Justia California Court of Appeals Opinion Summaries

The underlying action was initiated by homeowners from two residential developments in Rocklin against appellants Centex Homes and Centex Real Estate Corporation (Centex) for alleged defects to their homes. Centex and cross-defendant and respondent St. Paul Fire and Marine Insurance Company (St. Paul) have a history of insurance coverage disputes. St. Paul was an insurer for subcontractor Ad Land Venture (Ad Land), and agreed to defend Centex as an additional insured subject to a reservation of rights. Centex filed a cross-complaint against its subcontractors and St. Paul that sought, as the seventh cause of action, a declaration that Centex was entitled to independent counsel under Civil Code section 28601 because St. Paul’s reservation of rights created significant conflicts of interest. Centex appealed after the trial court granted St. Paul’s motion for summary adjudication of Centex’s seventh cause of action. Centex argued any possible or potential conflict was legally sufficient to require St. Paul to provide independent counsel. The Court of Appeal disagreed. Alternatively, Centex contended independent counsel was required because counsel appointed by St. Paul could influence the outcome of the coverage dispute and St. Paul controlled both sides of the litigation. The Court of Appeal concluded that because Centex failed to establish a triable issue of material fact regarding these assertions, the Court affirmed the judgment. View "Centex Homes v. St. Paul Fire & Marine Ins. Co." on Justia Law

Plaintiff filed suit against defendant for causes of action arising out of defendant's breach of contract, and for fraud. Plaintiff and defendant had entered into a contract under which plaintiff paid the purchase price for a Malibu residence to be held by defendant as the "nominal owner." The trial court rejected plaintiff's fraud claim, but found that defendant had breached the contract. The trial court denied plaintiff's request for rescission, but ordered that the property be sold and the proceeds apportioned between the parties in accordance with the contract. The Court of Appeal held that the trial court did not err by granting plaintiff relief based on defendant's breach of contract; defendant's challenge to particular provisions of the judgment were rejected; and plaintiff's appeal from an order denying his motion for leave to amend was moot. Accordingly, the court affirmed the judgment. View "Guan v. Hu" on Justia Law

Burkhalter Kessler Clement & George LLP (Burkhalter) subleased a portion of its office space to the Eclipse Group LLP (Eclipse). The sublease contract had a provision for an award of reasonable attorney fees to the prevailing party in the event of a lawsuit. Burkhalter later filed a complaint against Eclipse alleging breach of contract; Burkhalter also named Jennifer Hamilton, a managing partner of Eclipse, as an alter ego defendant. The two defendants were jointly represented by Avyno Law P.C. (Avyno). Burkhalter prevailed against Eclipse on the breach of contract claim; Hamilton prevailed against Burkhalter on the alter ego theory (she was dismissed with prejudice). The trial court granted Burkhalter’s motion for its attorney fees, but denied Hamilton’s motion for her attorney fees. There was no explanation for the court’s denial. Hamilton appealed, and the Court of Appeal reversed: here, both Burkhalter and Hamilton were prevailing parties on the contract. On remand, the trial court was directed to award Hamilton reasonable attorney fees that were incurred by Avyno solely in her defense, subject to the court’s sound discretion. View "Burkhalter Kessler Clement & George, LLP v. Hamilton" on Justia Law

The oral agreement at issue in this appeal was made in connection with a transaction by which three companies, of which Albert Kanno was the majority shareholder, were sold to two Delaware corporations. The transaction was documented principally by three writings, each of which had an integration clause. A jury found in favor of Kanno and against Marwit Capital Partners II, L.P. (Marwit Capital) and Marwit Partners, LLC (Marwit LLC) on Kanno’s claim for breach of the oral agreement. After the jury rendered its verdict, the trial court concluded the parol evidence rule did not bar Kanno’s breach of contract claim and that the oral agreement was enforceable. Marwit Capital and Marwit LLC (together, Marwit) appealed. The Court of Appeal concluded the three written agreements were at most partial integrations, and, therefore, the oral agreement was enforceable if its terms did not directly contradict and were consistent with those three agreements, and the Court found no direct contradiction or inconsistency. View "Kanno v. Marwit Capital Partners II" on Justia Law

Plaintiff filed a breach of fiduciary duty action against defendants under Family Code section 1101, seeking return of a condominium that she claims to have purchased with her deceased husband and transferred to him so that he could obtain a more favorable loan. The Court of Appeal held that the Legislature's specific treatment of the statute of limitations in section 1101, subdivision (d) governs instead of the general statute of limitations in Code of Civil Procedure sections 366.2 and 366.3. Therefore, the court reversed the trial court's decision sustaining without leave to amend defendants' demurrer so that plaintiff may pursue her cause of action arising under section 1101. View "Yeh v. Tai" on Justia Law

In these consolidated cases stemming from the sale and purchase of a partnership interest, SP appealed from a judgment of dismissal following the granting of the trial court's own motion for judgment on the pleadings in SP's breach of contract and conversion action against defendant. SP also appealed from the post-judgment order granting defendant his contractual attorney fees. The Court of Appeal held that SP adequately stated causes of action for breach of contract and conversion and reversed the judgment. In this case, even if the Necessary Approvals were legally required to effectuate a transfer of the Partnership Interest, SP's failure to obtain them was not fatal to its breach of contract claim. Furthermore, SP's conversion claim was not a generalized claim for money but rather a claim for a specific identifiable sum of money received by defendant for SP's benefit. Finally, the court reversed the order awarding fees. View "SP Investment Fund I LLC v. Cattell" on Justia Law

