Justia California Court of Appeals Opinion Summaries

The case involves a dispute over the enforceability of a noncompetition provision in an operating agreement following the partial sale of a business interest. Robert and Stephen Samuelian co-founded Life Generations Healthcare, LLC, and later sold a portion of their interest in the company. The new operating agreement included a noncompetition clause that the Samuelians later challenged in arbitration. The arbitrator found the provision invalid per se under California Business and Professions Code section 16600, which generally voids contracts restraining lawful professions, trades, or businesses.The Superior Court of Orange County reviewed the arbitrator's decision de novo and confirmed the award, agreeing that the noncompetition provision was invalid per se. The court also found that the Samuelians did not owe fiduciary duties to the company as minority members in a manager-managed LLC. The company and individual defendants appealed, arguing that the arbitrator applied the wrong legal standard and that the reasonableness standard should apply instead.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and concluded that the arbitrator had indeed applied the wrong standard. The court held that noncompetition agreements arising from the partial sale of a business interest should be evaluated under the reasonableness standard, not the per se standard. The court reasoned that partial sales differ significantly from the sale of an entire business interest, as the seller remains an owner and may still have some control over the company. Therefore, such noncompetition provisions must be scrutinized for their procompetitive benefits.The Court of Appeal reversed the trial court's judgment confirming the arbitration award and directed the trial court to enter an order denying the Samuelians' petition to confirm the award and granting the company's motion to vacate the entire award, including the portion awarding attorney fees and costs. View "Samuelian v. Life Generations Healthcare, LLC" on Justia Law

Jose Medina purchased a used car from St. George Auto Sales in December 2014, with financing from Alaska Federal Credit Union. Medina later discovered that the car had extensive engine repairs that were not disclosed to him at the time of purchase. He experienced multiple issues with the car, including the check engine light activating several times shortly after the purchase. Despite repeated repairs, the problems persisted. In December 2015, Medina learned from a different dealership that the car had significant pre-existing engine issues, which led him to believe that St. George had concealed this information.Medina filed a lawsuit in August 2018 against St. George and Alaska Federal, claiming a violation of the Consumer Legal Remedies Act (CLRA). The defendants argued that the claim was barred by the three-year statute of limitations. They contended that Medina should have been aware of the issues by March 2015 due to the repeated activation of the check engine light. The Superior Court of San Bernardino County overruled the defendants' demurrer and denied their motion for summary judgment, finding that there were factual questions about when Medina should have suspected the harm. The jury ultimately found in favor of Medina, concluding that he did not have sufficient notice of the claim until later.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court held that the discovery rule applies to the CLRA’s statute of limitations, meaning the limitations period begins when the plaintiff discovers or should have discovered the basis for the claim. The court found no error in the trial court’s rulings on the demurrer, summary judgment, or nonsuit motions, as there were factual questions about when Medina should have known about the engine issues and the defendants' potential wrongdoing. The judgment in favor of Medina was affirmed. View "Medina v. St. George Auto Sales, Inc." on Justia Law

J.M., an 11-year-old student, filed a class action lawsuit through his guardian ad litem against Illuminate Education, Inc., an education consulting business. J.M. alleged that Illuminate obtained his personal and medical information from his school to assist in evaluating his educational progress. Illuminate promised to keep this information confidential but negligently maintained its database, leading to a data breach where a hacker accessed the information. Illuminate delayed notifying J.M. and other victims about the breach for five months, during which J.M. began receiving unsolicited mail and phone calls.The trial court sustained Illuminate's demurrer, concluding that Illuminate did not fall within the scope of the Confidentiality of Medical Information Act (CMIA) or the Customer Records Act (CRA) and that J.M. failed to state a cause of action. J.M. filed a proposed second amended complaint with additional facts and a motion for reconsideration. The trial court reviewed the amended pleadings but maintained that J.M. had not stated a cause of action and could not amend to do so, thus sustaining the demurrer without leave to amend and entering judgment for Illuminate.The California Court of Appeal, Second Appellate District, reviewed the case and concluded that Illuminate falls within the scope of the CMIA and CRA. The court found that J.M. stated sufficient facts to support causes of action under both statutes. The court held that the trial court abused its discretion by sustaining the demurrer without leave to amend. The judgment of dismissal was reversed, and the case was remanded to the trial court, allowing J.M. to file an amended complaint with additional facts. View "J.M. v. Illuminate Education, Inc." on Justia Law

