Justia California Court of Appeals Opinion Summaries

After plaintiff lost an investment property to foreclosure, he filed suit against the lender and its assignee, as well as the loan servicer, alleging breach of contract, wrongful foreclosure and three fraud claims. Plaintiff's claims were based on his assertion that, before the parties executed the credit agreement and deed of trust securing it in 2005, the lender made a verbal commitment that, at the end of the 10-year term, plaintiff could refinance or re-amortize the loan with a new 20-year repayment period.The Court of Appeal affirmed the trial court's judgment, holding that the verbal agreement to refinance or reamortize plaintiff's loan is subject to the statute of frauds and is unenforceable on that ground. Furthermore, the oral agreement is too indefinite to be enforceable. Therefore, plaintiff's allegations are insufficient to state a breach of contract claim. The court also held that plaintiff's allegations are the very sort of general and conclusory allegations that are insufficient to support a fraud claim, promissory or otherwise; because the alleged oral agreement is not an enforceable contract, its breach cannot support a claim of wrongful foreclosure; and plaintiff has not shown how he can amend to cure the defects in the complaint. View "Reeder v. Specialized Loan Servicing LLC" on Justia Law

Saw worked for Avago’s Malaysian subsidiary and could acquire ordinary shares and stock options of Avago stock under a management shareholders' agreement governed by the laws of Singapore. The agreement allowed Avago to repurchase shares and options at fair market value should an employee be terminated “for any reason whatsoever” within five years from the date of purchase. After Saw’s position was eliminated in 2009, Avago repurchased his equitable interest. Saw sued Avago’s subsidiary for wrongful termination and obtained a favorable judgment in Malaysia. Saw separately sued Avago in San Mateo County, asserting that Avago breached the shareholders' agreement by relying on an unlawful termination to repurchase his shares.The court of appeal affirmed summary judgment in favor of Avago. Saw is not entitled to any relief under Singapore law. The shareholders' agreement's choice of law provision requires the application of the substantive law of Singapore. Whether his termination was lawful or unlawful under Malaysian law has no bearing on Avago’s contractual right to repurchase shares acquired by a former employee. Saw’s breach of contract claim fails as a matter of law under the express terms of the shareholders' agreement. Saw has no viable cause of action under an implied duty of good faith. View "Saw v. Avago Technologies, Ltd." on Justia Law

The lack of initials next to a jury waiver contained in an arbitration agreement, even though the drafter included lines for the initials, is of no legal consequence in this case.After plaintiff filed an employment-related suit against BaronHR, BaronHR moved to compel arbitration. The Court of Appeal held that the trial court erred in denying the motion to compel arbitration because the language of the agreement between the parties establishes their mutual assent to submit employment-related disputes to arbitration and to waive the right to a jury trial. Furthermore, plaintiff does not dispute that he signed the agreement and thus he is deemed to have assented to its terms. The court stated that the fact that plaintiff did not also initial the subject paragraph does not provide a basis for concluding the parties did not mutually assent to the arbitration agreement. View "Martinez v. BaronHR, Inc." on Justia Law

A "subtle" question concerning entitlement to attorney fees raised by this appeal was one of first impression for the Court of Appeal. In a separate lawsuit filed at Superior Court, plaintiffs obtained a judgment for breach of contract, including an award of attorney fees, against certain entities not parties to the present suit. Plaintiffs filed the present enforcement action against defendants, seeking to hold them liable on the judgment as alter egos of the judgment debtors. Plaintiffs lost against one of the defendants, Steve Saleen (Steve). Steve moved for attorney fees under the contract; the court granted the motion and plaintiffs appeals. Plaintiffs contended this was not an action on the contract and, therefore, fees were unavailable under Civil Code section 1717. Instead, it was an enforcement action. They cited caselaw for the proposition that a judgment on the contract subsumes and extinguishes contractual rights. On the other hand, had plaintiffs included Steve as a defendant in the Superior Court suit, making the exact same alter ego allegations they made to the Court of Appeal, undoubtedly Steve would have been entitled to contractual attorney fees under the doctrine of reciprocity established by Civil Code section 1717 and Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (1979), even though he was not a signatory on the contract. The Court of Appeal concluded the timing of an alter ego claim (either pre- or postjudgment) was too arbitrary a consideration on which to base the right to attorney fees. "When a judgment creditor attempts to add a party to a breach of contract judgment that includes a contractual fee award, the suit is essentially 'on the contract' for purposes of Civil Code section 1717." The Court therefore agreed with Steve and affirmed judgment. View "MSY Trading Inc. v. Saleen Automotive, Inc." on Justia Law

