Justia California Court of Appeals Opinion Summaries

Nielsen Contracting, Inc. and T&M Framing, Inc. (collectively Nielsen) sued several entities (defendants) alleging these entities fraudulently provided workers' compensation policies to Nielsen that were illegal and contained unconscionable terms. Defendants moved to compel arbitration and stay the litigation under an arbitration provision in one defendant's contract, titled Reinsurance Participation Agreement (RPA). Nielsen opposed the motion, asserting the arbitration provision and the provision's delegation clause were unlawful and void. After briefing and a hearing, the trial court agreed and denied defendants' motion. Defendants appealed, arguing: (1) the arbitrator, and not the court, should decide the validity of the RPA's arbitration agreement under the agreement's delegation clause; and (2) if the court properly determined it was the appropriate entity to decide the validity of the delegation and arbitration provisions, the court erred in concluding these provisions are not enforceable. The Court of Appeal rejected these contentions and affirmed. View "Nielsen Contracting, Inc. v. Applied Underwriters, Inc." on Justia Law

Plaintiff Rae Weiler sought a declaration that defendants Marcus & Millichap Real Estate Investment Services, Inc., et al., had to either: (1) pay plaintiff’s share of the costs in the previously ordered arbitration; or (2) waive their contractual right to arbitrate the underlying claims and allow them to be tried in the superior court. Plaintiff and her husband allegedly lost more than $2 million at the hands of defendants. She sued for breach of fiduciary duty, negligence and elder abuse claims. After being ordered to arbitration and pursuing her claims in that forum for years, plaintiff asserted she could no longer afford to arbitrate. According to plaintiff, if she had to remain in arbitration and pay half of the arbitration costs (upwards of $100,000) she would be unable to pursue her claims at all. Plaintiff initially sought relief from the arbitrators (pursuant to Roldan v. Callahan & Blaine 219 Cal.App.4th 87 (2013)); they ruled it was outside their jurisdiction, and directed her to the superior court. So, plaintiff filed this declaratory relief action in the superior court, again seeking relief under Roldan. The Court of Appeal concluded, based primarily on Roldan, plaintiff may be entitled to the relief she seeks. However, the superior court granted summary judgment to defendants on the grounds the arbitration provisions were valid and enforceable, and that plaintiff’s claimed inability to pay the anticipated arbitration costs was irrelevant. This, the Court found, was error: “Though the law has great respect for the enforcement of valid arbitration provisions, in some situations those interests must cede to an even greater, unwavering interest on which our country was founded - justice for all.” Consistent with Roldan, and federal and California arbitration statutes, a party’s fundamental right to a forum she or he can afford may outweigh another party’s contractual right to arbitrate. In this case, the Court found triable issues of material fact regarding plaintiff’s present ability to pay her agreed share of the anticipated costs to complete the arbitration. The trial court therefore erred in granting defendants’ motion for summary judgment. View "Weiler v. Marcus & Millichap Real Estate Investment Services" on Justia Law

The Court of Appeal reversed the trial court's grant of summary judgment in an action seeking to recover funds that plaintiff claimed had been taken by her then-investment advisor. Plaintiff alleged that the funds came from her investment account at her investment advisory firm which the advisor then used to repay a loan which an entity he controlled had obtained several years earlier from the Ryman-Carroll Foundation. The court held that plaintiff made a sufficient prima facie showing to support her claim for recovery. In this case, plaintiff has sufficiently placed material facts—the extent of Ryman's knowledge and of its good faith—in issue. Therefore, the matter required trial rather than summary disposition. View "Welborne v. Ryman-Carroll Foundation" on Justia Law

The Court of Appeal reversed the trial court's grant of summary judgment in an action seeking to recover funds that plaintiff claimed had been taken by her then-investment advisor. Plaintiff alleged that the funds came from her investment account at her investment advisory firm which the advisor then used to repay a loan which an entity he controlled had obtained several years earlier from the Ryman-Carroll Foundation. The court held that plaintiff made a sufficient prima facie showing to support her claim for recovery. In this case, plaintiff has sufficiently placed material facts—the extent of Ryman's knowledge and of its good faith—in issue. Therefore, the matter required trial rather than summary disposition. View "Welborne v. Ryman-Carroll Foundation" on Justia Law

Laine Hedwall filed a cross-complaint in the underlying action against CLP, Arcis, and PCMV, alleging claims for breach of contract, fraud, declaratory relief, and related causes of action. The trial court sustained CLP's demurrer to the cross-complaint with leave to amend, Hedwall filed a first amended cross-complaint (FACC), CLP then demurred to all but one of the claims against it in the FACC; and, while CLP's demurrer to the FACC was pending, Hedwall then filed a second amended cross-complaint (SACC). The Court of Appeal affirmed the trial court's decision to cancel the filing of the SACC on its own motion, sustain CLP's demurrer to the FACC without leave to amend, and grant of judgment on the pleadings in CLP's favor on Hedwall's sole remaining claim against CLP. The court also affirmed the trial court's denial of Hedwall's request for an order staying the proceedings relating to Arcis and PCMV. View "Hedwall v. PCMV, LLC" on Justia Law

