jury held defendant FCA US, LLC (Chrysler) liable on three causes of action arising from plaintiff Jose Santana’s defective vehicle: breach of the express and implied warranty under the Song-Beverly Consumer Warranty Act, and fraudulent concealment. After an award of fees and costs, the total judgment amounted to $1,740,169.58. Chrysler contended most of those damages should have been vacated because there was no substantial evidence of fraudulent concealment. To this, the Court of Appeal agreed: Santana’s fraud theory was that Chrysler concealed an electrical defect in Santana’s vehicle. But the Court found there was no evidence Chrysler was aware of the defect until after Santana purchased his vehicle, and thus no evidence that Chrysler concealed it. Because the fraud judgment could not be supported, the separate award of economic damages, the noneconomic damages, and the punitive damages fell with it. In addition, Chrysler contended there was no evidence of a willful violation of the Song-Beverly Act. To this the Court disagreed, finding that by the time Chrysler’s duty to repurchase arose, it was aware of the electrical defect in Santana’s vehicle, which it chose not to repair adequately. The Court affirmed the trial court in all other respects, and remanded the case for the trial court to enter judgment in favor of Chrysler on the fraud cause of action, striking the additional economic damages of $33,839.91, the noneconomic damages of $100,000, and the punitive damages of $1 million. View "Santana v. FCA US, LLC" on Justia Law

Plaintiff Kathleen Carroll sued her former employer, defendant California Commission on Teacher Credentialing (Commission), for terminating her employment in retaliation for her reporting Commission mismanagement to the state auditor. Prior to bringing this action, plaintiff appealed her termination to the State Personnel Board (Board), claiming the Commission fired her in retaliation for her whistleblower activities. She also filed a separate whistleblower retaliation complaint with the Board. The Board denied her claims. After the Commission removed the matter to federal court, the district court dismissed the section 1983 claim and remanded the matter to state court. A jury found for plaintiff and awarded her substantial damages. The Commission appealed, contending: (1) the district court’s judgment was res judicata as to this action; (2) the Board’s decisions collaterally estopped this action; (3) the trial court abused its discretion in evidentiary matters by (a) permitting plaintiff’s counsel to question witnesses on and asking the jury to draw negative inferences from the Commission’s exercise of the attorney-client privilege, (b) denying the admission of the Board’s findings and decisions, (c) denying the admission of after-acquired evidence, and (d) denying the admission of evidence mitigating plaintiff’s emotional distress; and (4) the damages award was unlawful in numerous respects. Although the district court’s judgment was not res judicata and the Board’s decisions did not collaterally estop this action, the Court of Appeal reversed, finding the trial court committed prejudicial error when it allowed plaintiff’s counsel to question witnesses on and ask the jury to draw negative inferences from the defendants’ exercise of the attorney-client privilege and did not timely instruct the jury with the mandatory curative instruction provided in Evidence Code section 913. Because judgment was reversed on this ground, the Court did not address the Commission’s other claims of error. View "Carroll v. Commission on Teacher Credentialing" on Justia Law

After plaintiff missed the statutory deadline to file a claim against a public entity, he applied to submit a late claim. Then plaintiff filed his complaint the same day, not waiting for the public entity to respond to his application.The Court of Appeal held that the Government Claims Act, Gov. Code, 810, is not satisfied by filing a complaint before rejection of a claim. In this case, plaintiff filed suit against the District for injuries he suffered while attempting to board one of the District's boats. The court held that section 946.6, which allows a petition to seek relief from the failure to comply with the claim requirement after denial of an application for leave to present a claim, did not apply here. Furthermore, the complaint plaintiff filed the same day was premature. In this case, the lawsuit is precluded because it was not preceded by rejection of a claim, and plaintiff's noncompliance with the Act cannot be cured by amending the complaint to allege he complied. Finally, the court held that there was no abuse of discretion in awarding costs. View "Lowry v. Port San Luis Harbor District" on Justia Law

The state filed an unverified complaint against the entities and one of their principals, asserting unfair practices and false advertising. The defendants filed an unverified “Answer” with a general denial of the complaint’s allegations and affirmative defenses. The judge struck the answer as to the entities because they failed to verify the answer as required by Code of Civil Procedure section 446 and asserted only a general denial in contravention of section 431.30(d). The court concluded that section 446(a)'s exception to the verification requirement was coextensive with the Fifth Amendment privilege against self-incrimination and a corporation may not invoke that privilege. In response to a “show cause order” following the defendants’ petition for extraordinary writ relief, the court issued an order noting that the case had been reassigned. After a hearing, a new judge vacated the previous order.The court of appeal agreed that the exception applies to corporations and that the defendants could file a general denial under section 431.30(d), which requires a defendant to answer each material allegation of a verified complaint with specific admissions or denials, but allows a defendant to file a general denial if the complaint is not verified. There is no reason for deeming the state’s complaint verified. The court also noted that an order to show cause, unlike an alternative writ, does not invite the trial court to change the challenged order and that superior court judges generally may not overturn the order of another judge unless the other judge is unavailable. View "Paul Blanco's Good Car Co. Auto Group v. Superior Court" on Justia Law