Justia California Court of Appeals Opinion Summaries

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

Plaintiffs Matthew Matson and Matson SDRE Group, LLC purchased a deed of trust at a nonjudicial foreclosure sale. S.B.S. Trust Deed Network (SBS) was the trustee and Bank of Southern California, N.A. (BSC) was the beneficiary of the deed of trust. Matson, relying on a software application called PropertyRadar, believed that the deed of trust was in first position on the property. He purchased the deed of trust for $502,000 at the foreclosure auction, then learned that the lien was in second position, with a much lower fair market value than the price paid. Plaintiffs filed a first amended complaint against defendants for rescission of the sale and declaratory relief, relying on Matson's unilateral mistake of fact and the unconscionable price he paid for the deed of trust. The parties filed cross-motions for summary judgment. The court granted summary judgment for defendants. Plaintiffs appealed, but finding no reversible error, the Court of Appeal affirmed the judgment. View "Matson v. S.B.S. Trust Deed Network" on Justia Law

The Court of Appeal reversed the district court's grant of summary judgment in favor of Aetna. In plaintiff's first cause of action, plaintiff alleged that Aetna violated Health & Safety Code section 1371.4. In plaintiff's second cause of action, plaintiff alleged that Aetna breached an implied contract based on its prior dealing with Aetna by not paying for the emergency medical services it rendered to a patient covered by Aetna's health care service plan. The court held that there were triable issues of fact as to whether plaintiff provided and billed for emergency services and was entitled to reimbursement from Aetna. Accordingly, the court remanded for further proceedings. View "San Jose Neurospine v. Aetna Health of California, Inc." on Justia Law

Wanke, Industrial, Commercial, Residential, Inc. (Wanke) was a company that installed waterproofing systems. It sued Scott Keck and another of its former employees in 2008 for trade secret misappropriation after they left Wanke to form a competing business, WP Solutions. The parties entered into a stipulated settlement and later litigated Keck's alleged breach of that settlement agreement. To collect, Wanke filed a creditor's suit against third party AV Builder Corp. (AVB) to recover $109,327 that AVB owed WP Solutions in relation to five construction subcontracts. Following a bench trial, the court entered judgment in Wanke's favor for $83,418.94 after largely rejecting AVB's setoff claims. Invoking assignment principles, AVB contended: (1) Wanke lacked the ability to sue given judgment debtor WP Solutions's corporate suspension; (2) Wanke's suit was untimely under section 708.230 of the Code of Civil Procedure; and (3) the trial court erred in denying its request for warranty setoffs under section 431.70. Rejecting each of these contentions, the Court of Appeal affirmed the judgment View "Wanke, Industrial, Commercial, etc. v. AV Builder Corp." on Justia Law

Travelers won summary judgment in this duty-to-defend insurance dispute with its insured, KLA. The superior court concluded that the language of the commercial liability insurance policies, which covered claims for “malicious prosecution,” could not have created an objectively reasonable expectation that Travelers would defend a “Walker Process claim” against KLA. The Walker Process claim that KLA tendered to Travelers alleged that KLA had fraudulently procured a patent and used that patent to attempt to monopolize the market for a product. KLA argued that it was objectively reasonable for it to expect the “malicious prosecution” coverage in its policies to extend to this Walker Process claim. The court of appeal affirmed. Coverage language is construed as of the time of issuance of the policy, so the construction of that language cannot depend on the precise allegations made in a subsequent complaint. The history of prior litigation between the parties did not change the basis for this claim into one for malicious prosecution because there were no allegations of any legal proceedings involving the patent. View "Travelers Property Casualty Co. of America v. KLA-Tencor Corp." on Justia Law

The issue this case presented for the Court of Appeal's review centered on whether a binding arbitration clause in an insurance policy issued by plaintiff Philadelphia Indemnity Ins. Co., applied to a third party, defendant SMG Holdings, Inc. The policy had been issued to Future Farmers of America, which was holding an event inside the Fresno Convention Center. Future Farmers had licensed the use of the convention center from its property manager, SMG. As part of the license, Future Farmers agreed to obtain coverage for itself and to name SMG as an additional insured. Thereafter, Future Farmers obtained a policy from Philadelphia Indemnity, which provided coverage for “managers, landlords, or lessors of premises” as well as for any organization “as required by contract.” The policy also contained an arbitration clause for coverage disputes. During the Future Farmers event, an attendee was injured in the convention center parking lot. When the injured man sued SMG, which also managed the parking lot, SMG tendered its defense to Philadelphia under the policy. Philadelphia refused, believing SMG was not covered under the policy for an injury occurring in the parking lot. After two years, Philadelphia petitioned the trial court to compel arbitration against SMG. The trial court denied the petition, concluding no evidence was presented that the parties to the policy intended to benefit SMG, and Philadelphia was equitably estopped from claiming SMG was required to arbitrate the dispute. Philadelphia contended: (1) the trial court erred in determining SMG was neither a third party beneficiary of the policy, nor equitably estopped from avoiding the policy’s arbitration clause; (2) alternatively, the court erred in finding Philadelphia estopped from compelling SMG to arbitrate; and (3) the coverage dispute was encompassed by the arbitration clause and arbitration should be ordered. The Court of Appeal agreed SMG could be compelled to arbitrate. Judgment was reversed, the trial court's order vacated, and the trial court directed to order arbitration of the coverage dispute. View "Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc." on Justia Law

Plaintiff alleges she bought her Richmond home in 1973, refinanced her mortgage in 2005, and unsuccessfully applied for a loan modification in 2015. Plaintiff was not allowed to make payments in the interim and owed $20,000 in arrears. Plaintiff sought Chapter 13 bankruptcy relief. She was required to make monthly payments to cover her pre-petition mortgage arrears plus her regular monthly mortgage payments. Plaintiff failed to make her regular October 2016 mortgage payment. Defendant sought relief from the automatic bankruptcy stay. The bankruptcy court approved an agreement that she would pay the October and November payments over a period beginning in January 2017. Plaintiff claims defendant violated that agreement, that her attempts to make those payments failed, and that she was unable to contact the defendant’s “single point of contact” for foreclosure avoidance (Civil Code 2923.7) Defendant obtained relief from the bankruptcy stay and would not accept the January 2017 payment. At the time of the bankruptcy sale, plaintiff’s home was worth approximately $550,000; defendant sold the home for $403,000.The court of appeal reversed the dismissal of plaintiff’s claim that she should have been able to avoid foreclosure by tendering the amount in default (Civ. Code 2924c) and that it was unlawful for defendant also to demand payment on amounts subject to a confirmed bankruptcy plan and reversed the dismissal of the section 2923.7 claim but upheld the dismissal of breach of contract, negligence, and elder abuse claims. View "Williams v. 21st Mortgage Corp." on Justia Law