Justia California Court of Appeals Opinion Summaries

Plaintiff David Hester was a reality television star on “Storage Wars.” Plaintiff made the winning bid and purchased the contents of a self-storage unit at an auction held by defendant, Public Storage. Defendant learned it had mistakenly sold the goods about half an hour after the sale was complete. The unit’s occupant had paid his past due rent weeks before the auction, but defendant’s computer system incorrectly marked the unit for sale. Due to this error, defendant immediately rescinded the deal based on two documents plaintiff had signed that contained clauses allowing defendant to void the sale for any reason. Plaintiff claimed defendant’s rescission was invalid and sued for breach of contract and conversion, among other claims. Defendant moved for summary judgment on the contract and conversion claims on grounds it had properly voided the sale under the null and void clauses. The trial court granted defendant’s motion. Plaintiff appealed, arguing summary judgment was inappropriate because the null and void clauses were invalid because: (1) they were precluded by various statutes governing self-storage auction sales; and (2) he agreed to them under duress. After review, the Court of Appeal disagreed, and rejected plaintiff’s argument that defendant was required to file an unlawful detainer action to retake possession of the purchased goods after it rescinded the sale. View "Hester v. Public Storage" on Justia Law

Under a 2008 consignment agreement, Eloquence would consign jewelry and loose diamonds to HCC for resale. HCC was to send a monthly sales report of each item sold. Upon receipt of that report, Eloquence would prepare an invoice setting forth the payment due from HCC. The Agreement required HCC to pay the invoices within 30 days and provided for a bi-annual reconciliation of the inventory of consigned goods. Following a reconciliation, two invoices dated November 10, 2009, identified “items reported as missing” from an HCC store: 16 pieces of jewelry ($64085). Eloquence gave HCC a five-month extension for payment. Delivery of consigned goods to HCC continued for seven years, totaling $616,633.30 in sales invoices. In 2017, Eloquence sued HCC and its general partners, asserting “breach of written agreement” and “open book account” by failing to pay the November 2009 invoices, in the total amount of $64,085 and that it “furnished to HCC, at its request, on an open book account, merchandise of the agreed value of $64,085.The court of appeal affirmed summary judgment. Eloquence’s breach of contract cause of action time-barred because the agreement contemplated a series of discrete transactions each evidenced by a separate invoice. The doctrine of continuous accrual applies; the statute of limitations expired in May 2014. There was no agreement by the parties to enter into an open book accountt. View "Eloquence Corp. v. Home Consignment Center" on Justia Law

Under California law, the donor's intent controls the disposition of his or her gametic material upon death. Plaintiff appealed the trial court's judgment sustaining demurrers to her causes of action alleged against defendants. After plaintiff's husband entered into an irreversible coma, she arranged to extract his sperm in hopes of one day conceiving a child with it. Plaintiff stored the sperm in a tissue bank that ultimately came under the control of defendants, and, ten years later, when she requested the sperm, defendants disclosed that they could not locate it. Plaintiff filed suit, alleging contract and tort claims based on the loss of her ability to have a child biologically related to her deceased husband.The Court of Appeal affirmed the trial court's judgment, holding that the complaint failed to adequately plead facts supporting tort damages. In this case, plaintiff's tort causes of action are all premised on the loss of her ability to conceive with her deceased husband's sperm. However, the court held that the complaint failed to allege facts establishing that plaintiff was legally entitled to use her husband's sperm to conceive a child after he died. In this case, plaintiff's status as his spouse did not entitle her to conceive with his sperm; absent an affirmative showing that the husband intended to allow plaintiff to conceive with his sperm, plaintiff was not entitled to do so; and thus the complaint failed to allege that it was the husband's intent that his sperm be used for posthumous conception. Finally, the court held that plaintiff cannot recover emotional distress damages on her breach of contract cause of action. View "Robertson v. Saadat" on Justia Law