California-American, a water utility, and Marina and Monterey, public water agencies, entered into contracts to collaborate on a water desalination project, stating that the prevailing party of “any action or proceeding in any way arising from [their a]greement” would be entitled to an award of attorney fees and costs. After learning that a member of Monterey’s board of directors had a conflict of interest, having been paid for consulting work to advocate on behalf of Marina, California-American sued to have the contracts declared void under Government Code section 1090. Monterey agreed that the contracts were void. Marina filed cross-claims seeking a declaration that the contracts were “valid and enforceable.” Years of litigation culminated in a holding declaring the agreements void. Marina challenged post-judgment orders that California-American and Monterey were entitled to costs as prevailing parties under Code of Civil Procedure sections 1032 and 1717 and granting them specific attorney fees awards. The court of appeal affirmed, rejecting Marina’s argument that they were not entitled to awards because the underlying contracts were declared void. The illegality exception to the rule of mutuality of remedies applies when the contract's subject matter is illegal but does not apply when the litigation involves the “invalidity” or “unenforceability” of an otherwise legal contract. View "California-American Water Co. v. Marina Coast Water District" on Justia Law

The insurance policy in question in this case was issued by petitioner Admiral Insurance Company (Admiral) to the real party in interest, A Perfect Match, Incorporated (Perfect Match), a company that "match[es] surrogates and egg donors with infertile families." On the first page of the policy Admiral promised to provide coverage for potential claims that Perfect Match knew or reasonably should have known about, but failed to disclose. In this case, prior to purchasing the Admiral policy, there was no question Perfect Match knew about a potential claim former clients Monica Ghersi and Carlos Arango intended to file arising from the birth of their daughter with a rare form of eye cancer. A lawyer representing Ghersi and Arango sent a letter to Perfect Match in June 2012 giving notice of their intent to file a complaint alleging professional negligence. After consulting with its insurance broker, Perfect Match made the decision not to disclose the potential Ghersi/Arango claim to its current insurer out of concern it would result in a higher premium. When it applied for the Admiral policy in October 2012, Perfect Match likewise did not mention the potential Ghersi/Arango claim. But once the Ghersi/Arango complaint was filed and ultimately served in March 2013, Perfect Match claimed potential coverage under the Admiral policy based on a "professional incident" and asserted its right to a defense. Admiral denied coverage and refused to defend, citing the policy language that excluded coverage for claims the insured reasonably should have foreseen prior to inception of the policy. Perfect Match then sued alleging breach of contract and bad faith. The Court of Appeal found no material factual disputes in this case: Admiral was entitled to insist that Perfect Match disclose all potential claims of which it was, or should have been, aware; it could and did exclude from coverage any such claim that was not disclosed. The superior court erred in failing to grant summary judgment in favor of Admiral. Accordingly, the Court issued a writ of mandate directing the superior court to vacate its order denying Admiral's motion for summary judgment and instead enter an order granting the motion. View "Admiral Ins. Co. v. Superior Court" on Justia Law

ITV and the Company appealed the trial court's grant of a preliminary injunction for the Gurneys and Little Win, LLC. The Gurneys are the minority owners of the Company and formerly served as its CEOs. The Court of Appeal reversed the trial court's order to the extent that it reinstated the Gurneys to their positions managing the day-to-day operations of the Company. The court held that, under the terms of the employment agreements, the Company was entitled to terminate the Gurneys' employment at any time for good cause; the board may make decisions by majority vote, with the exception that some decisions require unanimity; the Gurneys' authority over the day-to-day operations of the Company was an exception to the exception; the exceptions to the exception did not grant the Gurneys lifetime jobs as managers of the Company; and the operating agreement, even when interpreted on its own, did not grant the Gurneys authority to manage the Company’s day-to-day operations indefinitely. Therefore, the court affirmed the portion of the preliminary injunction barring the Company from impinging on their rights as board members. View "ITV Gurney Holdings v. Gurney" on Justia Law

All Masonry & Landscape Supply (All Masonry) appealed a postjudgment order awarding attorney fees to Oldcastle, the prevailing party in a breach of contract action. Oldcastle manufactured masonry and concrete products, including its Belgard-branded concrete pavers and segmented retaining walls. All Masonry distributed landscape supplies and concrete products to customers. All Masonry claimed that in 2001, it entered into an agreement with Oldcastle to be Oldcastle's exclusive dealer of Belgard products in San Diego County. The 2001 dealer agreement was part written and part oral. In 2013, All Masonry sued Oldcastle for breaching the 2001 dealer agreement by distributing Belgard products through other dealers in San Diego County. Oldcastle prevailed on the breach of contract cause of action in 2015 when the court granted its motion for summary adjudication on that claim, rejecting All Masonry's contention that it had the exclusive right to sell Belgard at preferential pricing in San Diego County. Oldcastle filed a postjudgment motion to recover attorney fees in connection with All Masonry's breach of contract claim. The court awarded Oldcastle $180,120 in attorney fees for defending the breach of contract cause of action through summary adjudication and for litigating the postjudgment fees motion. The Court of Appeal reversed the award of attorney fees to Oldcastle, finding no clear and unequivocal evidence that the parties intended to incorporate the terms of a 2010 credit application into their 2001 dealer agreement, which was the basis of the fee award. Civil Code section 1642 does not allow the recovery of attorney fees in this case. View "R.W.L. Enterprises v. Oldcastle, Inc." on Justia Law