Laine Hedwall filed a cross-complaint in the underlying action against CLP, Arcis, and PCMV, alleging claims for breach of contract, fraud, declaratory relief, and related causes of action. The trial court sustained CLP's demurrer to the cross-complaint with leave to amend, Hedwall filed a first amended cross-complaint (FACC), CLP then demurred to all but one of the claims against it in the FACC; and, while CLP's demurrer to the FACC was pending, Hedwall then filed a second amended cross-complaint (SACC). The Court of Appeal affirmed the trial court's decision to cancel the filing of the SACC on its own motion, sustain CLP's demurrer to the FACC without leave to amend, and grant of judgment on the pleadings in CLP's favor on Hedwall's sole remaining claim against CLP. The court also affirmed the trial court's denial of Hedwall's request for an order staying the proceedings relating to Arcis and PCMV. View "Hedwall v. PCMV, LLC" on Justia Law

Plaintiff Petrolink, Inc. sought the modification of a judgment entered in its favor on its cause of action for specific performance. Petrolink leased a parcel of undeveloped property from defendant Lantel Enterprises pursuant to a lease agreement that included a provision allowing the lessee to purchase the property. Petrolink notified Lantel of its desire to exercise the option, but the parties obtained appraisals that were far apart in their valuation of the property. The parties ultimately could not agree on the value. They sued one another, each asserting various causes of action (including specific performance), claiming that the other party had refused to complete the sale and purchase transaction, and essentially seeking a judicial determination as to the fair market value of the property. During the pendency of the litigation, Petrolink continued to pay Lantel monthly rent on the property. The case went to trial before a judge. At trial, Lantel did not dispute that Petrolink had exercised the purchase option. The main factual issue at trial concerned what the fair market value of the property was at the time Petrolink notified Lantel of its desire to purchase the property. The judge appointed an expert and obtained an independent appraisal of the property, which was between the values in the appraisals that the parties had obtained. The trial court ultimately entered judgment in favor of Petrolink on its specific performance cause of action and found the date on which Petrolink exercised the purchase option was August 25, 2011, the date of its letter notifying Lantel of its desire to exercise the option. Although Petrolink had requested it, the court did not grant Petrolink an offset for any of the rent that it had paid to Lantel during the pendency of the litigation. On appeal, Petrolink contended the trial court erred in failing to offset the rents it paid to Lantel through the pendency of this litigation against the purchase price. The Court of Appeal agreed with Petrolink that once it exercised the purchase option, the lease was terminated and a contract for purchase and sale came into existence. To the extent that the trial court denied Petrolink an offset for the rents that it paid during the pendency of the litigation, the court failed to account for the delayed performance of the contract for purchase and sale. Specifically, the court failed to place the parties in the positions in which they would have been at the time the sale and purchase contract should have been performed. Therefore, the Court of Appeal reversed judgment to permit the trial court to undertake an accounting between the parties that takes into account the delay in performance of the contract, and places both parties in the positions in which they would have been if the contract had been timely performed. View "Petrolink, Inc. v. Lantel Enterprises" on Justia Law

A wine dealer sold millions of dollars’ worth of counterfeit wine to an unsuspecting wine collector. When the collector discovered the fraud, he filed an insurance claim based on his “Valuable Possessions” property insurance policy. The insurance company denied the claim. The collector sued for breach of contract. The trial court ruled in favor of the insurance company, sustaining its demurrer. The Court of Appeal concurred with the trial court: the collector suffered a financial loss, but there was no loss to property that was covered by the property insurance policy. View "Doyle v. Fireman's Fund Insurance Co." on Justia Law

The Court of Appeal reversed the judgment of dismissal entered after the trial court sustained without leave to amend the demurrer of Trader Joe's to plaintiff's first amended complaint. The court held that plaintiff adequately stated a cause of action for intentional interference with contractual relations. The court reasoned that one, like Trader Joe's here, who was not a party to the contract or an agent of a party to the contract was a "stranger" for purpose of the tort of intentional interference with contract, and plaintiff need not allege an independently wrongful act to state his cause of action for interference with contract. The court held that plaintiff adequately stated causes of action for intentional and negligent interference with prospective economic advantage. View "Redfearn v. Trader Joe's Company" on Justia Law

Plaintiff Tony Muro entered into an employment contract with defendant Cornerstone Staffing Solutions, Inc. (Cornerstone). The contract included a provision requiring that all disputes arising out of Muro's employment with Cornerstone to be resolved by arbitration. It also incorporated a class action waiver provision. In response to this case, which was styled as a proposed class action and alleged various Labor Code violations, Cornerstone moved to compel arbitration and dismiss the class claims. Relying heavily on Garrido v. Air Liquide Industrial, U.S. LP, 241 Cal.App.4th 833 (2015), the trial court concluded the contract was exempted from the operation of the Federal Arbitration Act (FAA; 9 U.S.C. 1 et seq.) and was instead governed by California law. It further determined that the California Supreme Court's decision in Gentry v. Superior Court, 42 Cal.4th 443 (2007) (overruled by 59 Cal.4th 348(2014)) continued to provide the relevant framework for evaluating whether the class waiver provision in the contract was enforceable under California law. After applying Gentry to the record here, the court found the class waiver provision of the contract unenforceable and denied the motion to compel arbitration. Cornerstone appeals, but finding no error, the Court of Appeal affirmed. View "Muro v. Cornerstone Staffing Solutions" on Justia Law