Teed promoted himself online as a real estate agent with “over 25 years of experience as a building contractor” with “an extensive background in historic restorations.” Moore believed that Teed was a general contractor. Moore toured homes that Teed had renovated and retained Teed as his agent. Moore bought a large San Francisco fixer-upper house for $4.8 million. The home was built in 1912 and was last updated in the 1950s. Moore borrowed significantly. Teed received a commission from the sale. Teed was not a licensed contractor; his team of contractors gutted large parts of the house and excavated the lot but the foundation was defective. After Moore became aware of the defects, he halted all work and engaged consultants, who concluded, despite Teed's strong resistance, that the foundation had to be torn out and replaced. Teed’s structural engineer agreed and privately apologized to Moore. Moore had paid about $265,000 of the $900,000 promised cost for Teed’s renovations. A jury awarded Moore his out-of-pocket expenses for replacing the foundation and benefit-of-the-bargain damages for the additional cost he incurred in obtaining the promised renovations. Conceding liability, Teed challenged the award. The court of appeal affirmed that benefit-of-the-bargain damages are available to fully compensate a plaintiff for all the detriment proximately caused by a fraudulent fiduciary’s actions and the award of statutory attorney fees and costs based on the jury’s special verdict finding that Teed violated the Contractors’ State License Law. View "Moore v. Teed" on Justia Law

In 2003, jury found E*Trade liable for trade secret misappropriation and for breach of a mutual nondisclosure agreement with Ajaxo. The jury awarded damages only for the breach of contract after the court granted a nonsuit on the issue of damages for trade secret misappropriation. On remand, in 2008, a jury found no net damages for unjust enrichment and awarded nothing. The court denied Ajaxo’s request to seek a reasonable royalty under the California Uniform Trade Secret Act (Civ. Code 3426-3426.11). On second remand, the court held a bench trial, declined to award any royalty, and awarded E*Trade its costs as the prevailing party.The court of appeal affirmed. The trial court did not abuse its discretion by declining to award any reasonable royalty despite the available evidence from which a reasonable royalty theoretically might have been derived, considering its findings on the evidence, application of apportionment principles from patent law, exclusion of expert testimony and analysis of Ajaxo’s royalty model, and treatment of the “Georgia-Pacific factors” for determining a royalty rate in intellectual property disputes. The trial court did not err in its prevailing party determination and costs award despite the practical effect of Ajaxo having already obtained full satisfaction of what became a separate, final judgment in its favor following the 2006 remittitur from the first appeal, including costs. View "Ajaxo, Inc. v. E*Trade Financial Corp." on Justia Law

North Edwards Water District (the District) selected Clark Bros., Inc. (Clark) as its general or direct contractor on a public works project to build an arsenic removal water treatment plant. Clark hired subcontractor Crosno Construction (Crosno) to build and coat two steel reservoir tanks. The subcontract contained a "pay-when-paid" provision that stated Clark would pay Crosno within a reasonable time of receiving payments from the District, but that this reasonable time "in no event shall be less than the time Contractor and Subcontractor require to pursue to conclusion their legal remedies against Owner or other responsible party to obtain payment . . . ." After Crosno completed most of its work, a dispute arose between the District and Clark halting the project. As Clark sued the District, Crosno sought to recover payments owed under the public works payment bond that Clark had obtained for the project. The issue this case presented for the Court of Appeal's review involved Crosno's claim against the bond surety, Travelers Casualty and Surety Company of America (Travelers). At issue was whether the pay-when-paid provision in Crosno's subcontract precluded Crosno from recovering under the payment bond while Clark's lawsuit against the District was pending. Relying on Wm. R. Clarke Corp. v. Safeco Ins. Co., 15 Cal.4th 882 (1997), the trial court found the pay-when-paid provision here unenforceable because it affected or impaired Crosno's payment bond rights in violation of Civil Code section 8122. With the facts largely undisputed, the court granted Crosno's motion for summary judgment and entered judgment in its favor for principal due plus prejudgment interest. Travelers argued the trial court misconstrued Wm. R. Clarke and erred in failing to enforce the pay-when-paid provision against the bond claim. After carefully considering the parties' arguments, the Court of Appeal agreed with the trial court's analysis and affirmed. View "Crosno Construction, Inc. v. Travelers Casualty etc." on Justia Law

