Justia California Court of Appeals Opinion Summaries

The trial court found defendants Peng Xufeng and Jia Siyu filed a frivolous anti-SLAPP motion against Changsha Metro Group Co., Ltd. (Changsha). Changsha sued defendants for: (1) breach of fiduciary duty; (2) constructive fraud; (3) aiding and abetting; (4) unjust enrichment; and (5) a constructive trust. Defendants responded with an anti-SLAPP motion. The trial court ordered defendants to pay Changsha $61,915 for Changsha’s attorney’s fees in opposing the anti-SLAPP motion. Defendants contended the trial court erred in awarding attorney’s fees to Changsha because: (1) defendants were not given a 21-day safe harbor period; and (2)Changsha requested attorney’s fees in its opposition to the anti-SLAPP motion, rather than in a separate motion. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Changsha Metro Group Co. v. Xufeng" on Justia Law

Under the Santa Cruz Mobilehome Ordinance, a park owner may make an annual general rent adjustment without notice to the county, based on specified criteria. An owner who believes the annual adjustment does not provide for “a just and reasonable return” may petition for a special rent increase. Pinto, a 177-space mobile home park, filed a special petition seeking to increase rents by 47 percent. Notice was provided to the residents, who hired counsel and submitted objections. A hearing officer denied the proposed increase. Pinto filed a petition for administrative mandamus and complaint for declarative relief naming the county and the hearing officer as respondents. The county argued that Pinto failed to join the mobile home park residents as indispensable parties under Code of Civil Procedure section 389. Instead of amending its complaint/petition, Pinto elected to stand on the original pleadings. A judgment of dismissal was entered.The court of appeal remanded The trial court, citing Code of Civil Procedure section 389(a), concluded that the residents are necessary parties but did not address section 389(b)--whether the case should be dismissed due to the residents’ absence. The parties disagreed about whether the statute of limitations had run on joinder and the owner’s election to stand on its original pleading truncated the process. The court granted the unopposed motion to dismiss without deciding whether the residents could be made parties or whether the lawsuit could continue without them. View "Pinto Lake MHP LLC v. County of Santa Cruz" on Justia Law

Two powerful friends decided to take out significant loans in order to invest in a purported business opportunity overseas. The business opportunity was in reality, a scam. The friends offered as collateral assets which were not theirs to encumber. The third party to whom the assets belonged had no idea the assets were being so encumbered. And the "lender" was another investor in the scam intent on recouping its investment. The opportunity was "a complete bust," and the friends were unable to pay the loans back. The lender sued to collect what was owed and foreclose on its secured interest in the offered collateral. The friends failed to answer the lawsuit, and a default judgment was obtained. The lender then began to execute on its judgment. The issues presented for the Court of Appeal's review centered on two main issues: (1) whether the default judgment was void; and (2) assuming it was valid, whether the trial court should have vacated the default and default judgment under its statutory and equitable powers. The Court determined the order denying the motion to vacate default judgment should have been reversed, and the matter remanded for the trial court to vacate the default, default judgment and an assignment order (entered April 30, 2018). View "Luxury Asset Lending v. Philadelphia Television Network" on Justia Law

The Court of Appeal held that Code of Civil Procedure section 351 impermissibly burdens interstate commerce, and thus the dormant Commerce Clause, when it is used to toll the statute of limitations against a judgment debtor who moved away from California to engage in commerce after the judgment was entered.The court affirmed the trial court's grant of summary judgment to debtor on the ground that creditor's lawsuit is time-barred. In this case, creditor filed suit in 2018 to enforce a 1997 judgment against a judgment debtor who departed California in 1998 to start a new business in Nevada. In light of the general law governing the dormant Commerce Clause, and the specific application of that law to tolling statutes aimed at out-of-state defendants in Bendix Autolite Corp. v. Midwesco Enterprises, Inc. (1988) 486 U.S. 888, the court explained that analyzing whether section 351 violates that clause is a three-step process: first, the court determined that debtor engaged in interstate commerce; second, section 351 does not discriminate against interstate commerce in purpose or practical effect; and third, section 351 places burdens on interstate commerce that are clearly excessive in relation to its putative local benefits. The court rejected creditor's arguments to the contrary. View "Arrow Highway Steel, Inc. v. Dubin" on Justia Law

Olson is a driver for Lyft, whose terms of service include an agreement he could not bring a Private Attorney General Act (PAGA), Labor Code 2698, claim in court, and that disputes with Lyft must be resolved by individual arbitration. Olson sued Lyft alleging six PAGA claims. Lyft petitioned to compel to arbitration. The petition acknowledged that a 2014 precedent (Iskanian) precluded enforcement of PAGA waivers, but asserted that Iskanian was wrongly decided and was no longer good law in light of the U.S. Supreme Court’s 2018 decision, Epic Systems. The trial court rejected Lyft’s arguments.The court of appeal affirmed. Epic Systems addressed the question of whether the NLRA renders unenforceable arbitration agreements containing class action waivers that interfere with workers’ right to engage in “concerted activities.” It did not address private attorney general laws like PAGA or qui tam suit. View "Olson v. Lyft, Inc." on Justia Law

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