Farzam Salami received emergency services at Los Robles Regional Medical Center on three occasions in 2020. He signed a conditions of admission contract agreeing to pay for services rendered, as listed in the hospital's chargemaster. Los Robles billed him for these services, including a significant emergency services fee (EMS fee). Salami paid part of the discounted bill but disputed the EMS fee, claiming it covered general operating costs rather than services actually rendered. He argued that had he known about the EMS fee, he would have sought treatment elsewhere.Salami sued Los Robles in December 2021 for breach of contract and declaratory relief. The trial court sustained Los Robles's demurrer to the first amended complaint (FAC), finding that Salami did not allege he performed his duties under the contract or that Los Robles failed to perform its duties. The court also found that the breach of contract claim could not be cured by amendment. Salami was granted leave to amend to assert claims under the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). In his third amended complaint (TAC), Salami alleged that Los Robles failed to disclose the EMS fee adequately.The Court of Appeal of the State of California, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that Los Robles had no duty to disclose the EMS fee beyond including it in the chargemaster. The court referenced recent cases, including Moran v. Prime Healthcare Management, Inc., which held that hospitals are not required to provide additional signage or warnings about EMS fees. The court concluded that Los Robles complied with its statutory and regulatory obligations, and Salami's claims under the UCL and CLRA failed as a result. The judgment in favor of Los Robles was affirmed. View "Salami v. Los Robles Regional Medical Center" on Justia Law

Plaintiff Mark Coziahr filed a class action against Otay Water District, alleging that Otay's tiered water rates for single-family residential customers violated Section 6(b)(3) of Proposition 218, which mandates that property-related fees not exceed the proportional cost of the service attributable to the parcel. The trial court certified the class and found that Otay failed to meet its burden of demonstrating compliance with Section 6(b)(3). In the remedy phase, the court awarded an estimated refund of approximately $18 million, with monthly increases until Otay imposed compliant rates. Otay appealed the liability decision and damages, while Coziahr appealed only as to damages.The Superior Court of San Diego County found that Otay's tiered rates were based on non-cost objectives like conservation and did not correlate with the actual cost of providing water service. The court determined that Otay's reliance on peaking factors and adherence to industry standards were insufficient to justify the tiered rates. The court also found that Otay discriminated against single-family residential customers by charging them more for water than other customer classes without a cogent reason. The court rejected Otay's peaking factor analysis and Mumm's independent analysis as flawed and unsupported by the record.The California Court of Appeal, Fourth Appellate District, Division One, affirmed the trial court's liability determination, holding that Otay did not establish its tiered rates complied with Section 6(b)(3). The court found that Otay's evidence did not withstand independent review and that the trial court properly applied the principles from Capistrano and Palmdale. However, the appellate court reversed the refund amount, finding the trial court's calculations unreasonable due to reliance on projected data and a proxy from another case. The matter was remanded for a new trial on the refund amount, including monthly increases and prejudgment interest. The judgment was otherwise affirmed. View "Coziahr v. Otay Wat. Dist." on Justia Law

The case involves Leah Lorch, who filed a lawsuit against Kia Motors America, Inc. The case was initially assigned to Judge Robert C. Longstreth for all purposes. However, due to Judge Longstreth's unavailability, the case was reassigned to Judge Timothy B. Taylor. Upon learning of this reassignment, Lorch's counsel filed a peremptory challenge against Judge Taylor under section 170.6 of the Code of Civil Procedure, asserting that Judge Taylor was prejudiced against Lorch. However, Judge Taylor denied the challenge, ruling it was untimely under the master calendar rule. The trial proceeded, resulting in a defense verdict in favor of Kia Motors.The Superior Court of San Diego County denied Lorch's peremptory challenge, ruling it was untimely under the master calendar rule. The court also refused to stay the trial, and Judge Taylor immediately began a two-day jury trial, which resulted in a defense verdict and judgment in favor of Kia Motors. Lorch then filed a petition within the statutory 10-day period, contending that her peremptory challenge was timely because it was filed before the trial started. She sought to vacate Judge Taylor’s orders denying her section 170.6 challenge and contended that all of Judge Taylor’s subsequent orders, as well as the judgment, were void for lack of jurisdiction.The Court of Appeal, Fourth Appellate District Division One State of California, held that Lorch’s section 170.6 challenge was timely filed before the commencement of the trial and rejected Kia’s laches argument. The court also concluded that the Superior Court of San Diego County's local rule, which purports to provide any superior court judge with the power to act as a master calendar department for purposes of assigning cases for trial, is inconsistent with section 170.6 and case law interpreting the statute. The court granted the petition with directions to vacate the void orders and judgment entered by Judge Taylor after denying the peremptory challenge. View "Lorch v. Super. Ct." on Justia Law

In this case, plaintiffs Brandi Stiles and Abel Gorgita purchased a 2011 Kia Optima in April 2013. The car, manufactured and distributed by Kia Motors America, Inc., was sold with express warranties still in effect from the original sale. However, the car had serious defects, including issues with the transmission, electrical system, brakes, engine, suspension, and steering. Despite multiple attempts, Kia was unable to repair these defects. The plaintiffs argued that Kia failed to replace the car or make restitution as required under the Song-Beverly Consumer Warranty Act.The trial court sustained Kia's demurrer, arguing that the remedies sought by the plaintiffs under the Song-Beverly Act only apply to new motor vehicles. The court relied on a previous case, Rodriguez v. FCA US, LLC, which held that a used motor vehicle with an unexpired warranty is not a "new motor vehicle" under the Song-Beverly Act. The court rejected another case, Jensen v. BMW of North America, Inc., which held that a previously owned motor vehicle with an unexpired warranty qualifies as a "new motor vehicle" under the Song-Beverly Act.The Court of Appeal of the State of California Second Appellate District Division Six reversed the trial court's decision. The court held that a previously owned motor vehicle purchased with the manufacturer’s new car warranty still in effect is a “new motor vehicle” as defined by section 1793.22, subdivision (e)(2) of the Song-Beverly Act. Thus, the replace or refund remedy of section 1793.2, subdivision (d)(2) applies. The court rejected Kia's arguments and affirmed the interpretation of the Song-Beverly Act in Jensen v. BMW of North America, Inc. The court also modified the opinion to clarify the interpretation of the implied warranty provisions. View "Stiles v. Kia Motors America, Inc." on Justia Law