House owns an organic farm, adjacent to the Property, formerly owned by Moller. In 2002, House entered into a six-year lease with Moller for 35 farmable acres, containing a renewal option and a right of first refusal. House converted the Property to certified organic status. In 2007, Moller, with no notice to House, agreed to sell the Property to Foss. Foss, a licensed real estate agent, prepared the agreement, which did not contain a fixed closing date. House became aware of the agreement, notified Foss about the right of first refusal, and sued Moller. While the lease remained in effect, Foss entered the Property and sprayed nonorganic herbicides, cut down trees, and altered the fencing. House sued Foss. Moller filed for bankruptcy. The Property was foreclosed on and sold to a third party in 2015.The trial court found Foss liable for inducing a breach of contract, intentionally interfering with House’s prospective economic advantage, conversion, trespass, and negligence and awarded compensatory damages of $1,669,705 and $1,000 in punitive damages. House sought attorney fees and costs. The court denied the motion. The court of appeal remanded for a determination of reasonable attorney fees under Code of Civil Procedure 1021.9, which refers to “any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock.” The damages award is supported by substantial evidence. View "Kelly v. House" on Justia Law

After plaintiff made four purchases of precious metals from defendants, he filed suit alleging that defendants misled him. Plaintiff, as trustee for the Dennison Family Trust, purchased the precious metals after seeing television commercials promoting such investments.The Court of Appeal held that the arbitration agreement does not clearly and unmistakably delegate authority to the arbitrator to decide unconscionability; the arbitration agreement is unconscionable based on lack of mutuality, limitations on defendants' liability, and the statute of limitations; and the court could not save the arbitration agreement by severing a single offending clause because the agreement is permeated with unconscionable terms. Accordingly, the court affirmed the trial court's judgment. View "Dennison v. Rosland Capital LLC" on Justia Law

In January 2017, plaintiffs Lori Dougherty and Julie Lee's 89-year-old father passed away while living in Somerford Place, an elder residential care facility owned and operated by defendants Roseville Heritage Partners, Somerford Place, LLC, Five Star Quality Care, Inc., and Five Star Quality Care-Somerford, LLC. In July 2017, plaintiffs sued defendants, alleging elder abuse and wrongful death based upon the reckless and negligent care their father received while residing in defendants’ facility. Defendants appealed the trial court’s denial of their motion to compel arbitration and stay the action, contending the arbitration agreement did not contain any unconscionable or unlawful provisions. Alternatively, defendants argued the court abused its discretion by invalidating the agreement as a whole, rather than severing the offending provisions. The Court of Appeal found the arbitration agreement at issue here was "buried within the packet at pages 43 through 45," and "[b]ased on the adhesiveness of the agreement, and the oppression and surprise present," the Court concluded the trial court properly found the Agreement was imposed on a “take it or leave it” basis and evinced a high degree of procedural unconscionability. Under the sliding scale approach, only a low level of substantive unconscionability was required to render the arbitration agreement unenforceable. Likewise, the Court concurred that the arbitration agreement was substantively unconscionable, "particularly given the accompanying evidence of procedural unconscionability." The Court found no abuse of discretion in the trial court's declination to sever the offending provisions of the agreement, rather than invalidate the entire agreement. View "Dougherty v. Roseville Heritage Partners" on Justia Law

Attorney Robert Reeve sued attorney Kenneth Meleyco to enforce a referral fee agreement after Reeve referred a client to Meleyco but Meleyco did not pay the referral fee. A jury found that Reeve was entitled to recover for breach of contract and also under a quantum meruit theory, and the trial court awarded Reeve prejudgment interest. Meleyco appealed, arguing among other things that Reeve could not recover for breach of contract because the client did not provide written consent to the arrangement, the quantum meruit claim was barred by the applicable statute of limitations, and Reeve was not entitled to prejudgment interest. The Court of Appeal determined Meleyco wrote a letter to the client explaining that the referral fee would not come from the client’s percentage of any settlement, and the client signed an acknowledgement at the bottom of the letter indicating that he received the letter and understood its contents. The client subsequently testified that his acknowledgement expressed his agreement that the referral fee could be paid to Reeve. The Court found the client’s written acknowledgement that he received and understood the letter did not constitute written consent to the referral fee agreement under former California Bar Rule of Professional Conduct 2-200, and the client’s subsequent testimony did not remedy the deficiency. The referral fee agreement was unenforceable as against public policy and Reeve could not recover for breach of contract. Furthermore, the Court agreed with Meleyco that Reeve’s quantum meruit claim was barred by the two-year limitations period. View "Reeve v. Meleyco" on Justia Law