Justia California Court of Appeals Opinion Summaries

In March 2021, the district attorneys of Riverside, San Diego, Los Angeles, and Santa Clara counties filed a civil enforcement action against Credit One Bank, N.A. (Credit One) on behalf of the People of the State of California. The lawsuit alleged that Credit One engaged in debt collection practices that violated California’s Rosenthal Fair Debt Collection Practices Act and Unfair Competition Law. The People sought injunctive relief, civil penalties, restitution, and other equitable relief. Credit One responded with written discovery requests and later noticed the deposition of the People’s person most qualified (PMQ) to testify on 25 topics, including two document requests.The trial court denied the People’s motion to quash the deposition notice but instructed them to refile it as a motion for a protective order. The court granted the protective order in part, limiting the deposition topics and document requests but requiring the People to designate a PMQ. The People challenged this order, arguing that they should not be subject to deposition under the Code of Civil Procedure and that the deposition would be tantamount to deposing opposing counsel.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. The court held that the People, represented by government agencies, are subject to deposition under section 2025.010 of the Code of Civil Procedure. However, the court agreed that deposing the People in this context is effectively deposing opposing counsel. Therefore, the court applied the standard from Carehouse Convalescent Hospital v. Superior Court, requiring Credit One to demonstrate “extremely” good cause for the deposition. The trial court had not applied this standard, so the appellate court granted the petition and ordered the trial court to reconsider the People’s motion for a protective order using the correct standard. View "People v. Superior Ct. (Credit One Bank)" on Justia Law

Consumer Advocacy Group, Inc. (CAG) filed two lawsuits under Proposition 65 against Walmart Inc. and Wal-Mart.com USA, LLC (collectively, Walmart), alleging that Walmart failed to warn consumers about products containing chemicals known to cause cancer or reproductive toxicity. Michael Marcus, CAG’s Secretary and Chief Financial Officer, purchased the products online as a corporate agent for CAG. During the purchase process, Marcus agreed to Walmart’s Terms of Use, which included an arbitration clause.In the Alameda County Superior Court, Walmart filed petitions to compel arbitration based on the arbitration agreement Marcus accepted. The trial court denied Walmart’s petitions, concluding that Walmart failed to prove the existence of an agreement to arbitrate Proposition 65 claims, as the arbitration agreement only addressed the rights of the individual consumer and did not preclude an action brought by the state.The California Court of Appeal, First Appellate District, reviewed the case. The court held that a plaintiff cannot be compelled to arbitrate a Proposition 65 claim against a seller of consumer products simply because an agent of the plaintiff previously agreed to arbitrate disputes with the seller when purchasing the products online. The court reasoned that the plaintiff’s agent was not acting on behalf of the state, the real party in interest, when purchasing the products, and thus could not bind the state to arbitration. Consequently, the court affirmed the trial court’s orders denying Walmart’s petitions to compel arbitration, as no agreement to arbitrate the Proposition 65 claims was formed. View "Consumer Advocacy Group, Inc. v. Walmart, Inc." on Justia Law

Conner Applegate sued Carrington Foreclosure Services, LLC (CFS) and Wilmington Savings Fund Society, FSB (WSF), alleging they violated Civil Code section 2924m during a foreclosure sale of a property in Mill Valley. Applegate claimed that CFS and WSF improperly handled the foreclosure process and rejected his bid, which he submitted as a prospective owner-occupant. The property was initially auctioned on May 12, 2022, with WSF winning the bid. However, the sale was rescinded at WSF's request before it was finalized. Applegate's subsequent bids did not comply with the statutory requirements, and CFS returned his funds.The trial court granted summary judgment in favor of CFS and WSF. The court found that Applegate's claim under section 2924m failed because the statute did not create a private right of action, the sale was lawfully rescinded before it became final, and Applegate's bids did not meet the statutory requirements. Consequently, the court also dismissed Applegate's other claims, which were based on the alleged violation of section 2924m.The California Court of Appeal, First Appellate District, Division Two, affirmed the trial court's decision. The appellate court held that CFS acted within its authority to rescind the sale before it was finalized, as permitted under section 2924g. Additionally, Applegate's failure to comply with the affidavit requirements of section 2924m meant he could not prove he was a prospective owner-occupant eligible to submit a bid. The court also rejected Applegate's request for leave to amend his complaint, citing unexplained delay and lack of diligence. The appellate court concluded that Applegate's remaining claims were derivative of the failed section 2924m claim and thus also failed. View "Applegate v. Carrington Foreclosure Services, LLC" on Justia Law

