Justia California Court of Appeals Opinion Summaries

Debra Turner, formerly a director and president of the Conrad Prebys Foundation (Foundation), appealed judgments of dismissal in favor of the Foundation and its directors, following orders sustaining demurrers to her probate and civil actions. In those actions, Turner alleged the other Foundation directors breached their fiduciary duties in preapproving a settlement range for Laurie Victoria, who served both as a Foundation director and as the trustee of the Conrad Prebys Trust (Trust), to negotiate a settlement of a trust challenge by a disinherited heir. Turner also challenged Victoria’s actions as trustee. Several months after commencing her action, Turner’s term as a Foundation director and officer expired when she was not reelected to her positions during the annual election process. The civil and probate courts determined that Turner lost standing to maintain her causes of action. The issue this case presented for the Court of Appeal's review centered on whether a director of a nonprofit public benefit corporation who brings an action on behalf of the nonprofit public benefit corporation could lose standing to pursue its claims if the director was not reelected during the litigation. The Court of Appeal concluded the statutory scheme and public policy considerations required a continuous relationship with the public benefit corporation that was special and definite to ensure the litigation was pursued in good faith for the benefit of the corporation. "If a plaintiff does not maintain such a relationship, the statutory scheme provides the nonprofit public benefit corporation with protection through the Attorney General, who may pursue any necessary action either directly or by granting an individual relator status." Because Turner lost standing to pursue her causes of action, the Court affirmed the judgments of dismissal as to Turner acting in her capacity as a former director and officer. The case was remanded, however, with directions for the civil and probate courts to grant 60 days leave to amend, limited to the issue of whether a proper plaintiff could be substituted to pursue the existing claims. The Attorney General could consider during that 60-day period whether granting relator status to Turner, or another individual, for these claims was appropriate. View "Turner v. Victoria" on Justia Law

Plaintiffs-appellants Will Taylor, Ken Gorman and Nicholas Wayman, individuals who formerly conducted bail fugitive recovery, appealed the grant of summary judgment in favor of defendant-respondent Financial Casualty & Surety, Inc (FCS), a surety admitted to write bail in California. Plaintiffs sued FCS and other bail-agent entities and individuals for, among other things, fraud, various Labor Code violations, as well as statutory damages under the Labor Code, conversion, unfair competition, discrimination and wrongful termination, alleging in part that FCS was a co-employer with the right to control the manner in which they performed their assignments. FCS moved for summary judgment on grounds plaintiffs were not FCS employees as a matter of law, disposing of their claims based on the Labor Code as well as for fraud and conversion, which related to misrepresentations of their employment status or withholding final paychecks. The trial court granted the motion, in part ruling FCS did not employ plaintiffs for purposes of causes of action based on the Labor Code or dependent on an employment relationship; plaintiffs’ claims for fraud and conversion were barred by the “new right-exclusive remedy doctrine”; and plaintiffs could not make out a claim for unfair competition on their allegations that FCS violated the law. Plaintiffs contend the trial court erred by its ruling. Finding no reversible error, the Court of Appeal affirmed the trial court's judgment. View "Taylor v. Financial Casualty & Surety" on Justia Law

California Labor Code section 1197.1 (b) authorized the Division of Labor Standards Enforcement (the Division) to issue a citation to an employer if the Division “determines that a person has paid or caused to be paid a wage less than the minimum under applicable law.” The issue this case presented for the Court of Appeal's review centered on whether certain employers, farm labor contractor Jaime Zepeda Labor Contracting, Inc. (Zepeda), and Zepeda’s “client employers,” Anthony Vineyards, Inc. (AVI) and Richard Bagdasarian, Inc. (RBI) (collectively “Employers”), committed minimum wage violations that would support the Division’s issuance of section 1197.1 citations. It was undisputed that the Employers paid all of the employees at issue at least the minimum wage by payday. Nevertheless, the Division contended it properly issued section 1197.1 minimum wage citations because the Employers did not promptly pay the final wages of the employees who were purportedly discharged or deemed by the Division to have quit in accordance with the prompt payment mandates of Labor Code sections 201, 202 and 203. The Division contended that the failure to pay wages on the dates that the employees were discharged or within 72 hours of when they quit subjected the Employers to waiting time penalties under section 203, and constituted independent minimum wage violations that supported the issuance of section 1197.1 citations, even though the Employers paid final wages that were at or above the minimum wage on or before payday, in accordance with the minimum wage law. After review, the Court of Appeal concluded the Division improperly issued the section 1197.1 minimum wage citations to the Employers. Therefore, the the superior court properly issued a peremptory writ of administrative mandate directing the Division to dismiss the citations with prejudice. View "Jamie Zepeda Labor Contracting v. Dept. of Industrial Relations etc." on Justia Law

