Justia California Court of Appeals Opinion Summaries

A CVS clerk sold a can of beer to a minor decoy working for the Department of Alcoholic Beverage Control (the Department). The sole issue before the Court of Appeal in this matter was whether the minor made a face-to-face identification of the seller as required by California Code of Regulations, title 4, section 141 (hereafter Rule 141), subdivision (b)(5). The Department suspended Garfield Beach CVS, LLC and Longs Drug Stores California, LLC doing business as CVS Pharmacy Store 9376 (CVS)’s liquor license for 10 days, but CVS appealed and the Alcoholic Beverage Control Appeals Board (the Appeals Board) reversed, finding that an in-store identification of the clerk to the peace officer from about 10 feet away did not constitute a face-to-face identification. The Court of Appeal disagreed and annulled the Appeals Board's decision. View "Dept. of Alcoholic Bev. Control v. Alcoholic Bev. Control Appeals" on Justia Law

Appellants-defendants San Diego County Office of Education (Office) and Randolph Ward appealed a judgment in favor of plaintiff-respondent Rodger Hartnett that reinstated his employment and awarded him $306,954.99 in back pay, benefits, and prejudgment interest. Defendants contended: (1) collateral estoppel precluded the trial court from granting Hartnett's requested relief; (2) the court misinterpreted Education Code section 45306 in its decision; and (3) the court improperly determined the amount of Hartnett's back pay without remanding that issue to the Office's personnel commission (the commission), for the commission to make factual findings on the issue. After review, the Court of Appeal concluded the trial court's sole ground for granting Hartnett's petition, that the commission did not proceed in a manner required by law because it did not conduct an investigation, was not supported by section 45306. Office and Ward were entitled to judgment in their favor. Accordingly, the Court reversed and remanded for the trial court to enter judgment in defendants’ favor. View "Hartnett v. San Diego County Office of Education" on Justia Law

Duke was the founder and CEO of Skinsation. Defendants were Duke’s investors and members of the board of directors. In 2011, Callaway sued Skinsation, Duke, and defendants over a commercial lease, which Duke and defendants personally guaranteed. A judgment of $385,072. was entered, jointly and severally. Duke owned 49 percent of Skinsation stock and defendants combined owned 51 percent. In 2013, Skinsation’s outstanding capital stock had a fair market value of $1.2-$1.5 million. In May 2014, Duke and defendants unsuccessfully attempted to settle their respective contributions. The next day, defendants convened a shareholder meeting without notice to Duke and removed her as a director and terminated Duke’s employment. Defendants entered into a settlement with Callaway. For payment of $397,694, Callaway released defendants from all obligations under the judgment and assigned then all interest in the judgment. The judgment, plus accrued interest, was $444,286.56. Defendants served Duke with notice of levy on all of her Skinsation capital stock, claiming $448,029.90. Defendants purchased all of Duke’s shares at a sheriff’s sale. Duke sued. The court dismissed Duke’s cause of action for conversion. The court of appeal mandamus relief. A judgment debtor may not enforce an assignment of the judgment against a co-judgment debtor for more than the co-judgment debtor’s proportionate share of the judgment and may not enforce an assignment of the judgment against a co-judgment debtor without first seeking judicial determination of the proportionate share of the co-debtor’s liability. View "Duke v. Superior Court" on Justia Law

In June 2012, plaintiff-appellant Allen Krizhner leased a Mercedes-Benz from defendant Mercedes-Benz USA, LLC for personal use. The complaint alleged the car came with an express written warranty covering repairs for any defects. During the warranty period, the car allegedly exhibited a variety of defects which caused the navigation system and key fob to malfunction, the steering column adjustment mechanism and power seats to be inoperative, the coolant level warning light to illuminate, and smoke to emanate from the cigarette lighter. After bringing the issues to defendant’s attention, and frustrated with defendant’s supposed failure to abide by its warranty obligations, plaintiff filed suit under the Song-Beverly Consumer Warranty Act. Plaintiff accepted an offer of compromise pursuant to Code of Civil Procedure section 998, including a restitution provision identical to Civil Code section 1793.2 (d)(2)(B). The court awarded plaintiff over $47,000 in accordance with the 998 offer. Plaintiff appealed, arguing the trial court erred because it denied him recovery of approximately $680 in vehicle registration renewal and certificate of nonoperation fees which he incurred in the years after he first leased the car. The Court of Appeal concluded the court properly determined section 1793.2(b)(2)(B) did not require payment of vehicle registration renewal fees and related costs incurred after the initial purchase or lease. View "Kirzhner v. Mercedes-Benz USA, LLC" on Justia Law