The Private Attorney General Act (Labor Code 2698) allows an employee, as a proxy for state enforcement agencies, to sue an employer on behalf of herself and other aggrieved employees for Labor Code violations. When the parties have an arbitration agreement, California law blocks the employer from enforcing that agreement with respect to representative PAGA claims for civil penalties; the agreement may be enforceable with respect to other claims, including claims for victim-specific relief (like unpaid wages). Lime rents electric scooters. Olabi entered into an agreement to locate, recharge, and redeploy Lime's scooters. The agreement required the parties to arbitrate “any and all disputes,” including Olabi’s classification as an independent contractor but contained an exception for PAGA representative actions.Olabi sued, alleging Lime intentionally misclassified him and others as independent contractors, resulting in Labor Code violations; he included claims under the Unfair Competition Law and PAGA. Lime petitioned to compel arbitration, arguing Olabi was required to arbitrate independent contractor classification disputes and that the PAGA exception did not cover the unfair competition claim or the PAGA claim to the extent that Olabi sought victim-specific relief. Olabi voluntarily dismissed his unfair competition claim and disavowed any claim for victim-specific relief. The trial court denied Lime’s petition and granted Olabi leave to amend. The court of appeal affirmed. The language of the arbitration agreement broadly excludes PAGA actions View "Olabi v. Neutron Holdings, Inc." on Justia Law

In a prior appeal, the Court of Appeal vacated a default judgment entered in favor of plaintiff Airs Aromatics, LLC (Airs), concluding the trial court was without jurisdiction to award damages in excess of that demanded in Airs's complaint for breach of contract. The Court gave Airs the option on remand to proceed with a new default prove-up hearing seeking up to $25,000 in damages, or amend the complaint to state the full amount of damages sought. Selecting the first option, Airs received a default judgment awarding it $25,000 in damages, $33,849 in prejudgment interest, and $614 in costs. After the trial court denied its set-aside motion under Code of Civil Procedure section 663a, defendant CBL Data Recovery Technologies, Inc. (CBL) appealed the second default judgment, contending that Airs's failure to serve it with the default prove-up papers or a substitution of counsel form invalidated the judgment. In addition, CBL challenged the amount of damages awarded and the prejudgment interest award. Rejecting each of these contentions, the Court of Appeal affirmed the judgment. View "Airs Aromatics, LLC v. CBL Data Recovery Tech. Inc." on Justia Law

Defendant Navigators Specialty Insurance Company (Navigators) appealed a trial court order denying its special motion to strike under California’s anti-SLAPP statute. Plaintiff Trilogy Plumbing, Inc. (Trilogy) alleged that Navigators, as Trilogy’s insurer, gave instructions with which Trilogy did not agree to attorneys Navigators had retained to defend Trilogy and wrongfully negotiated settlements without Trilogy’s consent. Navigators contended the alleged conduct constituted protected activity under Code of Civil Procedure section 425.17 (e)(2) and, therefore, the trial court erred by denying the anti-SLAPP motion. After review, the Court of Appeal affirmed: the allegations challenged by the anti-SLAPP motion described Navigators’ mishandling of the claims process with regard to 33 different lawsuits involving Trilogy. While the alleged acts were generally connected to litigation, they did not include any written or oral statement or writing made in connection with an issue under consideration or review by a judicial body and therefore did not constitute protected activity under section 425.16. View "Trilogy Plumbing, Inc. v. Navigators Specialty Ins. Co." on Justia Law