Maryam Hedayati appealed the grant of summary judgment in favor of Interinsurance Exchange of the Automobile Club (Auto Club or the Club) on Hedayati’s breach of good faith and fair dealing claim. Hedayati suffered catastrophic injuries in October 2012 when Auto Club’s insured ran a red light and struck her in a pedestrian crosswalk. The insured driver immediately notified Auto Club of the accident and authorized the Club to disclose his policy limits ($25,000); he also informed Auto Club he had no other insurance or assets. Auto Club’s policy with its insured required him to relinquish to the Club his right to negotiate settlement of potential tort claims falling within the policy. When he inquired about a release, Auto Club inaccurately told its insured driver Hedayati was not willing to sign one. Despite repeated requests during settlement negotiations from Hedayati’s attorney, Auto Club initially declined to disclose the insured’s policy limits; eventually it acquiesced, but Auto Club still declined to provide written proof of those limits, which the Club knew was common practice to facilitate a settlement. Auto Club then withheld from Hedayati’s counsel the insured’s written declaration which indicated he had no other insurance, which the Club had confirmed, and the insured’s statements that he had no assets. Auto Club also, despite multiple requests from Hedayati’s lawyer, failed to provide a copy of its insured’s policy which Hedayati’s lawyer needed to verify its terms. Hedayati’s counsel had demanded a hard copy of the policy as a settlement condition. Auto Club ultimately failed to settle the matter within its $25,000 policy limits. Hedayati subsequently obtained a $26 million judgment against the insured driver, along with assignment of the insured’s claim against the Club for breach of the covenant of good faith and fair dealing implicit in its policy with him. The trial court concluded the evidence presented by Hedayati was insufficient as a matter of law. After its de novo review, the Court of Appeal disagreed with the trial court’s evaluation of the evidence. It therefore reversed the summary judgment ruling and remanded for further proceedings. View "Hedayati v. Interinsurance Exchange of the Auto. Club" on Justia Law

Mark Yazdani was the president and sole owner of Meridian Financial Services, Inc. (Meridian). Over the span of a year, Yazdani made a series of investments totaling $5,079,000 in an international gold-trading scheme run by a loan broker, Lananh Phan, who promised him “guaranteed” returns of 5 or 6 percent per month. It turned out to be a Ponzi scheme and when it collapsed, Yazdani lost most of his money. In exchange for some of his investments, Yazdani demanded “collateral” from Phan, in the form of "loans" or promissory notes secured by deeds of trust in favor of Meridian on Phan's residence, and the residences of unwitting third parties ensared in Phan's scheme. The loans were facilitated through escrow at Chicago Title Company. The purported borrowers never knew of these transactions; their signatures on the Meridian deeds of trusts were forged or obtained by Phan under false pretenses. After the Ponzi scheme collapsed and unable to recover his investment, Yazdani moved to foreclose on the purported borrowers. In one of two lawsuits, two of the purported borrowers sued Yazdani and Meridian (collectively, Appellants) to prevent foreclosure of and quiet title to their home. A judge cancelled the Meridian deeds of trust, finding that they were “forged” and that Appellants had acted with unclean hands in procuring them (the Orange County decision). In this, the second lawsuit, Appellants sued Chicago Title, among others, alleging they were induced to invest with Phan because Chicago Title’s involvement in the transactions reassured them that Phan’s investment scheme was legitimate. Appellants also sued more than 50 individuals who allegedly received payments from Phan, asserting they were Phan’s creditors, and the transfers of money to the individuals should have been set aside. Summary judgment was entered in favor of Chicago Title and the individuals. Appellants appealed both judgments, contending the trial court erred in giving preclusive effect to the Orange County decision. They also argued the award of attorney fees was grossly excessive and an abuse of discretion. Finding no merit to these contentions, the Court of Appeal affirmed the judgments and the fee award. View "Meridian Financial etc. v. Phan" on Justia Law

