Justia California Court of Appeals Opinion Summaries

Amazon fulfills orders for products sold by third-party merchants through a program it calls “Fulfillment by Amazon” (FBA). According to the First Amended Complaint (FAC), the state agency responsible for collecting sales and use tax is the California Department of Tax and Fee Administration (DTFA) has historically not collected from Amazon sales and use taxes for products sold through the FBA program.   Plaintiff filed a taxpayer action under section 526a seeking a declaration that the DTFA “has a mandatory duty to assess and collect” sales and use tax specifically from Amazon for products sold through the FBA program. The DTFA and its Director and the Amazon entities that Plaintiff named in his FAC as Real Parties in Interest all demurred to the FAC. The trial court sustained Respondents’ demurrers without leave to amend.   The Second Appellate District affirmed the trial court’s order sustaining Respondents’ demurrers. The court explained that no statute or regulation conclusively establishes that the DTFA must pursue Amazon for sales and use taxes related to FBA transactions. The language of Revenue and Taxation Code section 6015, subdivision (a) makes it clear that there may be multiple “persons” who the DTFA may regard as “retailers” for the purposes of a single transaction. The statutory framework of the Sales and Use Tax Law and the statutes vesting the DTFA with authority to administer that statutory framework led the court to conclude that whether a taxpayer is a retailer for purposes of the Sales and Use Tax Law is a discretionary determination and not a ministerial task. View "Grosz v. Cal. Dept. of Tax & Fee Administration" on Justia Law

Shusha, Inc., dba La Cava (La Cava) appeals from the judgment of dismissal entered after the trial court sustained without leave to amend the demurrer filed by Century-National Insurance Company (Century-National) to La Cava’s first amended complaint. La Cava sued Century-National for breach of an insurance contract and related claims after Century-National denied coverage for La Cava’s lost business income as a result of its suspension of restaurant operations in March 2020 due to the COVID-191 pandemic and associated government shutdowns.   On appeal, La Cava contended the trial court erred in concluding the alleged presence of the COVID-19 virus in its restaurant did not constitute “direct physical loss of or damage to” the restaurant necessary for coverage under the terms of the policy at issue. La Cava also argued Century-National acted in bad faith by summarily denying coverage without investigating La Cava’s claim.   The Second Appellate District reversed the trial court’s order and remanded for the trial court to vacate its order sustaining the demurrer without leave to amend and to enter a new order overruling the demurrer. The court held that La Cava’s allegations that contamination by the COVID-19 virus physically altered its restaurant premises were sufficient to withstand demurrer. The court explained that Century-National’s denial of coverage just three weeks after La Cava tendered its claim and in the earliest days of our understanding of the novel COVID-19 virus, cannot be deemed as a matter of law to have been made in good faith with reasonable grounds. View "Shusha, Inc. v. Century-National Ins. Co." on Justia Law

Petitioners Geoff Cole and Admiral’s Experience, Inc. sought a writ of mandate to compel the trial court to calendar their timely motion for summary judgment for a hearing before the start of trial. The Court of Appeal notified the parties it was considering issuing a peremptory writ in the first instance (Palma v. U.S. Industrial Fasteners, Inc., 36 Cal.3d 171(1984)), and read and considered the informal response and request for judicial notice from real party in interest Matt Zeiner (Zeiner). Petitioners also field a reply brief, which Zeiner requested to strike. In 2018, a dispute arose between petitioners and Zeiner after a trailer petitioners rented from Zeiner was destroyed. In January 2019, Zeiner initiated the underlying lawsuit against petitioners seeking to recover for the loss of the trailer. The Court of Appeal granted the request for judicial notice, denied Zeiner’s request to strike the reply brief, and concluded that petitioners were entitled to peremptory writ relief. The Court published its decision to provide guidance on the deadline for filing a summary judgment motion that is served electronically. View "Cole v. Super. Ct." on Justia Law