Defendant ReadyLink Healthcare, Inc. (ReadyLink) was a nurse staffing company that placed nurses in hospitals, typically on a short-term basis. Plaintiff State Compensation Insurance Fund (SCIF) was a public enterprise fund created by statute as a workers' compensation insurer. Premiums that SCIF charged were based in part on the employer's payroll for a particular insurance year. SCIF and ReadyLink disputed the final amount of premium ReadyLink owed to SCIF for the 2005 policy year (September 1, 2005 to September 1, 2006). ReadyLink considered certain payments made to its nurses as per diem payments; SCIF felt those should have been considered as payroll under the relevant workers' compensation regulations. The Insurance Commissioner concurred with SCIF's characterization of the payments. A trial court rejected ReadyLink's petition for a writ of administrative mandamus to prohibit the Insurance Commissioner from enforcing its decision, and an appellate court affirmed the trial court's judgment. SCIF subsequently filed the action underlying this appeal, later moving for a judgment on the pleadings, claiming the issue of the premium ReadyLink owed for the 2005 policy year had been previously determined in the administrative proceedings, which was then affirmed after judicial review. The trial court granted SCIF's motion for judgment on the pleadings. On appeal, ReadyLink conceded it previously litigated and lost its challenge to SCIF's decision to include per diem amounts as payroll for the 2005 insurance year, but argued it never had the opportunity to challenge whether SCIF otherwise properly calculated the premium amount that it claims was due pursuant to the terms of the contract between the parties, or whether SCIF's past conduct, which ReadyLink alleged included SCIF's acceptance of ReadyLink's exclusions of its per diem payments from payroll in prior policy years and SCIF's exclusion of per diem amounts in paying out on workers' compensation claims filed by ReadyLink employees, might bar SCIF from being entitled to collect that premium amount under the contract. To this, the Court of Appeal concurred the trial court erred in granting SCIF's motion for judgment on the pleadings. Judgment was reversed, and the matter remanded for further proceedings. View "State Comp. Ins. Fund v. ReadyLink Healthcare, Inc." on Justia Law

After defending the general contractor in two construction defect actions, general liability insurer St. Paul Mercury Insurance Company (St. Paul) sought reimbursement of defense costs under an equitable subrogation theory against six subcontractors (defendants) that had worked on the underlying construction projects and whose contracts required them to defend the general contractor in suits involving allegations related to their work. After a bench trial, the court denied St. Paul’s claim. Relying on Patent Scaffolding Co. v. William Simpson Constr. Co., 256 Cal.App.2d 506, 514 (1967), the trial court concluded St. Paul had not demonstrated it was fair to shift all of the defense costs to defendants because their failure to defend the general contractor had not caused the homeowners to bring the construction defect actions. St. Paul argued this conclusion misconstrued the law governing equitable subrogation and therefore constitutes an abuse of discretion. To this, the Court of Appeal agreed: (1) a cause of action based on equitable subrogation allowed an insurer to step into the shoes of its insured and recover only what the insured would be entitled to recover from the defendants; and (2) the appropriate inquiry should have been whether defendants’ failure to defend the general contractor caused St. Paul to incur the defense costs, not whether that failure caused the underlying lawsuits. Judgment was reversed and the matter remanded to the trial court to grant judgment in St. Paul's favor and for a determination of defense costs each defendant owed. View "Pulte Home Corp. v. CBR Electric, Inc." on Justia Law

Plaintiff filed suit against defendant, alleging a common count claim for "money lent." The trial court found that plaintiff loaned defendant $874,708.44, which defendant never repaid. Defendant argued that the money came from entities controlled by plaintiff rather than from plaintiff himself.The Court of Appeal affirmed the trial court's judgment against defendant because defendant waived his defense of lack of capacity by failing to assert it at the earliest opportunity. The court also held that the trial court properly concluded that proof of an implied promise to repay was legally sufficient for plaintiff's common count claim. In this case, substantial evidence supported the trial court's finding that defendant made such an implied promise. Finally, defendant's statute of frauds argument is meritless. View "Rubinstein v. Fakheri" on Justia Law