M.G. received health care coverage through Medi-Cal and was treated by Dameron Hospital Association (Dameron) after an automobile accident. Dameron required M.G. or her representative to sign a conditions of admissions (COA) form, which included an assignment of benefits (AOB) clause. This clause assigned to Dameron the right to direct payment of uninsured and underinsured motorist (UM) benefits from M.G.'s automobile insurance policy with Progressive Casualty Insurance Company (Progressive). Dameron sought payment from Progressive for M.G.'s treatment at rates higher than Medi-Cal would pay. Progressive settled a UM claim with M.G. but did not pay Dameron, leading Dameron to sue Progressive for damages, an injunction, and declaratory relief.The Superior Court of San Joaquin County sustained a demurrer to Dameron's complaint without leave to amend, citing collateral estoppel based on a prior decision in Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (Dameron v. AAA). The court found the COA forms to be contracts of adhesion and the AOBs unenforceable, as it was not within the reasonable expectations of patients that a hospital would collect payments for emergency care directly from their UM benefits.The California Court of Appeal, Third Appellate District, affirmed the trial court's decision. The appellate court held that the COAs were contracts of adhesion and that it was not within the reasonable expectations of Medi-Cal patients that their UM benefits would be assigned to the hospital for payment of medical bills at rates higher than Medi-Cal would pay. The court concluded that the AOBs were unenforceable and did not need to address arguments regarding collateral estoppel or the Knox-Keene Health Care Service Plan Act. The court also denied Progressive's motion to strike exhibits from Dameron's reply brief. View "Dameron Hospital Assn. v. Progressive Casualty Insurance Co." on Justia Law

The plaintiff, Joshua Naranjo, filed a class action lawsuit against Doctors Medical Center of Modesto, Inc., alleging violations of the unfair competition law (UCL) and the Consumers Legal Remedies Act (CLRA) due to the hospital's practice of charging an undisclosed "Evaluation and Management Services Fee" (EMS Fee) to emergency room patients. Naranjo claimed that the fee was charged without prior notification or agreement, making it an unfair, deceptive, and unlawful practice.The Superior Court of Stanislaus County sustained the hospital's demurrer to each cause of action in Naranjo's first amended complaint (FAC) without leave to amend and entered a judgment of dismissal. Naranjo appealed, and the Court of Appeal initially reversed the judgment, finding that Naranjo had stated valid causes of action under the UCL and CLRA and for declaratory relief. The court also directed the trial court to consider any future motion by Naranjo to amend his FAC to state a breach of contract cause of action.The California Supreme Court granted review and subsequently transferred the case back to the Court of Appeal, directing it to reconsider the matter in light of its ruling in Capito v. San Jose Healthcare System, LP. In Capito, the Supreme Court held that hospitals do not have a duty under the UCL or CLRA to disclose EMS fees to emergency room patients prior to treatment beyond what is required by the statutory and regulatory scheme.Upon reconsideration, the Court of Appeal concluded that Naranjo's claims are barred to the extent they are based on an alleged duty to disclose EMS fees prior to treatment. However, the court found that Naranjo had stated a valid contract-based cause of action for declaratory relief and should be allowed to amend his FAC to state causes of action for breach of contract and violations of the UCL and CLRA, subject to specific parameters. The judgment of dismissal was reversed, and the case was remanded for further proceedings. View "Naranjo v. Doctors Medical Center of Modesto, Inc." on Justia Law

In 2007, Osman Yunus Guracar took out a private student loan from Bank of America but stopped making payments in 2009. In 2017, Student Loan Solutions, LLC (SLS) purchased the loan and sued Guracar for non-payment in 2022. Guracar filed cross-claims against SLS and others, alleging violations of state and federal debt collection statutes. The cross-defendants moved to strike the cross-claims under California's anti-SLAPP statute, which the trial court granted.The Santa Clara County Superior Court ruled that Guracar's cross-claims arose from protected conduct and triggered the anti-SLAPP statute. The court also found that Guracar failed to show a probability of prevailing on his claims, holding that the loan was an installment debt and that SLS had timely accelerated the loan in June 2022. The court did not address Guracar's argument that the loan had been accelerated in February 2010.The California Court of Appeal, Sixth Appellate District, reviewed the case. The court concluded that Guracar had standing to assert his claims under the Debt Buyers Act, the PSLCRA, the Rosenthal Act, and the FDCPA without showing concrete harm. On the merits, the court found that Guracar established a probability of prevailing on his cross-claims for suing to collect a time-barred debt, making false and misleading representations, and failing to comply with certain PSLCRA requirements. The court reversed the trial court's judgment, reinstating these cross-claims but affirmed the striking of Guracar’s other cross-claims. The case was remanded for further proceedings consistent with these findings. View "Guracar v. Student Loan Solutions" on Justia Law

Petitioners were defrauded by a now-defunct corporation that sold them long-term health care and estate planning services they never received. Unable to obtain compensation directly from the corporation, petitioners secured a federal bankruptcy court judgment against the corporation and applied for restitution from the Victims of Corporate Fraud Compensation Fund. The Secretary of State, who administers the Fund, denied their applications, leading petitioners to file a verified petition in the superior court for an order directing payment from the Fund. The superior court granted the petition, and the Secretary appealed.The superior court found that the bankruptcy court judgment was a qualifying judgment for compensation under the Fund. The court noted that the complaint contained allegations of fraud and requested a judgment finding the elements of fraud under California law were satisfied. The superior court also found that the administrative record contained ample evidence supporting the bankruptcy court’s default judgment against the corporation for fraud.The California Court of Appeal, Second Appellate District, reviewed the case. The court concluded that the bankruptcy court’s final judgment, which expressly adjudged petitioners as victims of intentional misrepresentation, met the Fund’s requirement for a judgment based on fraud. The court affirmed the superior court’s judgment regarding petitioners' entitlement to payment from the Fund. However, it reversed and remanded the case for the superior court to specify the amount the Secretary shall pay each petitioner, as the original order did not account for the statutory limit of $50,000 per claimant and the need to consider spouses as a single claimant. View "Alves v. Weber" on Justia Law