Doe alleges that she was sexually assaulted by a massage therapist during a massage at a San Rafael Massage Envy retail location. She filed suit against the Arizona-based franchisor that licenses the “Massage Envy” brand name (MEF), and the independently owned San Rafael franchise where the assault allegedly occurred. MEF moved to compel arbitration on the basis of a “Terms of Use Agreement” presented to Doe when she checked in for a massage she had booked at the franchise location. The trial court concluded that there was no agreement to arbitrate between Doe and MEF.The court of appeal affirmed, rejecting MEF’s argument that the “Terms of Use Agreement,” which was available to Doe via a hyperlink on the electronic tablet she was given at the franchise, was a valid and enforceable “clickwrap” agreement of the sort that courts routinely enforce. Doe did not have reasonable notice that she was entering into any agreement with MEF, much less notice of the terms of the agreement. The transaction was nothing like the typical transactions in which clickwrap agreements are used; Doe went to a physical location, where she was already a member, and was handed a tablet to check in for a massage. View "Doe v. Massage Envy Franchising, LLC" on Justia Law

Monterey is an independent public agency responsible for analyzing Monterey County's water resources. Cal-Am is an investor-owned water utility providing water to over 100,000 residents on the Monterey Peninsula. Marina, a public agency, provides water for the City of Marina and neighboring Monterey Peninsula communities. In 1995 the State Water Resources Control Board ordered Cal-Am to stop drawing water from the Carmel River and develop an alternate water supply. In 2009 Marina, Monterey, and Cal-Am agreed to develop and construct a regional desalinization project to extract brackish water from beneath Monterey Bay, purify it, and deliver it to consumers. In 2010-2011, the parties entered into several agreements. The project was never built. The parties engaged in negotiation and mediation, ending in January 2012 without resolution.In September 2012, Cal-Am submitted a claim under the California Government Claims Act. Litigation followed. In 2019, the trial court entered summary adjudication against Monterey, finding that a negligence cause of action was barred by the two-year statute of limitations and against Cal-Am under the Government Claims Act. The court of appeal reversed. The trial court erred in finding that the “harm” accrued in 2010. There were triable issues of fact as to express waiver and as to the applicability of alternatives to the Claims Act. View "California-American Water Co. v. Marina Coast Water Districtw" on Justia Law

Plaintiff-appellant Bernell Beco filed suit against his former employer, defendant Fast Auto Loans, Inc. (Fast Auto) alleging 14 causes of action relating to the termination of his employment. Plaintiff alleged causes of action under with), including claims under the California Fair Employment and Housing Act (FEHA), numerous wage and hour violations under the Labor Code, wrongful termination, unfair competition, and additional tort claims. Fast Auto moved to compel arbitration, arguing that Beco had signed a valid arbitration agreement at the time he was hired. The trial court found the agreement unconscionable to the extent that severance would not cure the defects and declined to enforce it. After its review, the Court of Appeal agreed with the trial court that the agreement was unconscionable, and further rejected Fast Auto’s argument that the arbitrator, not the court, should have decided the issue of unconscionability. Additionally, because the agreement included numerous substantively unconscionable provisions, the appellate court found no abuse of discretion in the trial court’s decision not to sever them. View "Beco v. Fast Auto Loans, Inc." on Justia Law

Plaintiff Thomas Thai and defendant Newton Tran were partners in Richmond City Center, LP et al. (Richmond). Plaintiff agreed to sell defendant his 20.5 percent interest in Richmond. The parties signed a sales agreement in April 2019, in which plaintiff assigned defendant his interest in Richmond. A few months after the sales agreement was executed, plaintiff filed the underlying lawsuit against defendant, generally complaining that defendant still owed a portion of the purchase price, and asserted breach of contract and fraud claims. Defendant filed a cross-complaint against plaintiff, seeking declaratory relief, reformation, and rescission. Plaintiff issued two subpoenas: (1) a Deposition Subpoena for Personal Appearance and Production of Documents to Ha Mach, Richmond’s property manager; and (2) a Deposition Subpoena for Production of Business Records to Tien Van, Richmond’s accountant. Both subpoenas sought Richmond’s consumer records, so plaintiff served Richmond with a notice to consumer for each subpoena per California Code of Civil Procedure section 1985.3. Richmond served objections to each subpoena. Neither Mach nor Van produced any records due to Richmond’s objections. Nearly two months after Richmond served the objections, plaintiff filed motions to compel Mach and Van to comply with the subpoenas and produce the requested records under section 2025.480. Plaintiff also requested sanctions against Richmond and its attorneys. Defendant opposed the motions, but Richmond did not. The trial court granted the motions and awarded plaintiff $1,245 in sanctions against Richmond and its attorneys. Richmond appealed, arguing: (1) plaintiff’s motions to compel were brought under the wrong section of the Code of Civil Procedure and were untimely; and (2) even if the motions were timely, sanctions were improper because it did not oppose the motions. The Court of Appeal agreed with defendant’s first argument and found the trial court erred by granting the motions: after the twenty-day deadline expires, the subpoenaing party cannot move to enforce the subpoena over the objection through a motion to compel under section 2025.480, which has a 60-day deadline. View "Thai v. Richmond City Center, L.P." on Justia Law