The insurance policy in question in this case was issued by petitioner Admiral Insurance Company (Admiral) to the real party in interest, A Perfect Match, Incorporated (Perfect Match), a company that "match[es] surrogates and egg donors with infertile families." On the first page of the policy Admiral promised to provide coverage for potential claims that Perfect Match knew or reasonably should have known about, but failed to disclose. In this case, prior to purchasing the Admiral policy, there was no question Perfect Match knew about a potential claim former clients Monica Ghersi and Carlos Arango intended to file arising from the birth of their daughter with a rare form of eye cancer. A lawyer representing Ghersi and Arango sent a letter to Perfect Match in June 2012 giving notice of their intent to file a complaint alleging professional negligence. After consulting with its insurance broker, Perfect Match made the decision not to disclose the potential Ghersi/Arango claim to its current insurer out of concern it would result in a higher premium. When it applied for the Admiral policy in October 2012, Perfect Match likewise did not mention the potential Ghersi/Arango claim. But once the Ghersi/Arango complaint was filed and ultimately served in March 2013, Perfect Match claimed potential coverage under the Admiral policy based on a "professional incident" and asserted its right to a defense. Admiral denied coverage and refused to defend, citing the policy language that excluded coverage for claims the insured reasonably should have foreseen prior to inception of the policy. Perfect Match then sued alleging breach of contract and bad faith. The Court of Appeal found no material factual disputes in this case: Admiral was entitled to insist that Perfect Match disclose all potential claims of which it was, or should have been, aware; it could and did exclude from coverage any such claim that was not disclosed. The superior court erred in failing to grant summary judgment in favor of Admiral. Accordingly, the Court issued a writ of mandate directing the superior court to vacate its order denying Admiral's motion for summary judgment and instead enter an order granting the motion. View "Admiral Ins. Co. v. Superior Court" on Justia Law

The Chois consulted in 2003 with defendants, who advised the Chois that an IRC 412(i) Plan retirement account would provide tax advantages, asset protection, and steady income. It required several steps including the purchase of “whole life” insurance for eventual exchange for American General Universal Life “Platinum” policies. The initial purchase was $1,275,000; a second purchase cost $439,000. The policies comprised 70-75 percent of the Plan portfolio. The IRS audited the Chois in 2006. Defendants changed their advice. Plaintiffs sued, alleging cash losses attributable to loss in value and that they were required to pay $440,000 in back taxes and interest, plus $60,000 in penalties, and faced future payments to the Franchise Tax Board of California and anticipated IRS penalties of $600,000. Defendants cross-complained for indemnity and comparative fault against American General. The trial court found the claims time-barred. The court of appeal affirmed, upholding a determination that the limitations period began to run in September 2007, when plaintiffs were “on notice” that the IRS would impose penalties, not in 2010 when penalties were assessed; the court declining to consider any tolling effect created by the ongoing fiduciary relationship; and application of the 2007 “notice” date as a bar to all claims. View "Choi v. Sagemark Consulting" on Justia Law

Teachers retired from the Salinas Unified High School District disputed attempts by the California State Teachers’ Retirement System (CalSTRS) to recoup retirement benefit overpayments caused by the District's years-long miscalculation, arguing that the statute of limitations barred recoupment of prior overpayments and reduction of future monthly benefits. An ALJ upheld CalSTRS’s conclusions, rejecting the statute of limitations defense. Teachers obtained a peremptory writ of administrative mandamus compelling CalSTRS to resume payments at the original amounts. The court of appeal reversed. Education Code section 22008(c) provides a three-year statute of limitations applicable for CalSTRS to bring an action to recoup the overpayments, commencing with its “discovery of the incorrect payment.” Discovery means the date CalSTRS actually discovered, or in the exercise of reasonable diligence should have discovered, the incorrect payment. August 18, 2005 was the date on which CalSTRS had inquiry notice of the overpayment issue; the action was commenced on July 6, 2012. Under the continuous accrual theory, the statute of limitations for periodic payments commenced with the due date of each payment. Only payments due more than three years prior to CalSTRS’s commencement of the action on July 6, 2012, were subject to the statute of limitations defense. View "Baxter v. California State Teachers' Retirement System" on Justia Law