Mark Yazdani was the president and sole owner of Meridian Financial Services, Inc. (Meridian). Over the span of a year, Yazdani made a series of investments in an international gold-trading scheme run by a loan broker, Lananh Phan, who promised him “guaranteed” returns of 5 or 6 percent per month. It turned out to be a Ponzi scheme and when it collapsed, Yazdani lost most of his money. In exchange for some of his investments, Yazdani demanded “collateral” from Phan, in the form of "loans" or promissory notes secured by deeds of trust in favor of Meridian on Phan's residence, and the residences of unwitting third parties ensared in Phan's scheme. The loans were facilitated through escrow at Chicago Title Company. The purported borrowers never knew of these transactions; their signatures on the Meridian deeds of trusts were forged or obtained by Phan under false pretenses. Yazdani had been made aware of “irregularities” with the execution and notarization of the Meridian deeds of trust. Yazdani moved to foreclose on the purported borrowers. In one of two lawsuits, two of the purported borrowers sued Yazdani and Meridian (collectively, Appellants) to prevent foreclosure of and quiet title to their home. A judge cancelled the Meridian deeds of trust, finding that they were “forged” and that Appellants had acted with unclean hands in procuring them (the Orange County decision). However, the parties later settled and, as a condition of settlement, obtained a stipulated order from a different judge vacating most of the trial judge’s decision. In this, the second lawsuit, Appellants sued Chicago Title, among others, alleging they were induced to invest with Phan because Chicago Title’s involvement in the transactions reassured them that Phan’s investment scheme was legitimate. Appellants also sued more than 50 individuals who allegedly received payments from Phan, asserting they were Phan’s creditors and the transfers of money to the individuals should be set aside. Summary judgment was entered in favor of Chicago Title and the individuals. Appellants appealed both judgments, contending the trial court erred in giving preclusive effect to the Orange County decision. They also argued the award of attorney fees was an abuse of discretion. Finding no merit to these contentions, the Court of Appeal affirmed the judgments and the fee award. View "Meridian Financial etc. v. Phan" on Justia Law

In February 2018, Blake McKenna filed a form complaint against Lance Beesley and Smoothreads, Inc. (Smoothreads). McKenna alleged that on August 4, 2017, he was a pedestrian lawfully crossing the street when he was struck by a vehicle driven by Ann Rogers. McKenna alleged that Rogers’s vehicle struck him due to the negligence of “Doe 1,” (i.e., Ronald Wells) who had “negligently [run] a red light.” Specifically, McKenna alleged that Wells negligently drove his vehicle through a red light, striking Rogers’s vehicle; Rogers’s vehicle in turn struck McKenna. McKenna alleged that he suffered severe bodily injuries as a result of the accident. McKenna also alleged that Wells was driving a vehicle owned by Beesley and Smoothreads. McKenna contended Beesley and Smoothreads knew or should have known that, due to Wells’s past driving experience and/or lack of driving experience, Wells was a negligent driver who created a risk of harm to persons and property and that Beesley and Smoothreads nevertheless knowingly entrusted Wells with the use of the vehicle involved in the accident. The Court of Appeal concluded that a jury may find that an owner who breaches its Vehicle Code section 14604 duty and permits an unlicensed driver to drive the owner’s vehicle had constructive knowledge of the driver’s incompetence to drive. Under the circumstances of this case, the Court held a jury may find that the hirer has constructive knowledge of the hiree's incompetence to drive. The February 28, 2020 judgment in favor of Smoothreads and the September 6, 2019 order granting Smoothreads’s motion for summary judgement were reversed. The October 30, 2019 judgment in favor of Beesley and the September 6, 2019 order granting Beesley’s motion for summary judgment were also reversed. View "McKenna v. Beesley" on Justia Law

