California Case Summaries Civil™ California cases: 2-15-16 to 2-26-16.

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My organized, succinct summaries of noteworthy new California civil cases will keep you current with new legal developments. I look forward to helping you resolve cases or issues as a mediator, arbitrator, referee or special master.

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Monty A. McIntyre, Esq. | ADR Services, Inc.
Mediator, Arbitrator, Referee & Special Master | Relentless Optimist® | Rapid, Reasonable Resolution
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 CALIFORNIA SUPREME COURT

Civil Procedure

Gaines v. Fidelity National Title Insurance Company (2016) _ Cal.4th _ , 2016 WL 737910: The California Supreme Court affirmed the Court of Appeal’s ruling affirming the trial court’s dismissal of the action regarding the sale of real property for failure to bring the matter to trial within five years as required by Code of Civil Procedure section 583.340(b). The statute was not tolled by an order that was entered pursuant to the parties’ agreement that struck the trial date and “stayed” the proceedings while the parties engaged in mediation and completed all outstanding discovery. The court’s order was not a complete stay that would have automatically tolled the statute. And while the order was a partial stay, it did not toll the statute because it did not create a circumstance of impossibility, impracticability, or futility. Plaintiff agreed to the order, remained in control of the circumstances, and made meaningful progress towards resolving the case during the stay period. (February 25, 2016.)

Real Property (Wrongful Foreclosure)

Gaines v. Fidelity National Title Insurance Company (2016) _ Cal.4th _ , 2016 WL 737910: See summary above under Civil Procedure.

Yvanova v. New Century Mortgage Corporation (2016) _ Cal.4th _ : The California Supreme Court reversed the Court of Appeal’s ruling that plaintiff could not state a cause of action for wrongful foreclosure based on an allegedly void assignment because she lacked standing to assert defects in the assignment, to which she was not a party. The Supreme Court disagreed, finding that, because in a nonjudicial foreclosure only the original beneficiary of a deed of trust or its assignee or agent may direct the trustee to sell the property, an allegation that the assignment was void, and not merely voidable at the behest of the parties to the assignment, will support an action for wrongful foreclosure. The ruling was narrow, holding only that a borrower who had suffered a nonjudicial foreclosure does not lack standing to sue for wrongful foreclosure based on an allegedly void assignment merely because he or she was in default on the loan and was not a party to the challenged assignment. (February 18, 2016.)

 CALIFORNIA COURTS OF APPEAL

Attorneys

Younessi v. Woolf (2016) _ Cal.App.4th _ , 2016 WL 619018: The Court of Appeal affirmed, reluctantly, the trial  court’s order granting plaintiff’s motion to set aside the dismissal of a legal malpractice action. The trial court had entered the dismissal after plaintiffs failed to timely file an amended complaint in response to an order sustaining demurrers to the original complaint with leave to amend. Although the Court of Appeal found that the evidence did not support granting relief for mistake, inadvertence, surprise, or excusable neglect, since the dismissal resulted from plaintiffs’ newly retained attorney’s failure to oppose the demurrers and timely file an amended complaint, plaintiffs were entitled to relief under section 473(b)’s attorney-fault provision. (C.A. 4th, February 16, 2016.)

Civil Procedure (Anti-SLAPP, Declaration of Nonmonetary Status, Demurrers, Discovery,
Relief from Default Judgment, Relief from Dismissal, Summary Judgment)

Bae v. T.D. Service Company (2016) _ Cal.App.4th _ , 2016 WL 742198: The Court of Appeal affirmed the trial court’s order granting a motion for relief from a default and default judgment. Plaintiffs filed a complaint arising from a foreclosure sale against several defendants including defendant T.D. Service Company of Arizona (defendant). Defendant filed an unchallenged declaration of nonmonetary status under California Civil Code section 2941l, asserting that it had been named as a defendant solely in its capacity as trustee under the pertinent deed of trust and not due to any wrongful conduct in its performance as trustee. Defendant filed no answer in the action, and the clerk later entered defendant’s default, and the trial court issued a default judgment against defendant awarding plaintiffs $3,000,000 in damages. Defendant filed a motion for relief from the default and default judgment, which the trial court properly granted. The declaration of nonmonetary status under Civil Code section 2924l, coupled with the evidence supporting defendant’s motion to set aside the default and default judgment, sufficed to show a meritorious defense regarding the alleged misconduct. Defendant’s unchallenged declaration for nonmonetary interest shielded it from the default and default judgment, notwithstanding defendant’s failure to file any pleading or motion ordinarily required to avoid the entry of default. Defendant was fully entitled to believe that no default could be entered against it, and its counsel lacked knowledge of the default proceedings. (C.A. 2nd, February 25, 2016.)