Armando Ballesteros purchased a new car from Fairview Ford Sales, Inc. (Fairview) under a retail installment contract. The contract included an arbitration provision applicable to disputes between Ballesteros and Fairview. After discovering defects in the car that were not repaired, Ballesteros sued Fairview and Ford Motor Company (Ford), the car manufacturer, under the Song-Beverly Consumer Warranty Act. Both defendants moved to compel arbitration based on the contract's arbitration provision, but the trial court compelled arbitration only as to Fairview, denying the motion as to Ford.The trial court, San Bernardino County Superior Court, ruled that Ford, as a nonsignatory to the contract, could not compel arbitration. Ford appealed, arguing that Ballesteros's claims against it were intertwined with the contract and that equitable estoppel should apply to compel arbitration.The California Court of Appeal, First Appellate District, Division Five, reviewed the case. The court affirmed the trial court's decision, rejecting Ford's arguments. The appellate court concluded that Ballesteros's statutory claims against Ford were based on warranties that fell outside the contract with Fairview. The court emphasized that Ford, not being a party to the contract, could not invoke the arbitration provision. The court also noted that equitable estoppel did not apply because Ballesteros's claims did not rely on the contract's terms but on independent warranties recognized by the Song-Beverly Act. The court joined other appellate courts in disagreeing with the precedent set by Felisilda v. FCA US LLC, which had allowed a nonsignatory manufacturer to compel arbitration under similar circumstances. The court highlighted broader equitable concerns, stating that arbitration cannot be imposed on a signatory plaintiff’s claims against a nonsignatory without a clear showing of inequity, which Ford failed to demonstrate. View "Ballesteros v. Ford Motor Co." on Justia Law

A debt buyer, Velocity Investments, LLC, purchased consumer debt from Citibank, N.A., which had been charged off as a loss. Velocity sent a written communication to David Chai regarding the debt but failed to include the required notice of Chai’s right to request records, as mandated by the Fair Debt Buying Practices Act. Chai filed a lawsuit individually and on behalf of a putative class, seeking statutory damages under the Act, while disclaiming any concrete injury from the violation.The Santa Clara County Superior Court certified a class of individuals who received similar communications from Velocity. Velocity moved for judgment on the pleadings, arguing that Chai lacked standing because he admitted to no concrete injury. The trial court granted the motion, ruling that the Act requires a consumer to have suffered actual damage to sue. Chai appealed the decision.The California Court of Appeal, Sixth Appellate District, reviewed the case. The court held that the Fair Debt Buying Practices Act does not condition a consumer’s claim for statutory damages on the existence of actual damages. The court found that the Act allows consumers to seek statutory damages for violations of their rights under the Act, regardless of whether they suffered actual damages. The court reversed the trial court’s judgment, allowing Chai to pursue his claim for statutory damages. View "Chai v. Velocity Investments, LLC" on Justia Law

Richard Martinez, a licensed plumber, contracted with Gayle Jelley to construct a pool in her backyard for $26,900. Jelley made several payments totaling $9,000, but Martinez abandoned the project after partially completing the excavation and rebar installation. It was later discovered that Martinez's contractor's license had expired before the project began. The Department of Consumer Affairs, Contractors State Licensing Board (CSLB) confirmed that Martinez had never held a valid contractor's license and had previously received three administrative citations for unlicensed contracting.The People charged Martinez with grand theft, acting as a contractor without a license, requiring an excessive downpayment, and unlawfully receiving payments exceeding the work performed. Martinez was arraigned on December 9, 2021, and later filed a motion to dismiss based on a violation of his speedy trial rights, citing a four-and-a-half-year delay in prosecution. He argued that the delay resulted in the loss of key witnesses and evidence, causing actual prejudice to his defense.The Superior Court of Riverside County granted Martinez's motion to dismiss, citing the prosecution's lack of effort to arrest Martinez after the complaint was filed. The People appealed the decision, arguing that the trial court applied an incorrect legal standard by not requiring Martinez to demonstrate actual prejudice.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. The court held that Martinez failed to affirmatively demonstrate actual prejudice resulting from the delay, as required under state constitutional law. The court also noted that the trial court did not conduct the necessary analysis of the four factors required to determine a federal speedy trial violation for the misdemeanor charges. The appellate court reversed the trial court's decision in part and remanded the case with directions to conduct the proper analysis for the federal speedy trial claim on the misdemeanor charges and to deny the motion to dismiss on the felony charge. View "People v. Martinez" on Justia Law