The Court of Appeal affirmed the trial court's grant of the Swiss defendants' motions to quash service of summons for lack of personal jurisdiction. At issue in this appeal is whether a Swiss company and its executive vice president, a Swiss citizen and resident, are subject to suit in California court for claims related to the purchase by the Swiss company of shares of a privately-held California corporation.Having carefully reviewed the record presented of Defendant Hemm's contacts with California through his service on the Rodo board, and the nature of Defendant Straumann's transaction with Rodo, the court concluded that in each instance appellants have not demonstrated the required relatedness between the California forum, Hemm or Straumann, and the specific claims at issue, as would be required to permit the constitutional exercise of case-linked jurisdiction. Therefore, the trial court did not err in granting Hemm and Straumann's motions to quash. View "Rivelli v. Hemm" on Justia Law

The issue presented for the Court of Appeal’s review in this case arose from a residential construction defect lawsuit filed by several homeowners against Pulte Home Corporation. The homeowners sued Pulte for allegedly violating building standards set forth in Civil Code section 896, breach of contract, and breach of express warranty pertaining to 13 homes (the Berg litigation). St. Paul Mercury Insurance Company (St. Paul) defended Pulte in the Berg litigation as an additional insured under a general liability policy issued to St. Paul’s named insured and one of Pulte’s subcontractors, Groundbreakers Landscaping, Inc. Pertinent here, St. Paul later sued three of Pulte’s subcontractors -- Vaca Valley Roofing, Inc., Norman Masonry, Inc., and Colorific Painting, Inc. (collectively defendants) -- for equitable subrogation through a complaint in intervention in the Berg litigation. In essence, St. Paul sought to pursue Pulte’s breach of contract claims against defendants for their failure to defend Pulte in the Berg litigation. Standing in Pulte’s shoes, St. Paul asserted defendants were jointly and severally liable for the reimbursement of the money it expended in defending Pulte, St. Paul raised four arguments on appeal: (1) the trial court erred in granting defendants’ request for a jury trial; (2) the trial court erred by failing to instruct the jury that defendants are jointly and severally liable for the mixed defense fees (i.e., attorney fees and costs incurred in defense of the entire Berg litigation, such as attending status conferences or mediations; in other words, tasks unrelated to the defense of a subcontractor’s specific scope of work); (3) the trial court erred in denying St. Paul’s motion for prejudgment interest; and (4) the trial court erred in denying St. Paul’s request for attorney fees in prosecuting the equitable subrogation action. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Berg v. Pulte Home Corp." on Justia Law

Plaintiff Brian Exline appealed an order granting defendant Lisa Gillmor’s special motion to strike under California's anti-SLAPP law. Exline filed a complaint against Gillmor alleging that, during her terms serving as a councilmember and then as the mayor of the City of Santa Clara (the City), Gillmor violated the Political Reform Act of 1974 (the Act) by failing to disclose on Form 700 filings her interest in, and income she received from, an entity known as Public Property Advisors. Exline argued his lawsuit was not subject to challenge under Code of Civil Procedure section 425.16 because it fell within the public interest exemption codified at section 425.17 (b). He contended the trial court erred by concluding that an exception to that exemption, set forth in section 425.17(d)(2) applied and rendered the exemption inapplicable. The Court of Appeal held the exception applied to completion of the Form 700, and the complaint in this case was therefore subject to the anti-SLAPP law. View "Exline v. Gillmor" on Justia Law