Justia California Court of Appeals Opinion Summaries

Pacific Bay treated an individual who was a subscriber to a Blue Shield health plan. It submitted invoices to Blue Shield for payment for the services rendered to the subscriber. Pacific Bay contends it was underpaid and brought suit against Blue Shield to recover the additional amount it claimed to be owed. The court sustained Blue Shield's demurrer to the first amended complaint (FAC) without leave to amend, finding that Pacific Bay had not shown that it was entitled to any payment from Blue Shield. As an out-of-network, nonemergency service provider, Pacific Bay was entitled to payment for treating Blue Shield's subscriber under the terms of the applicable evidence of coverage (EOC). Pacific Bay did not allege Blue Shield paid it improperly under the EOC, nor did it argue that it could allege additional facts to support such a claim. Pacific Bay claimed it was underpaid. Against this backdrop, Pacific Bay's other allegations did not give rise to any valid cause of action. View "Pacific Bay Recovery v. Cal. Physicians' Services" on Justia Law

Whether a contract provision is an illegal penalty or enforceable liquidated damage clause is a question for the trial court; on review, appellate deference to that court’s factual findings is required.In 2005, Brother and Sister entered a contract under which Brother, a licensed real estate agent, would develop Sister’s Pebble Beach property through funding from investors and then sell the developed property, with Brother and Sister to split the profits after paying $1.5 million to Sister, reflecting her equity, and $30,000 to Brother as a fee. Brother obtained investors. Sister obtained loans totaling $1,008,000.00, secured by first and second deeds of trust. Brother did not use the money for its intended purposes. The property was sold at foreclosure. The investors and Sister sued Brother. Brother filed for bankruptcy. The bankruptcy court granted relief from the automatic stay for Sister’s state claims for “Breach of Fiduciary Duty, Conversion, Fraud, and Intentional Infliction of Emotional Distress.” In 2014, after mediation, Brother and Sister signed a settlement, under which Sister was awarded a stipulated judgment of $850,000. The court of appeal affirmed, rejecting Brother’s “fact-based” argument that the amount included an unenforceable liquidated damages penalty of $250,000.00 (Civil Code 1671), which he had not raised in the trial court. View "Krechuniak v. Noorzoy" on Justia Law

The Warrens owned and operated a Harley-Davidson motorcycle dealership in Salinas for approximately 38 years. Intending to retire, the Warrens contacted a potential buyer, Dabney, who owned a Harley-Davidson dealership in Riverside. The Warrens’ corporation and Dabney executed various agreements, including a master “Asset Purchase Agreement” that incorporated a Guaranty signed by Dabney, under which he “agree[d] . . . to guarantee . . . the collection and receipt of all amounts” required under section 2 of the Agreement, under the promissory note(s), and under the lease. The Agreement allowed Dabney to assign his rights and obligations as buyer to a corporation that he controlled, with the assignment to relieve Dabney of all obligations under the Agreement. Dabney assigned his rights under the Agreement to Monterey Motorcycles, Inc., which defaulted on its obligations under the Agreement. The dealership was sold to a third party. The Warrens sued and won a judgment of $2,746,318 against Dabney. The court of appeal reversed, agreeing that the Guaranty did not apply to a covenant not to compete agreement and two consulting agreements. View "G & W Warren's, Inc. v. Dabney" on Justia Law

In Marina Pacifica Homeowners Assn. v. Southern California Financial Corp., this court determined that a monthly "assignment fee," payable by individual condominium unit owners to the developers of the condominium project, was properly collectible under those statutory provisions. On appeal, the Association challenged the trial court's judgment determining the amended amounts owing from unit owners to the developers' successor in interest, Southern California, for the assignment fee. The court need not decide whether it could properly reconsider its decision in Marina Pacifica I, because the amended statute and its legislative history demonstrate that the Legislature intended in any event to permit the Marina Pacifica I assignment fees to remain in place. Accordingly, the court affirmed the judgment. View "Marina Pacifica Homeowners Assoc. v. Southern California Financial Corp." on Justia Law

After Thomas, a member of the Board of Directors of Applied Medical Corporation, was removed from the Board in January 2012, Applied exercised its right to repurchase shares of its stock issued to Thomas as part of stock incentive plans. Thomas objected to the repurchase price, and in August 2012 Applied filed suit. In June, 2015, the trial court granted summary judgment against Applied. The court of appeal affirmed as to Applied’s fraud-based claims, but reversed as to Applied’s claims based on breach of contract and conversion. A conversion claim may be based on either ownership or the right to possession at the time of conversion. Applied’s fraud claims were barred by the applicable statute of limitations; the court rejected Applied’s argument that those claims, first alleged in 2014, were timely under either the discovery rule or the relation back doctrine. View "Applied Medical Corp. v. Thomas" on Justia Law