A Lyft driver, Abdu Lkader Al Shikha, was attacked by a passenger who had a criminal record. Al Shikha sued Lyft for negligence, arguing that the company should conduct criminal background checks on all passengers, not just drivers. The trial court granted Lyft's motion for judgment on the pleadings, concluding that Lyft had no legal duty to conduct background checks on passengers.Al Shikha appealed, but the Court of Appeal of the State of California Second Appellate District Division Three affirmed the trial court's decision. The court found that Al Shikha failed to establish that Lyft's legal duty to its drivers extends to conducting criminal background checks on all riders. The court reasoned that such a duty would be highly burdensome and would not necessarily prevent violent attacks on drivers. The court also noted that the foreseeability of a passenger attacking a driver was not sufficiently high to warrant imposing this duty on Lyft.The court further noted that imposing a duty on Lyft to conduct criminal background checks on all passengers would raise significant concerns about consumer privacy and the potential for discrimination. The court concluded that Al Shikha's complaint failed to allege facts demonstrating that the type of harm he suffered was highly foreseeable, or that the failure to conduct criminal background checks on all passengers is sufficiently likely to result in a violent, unprovoked attack on a driver. View "Shikha v. Lyft, Inc." on Justia Law

In April 2013, Brandi Stiles and Abel Gorgita purchased a 2011 Kia Optima, which was manufactured and distributed by Kia Motors America, Inc. At the time of purchase, some of Kia's original warranties were still in effect, including the basic and drivetrain warranties. The car developed serious defects covered by the warranties, including issues with the transmission, electrical system, brakes, engine, suspension, and steering. Despite multiple attempts, Kia was unable to repair the defects. Stiles and Gorgita alleged that Kia failed to replace the car or make restitution as required under the Song-Beverly Consumer Warranty Act.Kia demurred to the first amended complaint, arguing that the remedies sought under the Song-Beverly Act apply only to new motor vehicles, and the car purchased by Stiles and Gorgita was not a "new motor vehicle" as defined in the Act. The trial court sustained Kia's demurrer, relying on a previous case, Rodriguez v. FCA US, LLC, which held that a used motor vehicle with an unexpired warranty is not a "new motor vehicle" under the Song-Beverly Act.The Court of Appeal of the State of California Second Appellate District Division Six reversed the trial court's decision. The court held that a previously owned motor vehicle purchased with the manufacturer’s new car warranty still in effect is a “new motor vehicle” as defined by the Song-Beverly Act. Therefore, the replace or refund remedy of the Act applies. The court rejected Kia's argument that the Act's definition of a "new motor vehicle" should be limited to vehicles that have never been previously sold to a consumer and come with full express warranties. The court also rejected Kia's argument that Stiles and Gorgita's interpretation of the Act conflicts with its implied warranty provisions. View "Stiles v. Kia Motors America, Inc." on Justia Law

In this case, the plaintiff, Joseph Gazal, donated over $1 million to purchase a car and a home for a destitute family. He was inspired to make this donation after hearing a homily delivered by defendant Carlos Echeverry, a deacon at his church. Gazal brought a lawsuit against Echeverry and his wife, Jessica Echeverry, as well as SOFESA, Inc., a nonprofit founded and led by Jessica Echeverry. Gazal claimed he was deceived into believing the car and house would be purchased for and titled to the destitute family, when in fact they were bought and titled to SOFESA.The defendants filed a special motion to strike the complaint under the anti-SLAPP (strategic lawsuit against public participation) statute, asserting that the homily and following conversations were protected speech. The trial court denied the motion, finding that the complaint did not rest on protected speech, but rather on private conduct and speech not directed at a wide public audience. Additionally, the court found that the causes of action arose from further communications that took place weeks after the homily.On appeal, the Court of Appeal of the State of California Second Appellate District Division Eight affirmed the trial court's decision. The court held that while the homily could be considered protected speech, the plaintiff's claims did not arise from the homily but rather from the alleged misconduct that occurred after its delivery. The court also found that the private discussions following the homily did not qualify for anti-SLAPP protection as they did not contribute to a public conversation on the issue of homelessness. Furthermore, the court denied a motion for sanctions filed by the plaintiff. View "Gazal v. Echeverry" on Justia Law