Plaintiffs-respondents Virgil and Glenda Jensen contended they suffered damages caused by a negligently maintained rental truck, rented by his supervisor, Charles Scannell, which blew a tire while Virgil was driving it. Defendant-appellant U-Haul Co. of California (UHCA) appealed the trial court’s denial of its motion to compel arbitration. UHCA contended plaintiffs were bound by the arbitration agreement in the rental contract, even though neither plaintiff was a party to that contract. The Court of Appeal’s review of plaintiffs’ complaint showed that plaintiffs did not rely or depend on the terms of the rental in asserting their claims, and none of their allegations were in any way founded in or bound up with the terms or obligations of that agreement. UHCA, citing to general principles and cases that it contended were analogous, argued that plaintiffs were bound to arbitrate their claims, even though they are not signatories to the agreement between Scannell and UHCA, on any of three theories: third-party beneficiary, agency, or estoppel. The Court of Appeal was not persuaded and affirmed the trial court. View "Jensen v. U-Haul Co. of California" on Justia Law

Apple shareholders filed a consolidated derivative action concerning Apple’s alleged pursuit and enforcement of anticompetitive agreements with other Silicon Valley companies to prohibit the recruitment of each other’s employees. Plaintiffs alleged that certain current and former members of Apple’s board of directors were aware of or tacitly approved of Apple’s practices and breached their fiduciary duties by permitting the illegal agreements over many years. Plaintiffs alleged that the Apple board never disclosed settlements of an earlier action filed by the Department of Justice based on violations of the federal antitrust laws and several federal class action lawsuits brought by employees of Apple and other technology companies. Given each board member’s alleged role in participating in or allowing the illegal agreements, plaintiffs claimed that any demand on Apple's board to institute the derivative action against the individual defendants should be excused as a futile and useless act. The superior court found that an amended complaint adequately alleged demand futility as to the board in place when the original action was filed. The composition of the board of directors had changed in the interim. The court of appeal disagreed. The court was required to assess demand futility as to the board in place when the amended complaint was filed. View "Apple, Inc. v. Superior Court" on Justia Law

Joseph and Monique Howeth’s home shared a driveway with their neighbor Tina Coffelt’s. After the parties were unable to amicably share the driveway in accordance with an easement governing its use, the Howeths sued Coffelt, seeking injunctive relief. The parties ultimately reached a settlement agreement, which included a stipulation to the entry of judgment to resolve the lawsuit. The agreement also purported to allow the parties to seek a $1,000 fine in court if the other neighbor refused to comply with the agreement. When Coffelt allegedly began to ignore the agreement's restrictions on the use of the driveway, the Howeths filed a postjudgment motion seeking an "interim judgment" awarding them $12,000 in fines, plus attorney fees. The trial court denied the motion, finding that it did not have continuing jurisdiction to consider the motion and directed the Howeths to file a new lawsuit for breach of contract. The Howeths appealed, arguing the trial court had continuing jurisdiction to enforce the stipulated judgment and erred in denying the motion. The Court of Appeal concluded the judgment at issue here was a consent judgment, entered pursuant to a settlement agreement and a stipulation for judgment based on that agreement. Consent judgments are not appealable. The Court of Appeal determined that the Howeths did not attempt to enforce the judgment that resulted from the agreement between the parties, instead seeking to determine whether Coffelt had breached the agreement. Thus, the Court surmised, the order denying the Howeths’ motion was not appealable after judgment, and the appeal had to be dismissed. View "Howeth v. Coffelt" on Justia Law