On engaging services from Pacific Fertility Center, the plaintiffs signed “ ‘Informed Consent and Agreement to Perform Egg Cryopreservation” forms, providing that medical malpractice disputes were subject to arbitration. The plaintiffs signed separate arbitration agreements. Chart, which manufactures Pacific’s cryogenic storage tanks, and Praxair, which sold those tanks to Pacific and assisted with installation, were not signatories to either the informed consent or arbitration agreements.Following the failure of Tank Four, the plaintiffs in 54 coordinated cases filed suit. As to Chart and Praxair, the complaint alleged negligent failure to recall the tank, strict products liability (failure to warn, manufacturing defect, and design defect based on both the consumer expectations test and the risk-utility test), general negligence, and violation of the Unfair Competition Law. After the plaintiffs agreed to arbitrate their claims against Pacific, Chart and Praxair moved to compel arbitration, citing equitable estoppel. The court of appeal affirmed the denial of their motions. The plaintiffs’ claims are not premised on, nor did they arise out of, the plaintiffs’ fertility services agreements with Pacific. The issue of comparative fault and joint liability on certain issues does not inform the equitable estoppel analysis; the joint liability is not based on the same or similar legal theories and/or facts that underlie the obligations under the Pacific contracts. View "Pacific Fertility Cases" on Justia Law

Plaintiff sued Farmers New World Life Insurance Company (Defendant or Farmers) for breach of contract, breach of the covenant of good faith and fair dealing, and punitive damages in connection with a policy insuring the life of her ex-husband. The trial court granted summary judgment for Defendant on those claims, concluding it was undisputed that the ex-husband remained the owner of the policy until he died, and that he had changed the beneficiaries on the policy, reducing his ex-wife’s interest from 100 percent to 25 percent.   The Second Appellate District reversed, finding that the trial court failed to consider the terms of a divorce decree affecting ownership of the policy, and because Defendant’s agent repeatedly assured Plaintiff, up to and after the ex-husband’s death, that Plaintiff remained the sole beneficiary. Therefore, the court concluded disputed issues of material fact prevent summary judgment. View "Randle v. Farmers New World Life Insurance Co." on Justia Law

Plaintiff sued the City for its negligence in maintaining the City-owned sidewalk in a dangerous condition. The City moved for summary judgment on the ground that the sidewalk was not a “dangerous condition”. Although the hearing was not transcribed, the trial court concluded the hearing by orally granting the City’s motion for summary judgment. Just four minutes after the summary judgment hearing concluded, Plaintiff’s counsel sent the City an email purporting to accept the City’s 998 offer. The City objected to Plaintiff’s attempt to accept its 998 offer after the trial court had ruled on its summary judgment motion. The trial court entered judgment for the City, implicitly ruling that Plaintiff’s acceptance of the City’s 998 offer was inoperative. Plaintiff filed a timely notice of appeal of the May 7, 2021 judgment.   At issue on appeal is whether a 998 offer automatically expires when a trial court orally grants the offeror’s summary judgment motion. The Second Appellate District affirmed. The court explained that the trial court properly concluded that the City’s 998 offer expired by the time plaintiff purported to accept it. Like any other contractual offer, a 998 offer is not accepted until that acceptance is communicated to the offeror. Here, because Plaintiff did not communicate her acceptance of the City’s 998 offer until after the trial court orally granted summary judgment to the City, the acceptance was not effective as there was no longer any operative 998 offer to accept. View "Trujillo v. City of L.A." on Justia Law