Escobar was an employee of O’Donnell, a sub-subcontractor of Bayside, which was a subcontractor of Oltmans, the general contractor on a Menlo Park construction project. Escobar sued Oltmans and the property owner, alleging that Oltmans negligently cut and left unsecured a skylight opening in the building under construction, through which Escobar fell while installing scaffolding that O’Donnell was erecting for Bayside. Oltmans filed a cross-complaint against the subcontractors, alleging a right to contractual indemnity and breach of Bayside’s contractual obligation to provide certificates of insurance certifying that Oltmans was covered as an additional insured under liability policies the subcontractors were obligated to obtain. The subcontract provided indemnity to Oltmans for injury claims arising out of the scope of the subcontractor’s work “except to the extent the claims arise out of, pertain to, or relate to the active negligence or willful misconduct” of Oltmans. Reversing the trial court, the court of appeal ruled in favor of Oltmans. Under such a provision the general contractor is precluded from recovering indemnity for liability incurred as a result of its own active negligence but may be indemnified for the portion of liability attributable to the fault of others. The court noted the same question arises as to the meaning of Civil Code section 2782.05, which renders unenforceable an indemnity provision “to the extent the claims arise out of, pertain to, or relate to the active negligence or willful misconduct of that general contractor.” View "Oltmans Construction Co. v. Bayside Interiors, Inc." on Justia Law

Plaintiffs, writers and producers who entered into a profit participation agreement with Walt Disney Pictures regarding their work on the television series, Home Improvement, filed suit alleging that Disney failed to properly account for and pay them the amounts owed under the parties' agreement. The trial court granted Disney's motion for summary adjudication, finding that the claims were time-barred by the contractual limitations period in the incontestability clause. The court concluded that plaintiffs' claims were within the scope of the incontestability clause in the parties' profit participation agreement; Disney met its burden of showing that the 24-month limitations period in the parties' agreement expired prior to the producers objecting to the participation statements; plaintiffs waived the discovery rule by agreeing to the incontestability clause; and, based on the totality of the evidence about Disney's alleged conduct, there were triable issues of fact as to whether Disney waived or was estopped from asserting a contractual limitations defense. Accordingly, the court reversed the judgment. View "Wind Dancer Production Group v. Walt Disney Pictures" on Justia Law

Plaintiff Muhammad Iqbal appealed the grant of summary judgment entered against his complaint for personal injuries. In 2011, plaintiff sued Yosemite Auto Sales, Inc. (Yosemite Auto), its owner Eyad Kaid, and Alla Abuziadeh, individually and doing business as Jimmy’s Tow (collectively, the former defendants), for personal injuries. He alleged Yosemite Auto retained him to determine why a vehicle it owned would not start. Unknown to plaintiff, Abuziadeh earlier towed the vehicle to Yosemite Auto and disconnected the transmission shift linkage to do so. He allegedly did not reconnect the shift linkage after towing the car. The trial court ruled the complaint was barred by a general release plaintiff had previously executed that immunized “affiliates” of the defendants in the former case, and defendant Imran Ziadeh was such an affiliate. The Court of Appeal concluded as a matter of law defendant was not a protected “affiliate,” as that term was commonly understood, and reversed. View "Iqbal v. Ziadeh" on Justia Law

Farrar was hired by Direct Commerce as its vice-president of business development and negotiated an employment agreement set forth in a six-page offer letter detailing her compensation, additional bonus structure, and stock options. The agreement also included an arbitration provision, set off by the same kind of underlined heading and spacing as the other enumerated paragraphs of the agreement. When Farrar sued Direct, alleging breach of contract, conversion, wrongful termination, breach of the covenant of good faith and fair dealing, and failure to pay wages owed and waiting time penalties, the employer unsuccessfully sought to compel arbitration. The trial court found the arbitration provision procedurally and substantively unconscionable. The court of appeals reversed. While the arbitration provision is one-sided, as it excludes any claims arising from the confidentiality agreement Farrar also signed, that offending exception is readily severable and, on this record, should have been severed. View "Farrar v. Direct Commerce, Inc." on Justia Law

After a Machine Zone (MZ) employee posted a review on Glassdoor's website disclosing confidential information regarding MZ's RTPlatform technology, MZ filed suit against the employee for violation of a nondisclosure agreement signed by all MZ employees. When Glassdoor refused to identify the employee, MZ moved for an order compelling disclosure, which the trial court granted. Glassdoor petitioned for a writ directing the trial court to set aside its order. The court concluded that Glassdoor has standing to assert the employee's interest in maintaining his anonymity as against MZ's efforts to compel Glassdoor to identify him. The court concluded that MZ failed to make a prima facie showing that the employee's statements disclosed confidential information in violation of the nondisclosure agreement, and granted the requested relief. In this case, MZ denied the accuracy of the employee's report without identifying any real confidential information it might be understood to have disclosed. View "Glassdoor, Inc. v. Superior Court" on Justia Law