Gilkyson v. Disney Enterprises, Inc. (2016) _ Cal.App.4th _ , 2016 WL 695707: The Court of Appeal reversed in part the trial court’s order sustaining a demurrer, without leave to amend, on the basis that the statute of limitations had expired. Plaintiffs filed a complaint alleging that defendant had breached its contractual obligation to pay royalties in connection with the licensing or other disposition of the mechanical reproduction rights to plaintiffs’ deceased father’s songs. The Court of Appeal concluded that the trial court erred because the continuous accrual doctrine applied to plaintiffs’ contract and declaratory relief claims, but ruled that the order sustaining the demurrer to the claim for breach of the implied covenant of good faith and fair dealing proper because plaintiffs had added that cause of action without the court’s permission following the first demurrer ruling. (C.A. 2nd, filed January 27, 2016, published February 22, 2016.)

People ex rel Government Employees Insurance Company v. Cruz (2016) _ Cal.App.4th _ , 2016 WL 633340: The Court of Appeal reversed in part and affirmed in part the trial court’s summary judgment for defendant. The trial court granted the summary judgment after it granted defendant’s motion to bind plaintiff to certain initial interrogatory responses and refused to consider additional evidence offered by plaintiff in opposition to the motion. The Court of Appeal ruled that the trial court erred in binding plaintiff to the interrogatory responses because defendant failed to establish all three prerequisites of Code of Civil Procedure 2030.310(c). Even if plaintiff had failed to show substantial justification for the initial interrogatory responses, the record did not support a finding that defendant was substantially prejudiced by the later interrogatory responses or that any prejudice could not have been cured by a continuance or use of the initial interrogatory responses at trial. The trial court also erred in refusing to consider the additional evidence offered by plaintiff to oppose the summary judgment motion, and erred in granting summary judgment for defendant on the statutory claim under the Insurance Fraud Prevention Act (Insurance Code section 1871 et seq.; Penal Code, section 550). Plaintiff, however, failed to address the remaining common law causes of action on appeal, and therefore forfeited any challenges to the trial court’s summary disposition of them. (C.A. 4th, filed January 22, 2016, published February 17, 2016.)

Sweetwater Union School District v. Gilbane Building Company (2016) _ Cal.App.4th _ , 2016 WL 741642: The Court of Appeal affirmed the trial court’s ruling denying an anti-SLAPP motion, but for different reasons. Plaintiff sued seeking to void management contracts with all three defendants and to require them to disgorge all sums that plaintiff paid them under the contracts pursuant to Government Code section 1090. Plaintiff alleged that certain representatives of the defendant entities engaged in a “pay to play” scheme with several officials of plaintiff that involved paying for expensive dinners, tickets to entertainment and sporting events, travel expenses, and making contributions to political campaigns and charities, in an effort to influence the officials to award defendants certain construction contracts. The trial court did not abuse its discretion in considering plea forms, including the incorporated plea narratives, the grand jury testimony, and grand jury exhibits, in addressing defendants’ anti-SLAPP motion. These documents provided information indistinguishable from evidence presented by way of a declaration. The Court of Appeal disagreed with the trial court finding that the anti-SLAPP statute did not apply because the conduct underlying the complaint was illegal as a matter of law, and therefore was not protected by the constitutional guarantees of free speech and petition. The Court of Appeal found instead that the conduct was protected activity. However, it affirmed the trial court ruling because plaintiff, through the admitted evidence, demonstrated a probability of prevailing on its Section 1090 claims against defendants, thereby defeating defendants’ anti-SLAPP motion with respect to the second prong of the anti-SLAPP analysis. (C.A. 4th, filed February 24, 2016.)

Younessi v. Woolf (2016) _ Cal.App.4th _ , 2016 WL 619018: See summary above under Attorneys.

Construction (Public Contract Code)

Construction Industry Force Account Council, Inc. v. Ross Valley Sanitary District (2016) _ Cal.App.4th _ , 2016 WL 685254: The Court of Appeal reversed and vacated the trial court’s preemptory writ of mandate commanding the Ross Valley Sanitary District (District) to cease and desist from replacing 139 miles of small diameter sewer pipe with in-house employees and to instead conduct all future replacement of this pipe through competitive bid and contract. The Court of Appeal agreed with the District that Public Contract Code section 20803 permits a sanitary district to use in-house employees to complete a project regardless of total cost, and to require a district’s compliance with the competitive bidding procedures in the Public Contract Code only if it chooses to contract out to a third party a project meeting the $15,000 cost threshold. (C.A. 1st, filed January 25, 2016, published February 18, 2016.)

Employment

Bains v. Department of Industrial Relations, Division of Labor Standards Enforcement (2016) _ Cal.App.4th _ , 2016 WL 621037: The Court of Appeal affirmed the trial court judgment. The trial court properly concluded that the harvest is over when the raw prune fruit is collected in the fields and then transported to a fixed structure for drying. Wage Order No. 13 applies while workers are operating in the drying sheds. (C.A. 3rd, February 16, 2016.)

Wallace v. County of Stanislaus (2016) _ Cal.App.4th _ : The Court of Appeal reversed the judgment for defendant in a disability discrimination case based upon the trial court’s erroneous jury instruction and special verdict. The trial court erroneously believed that proof of animus or ill will was required and modified California Civil Jury Instruction (CACI) No. 2540 to include a requirement that plaintiff prove defendant regarded or treated him “as having a disability in order to discriminate.” California law does not require an employee with an actual or perceived disability to prove that the employer’s adverse employment action was motivated by animosity or ill will against the employee. The financial consequences of an employer’s mistaken belief that an employee is unable to safely perform a job’s essential functions should be borne by the employer, not the employee, even if the employer’s mistake was reasonable and made in good faith. The Court of Appeal found the instructional error was prejudicial and remanded the disability discrimination claim for a retrial, limited to determining the amount of damages resulting from defendant’s decision to place plaintiff on an unpaid leave of absence for over two years. (C.A. 5th, February 25, 2016.)

Evidence

Sweetwater Union School District v. Gilbane Building Company (2016) _ Cal.App.4th _ , 2016 WL 741642: See summary above under Civil Procedure.

Government (Public Contract Code)

Construction Industry Force Account Council, Inc. v. Ross Valley Sanitary District (2016) _ Cal.App.4th _ , 2016 WL 685254: see summary above under Construction.

Macy v. City of Fontana (Ten-Ninety, Ltd.) (2016) _ Cal.App.4th _ , 2016 WL 702297: The Court of Appeal affirmed the trial court’s order sustaining a demurrer without leave to amend to a petition for writ of mandate. The petition initially named the Fontana Redevelopment Agency, which was dissolved by the California Legislature in 2011 as part of Assembly Bill 26 (AB 26). The petition later named the City of Fontana as the successor agency and also in its separate capacity as a municipal corporation. The City of Fontana demurred to the writ against it as a municipal corporation. The Court of Appeal ruled that, under the scheme adopted by the Legislature under AB 26, the liabilities of dissolved redevelopment agencies are limited to the assets transferred to successor agencies. There is nothing in AB 26, or later amendments to the dissolution legislation, that would extend that liability beyond an redevelopment agency’s assets to municipalities and their general funds. (C.A. 4th, February 23, 2016.)

Intellectual Property

Gilkyson v. Disney Enterprises, Inc. (2016) _ Cal.App.4th _ , 2016 WL 695707: See summary above under Civil Procedure.

Real Property (Declaration of Nonmonetary Status, Landlord – Tenant, Mechanic’s Liens)

Bae v. T.D. Service Company (2016) _ Cal.App.4th _ , 2016 WL 742198: See summary above under Civil Procedure.

Boston LLC v. Juarez (2016) _ Cal.App.4th _ , 2016 WL 742231: The Court of Appeal overruled the superior court appellate department’s affirmation of the trial court’s unlawful detainer judgment for plaintiff landlord, arising from defendant tenant’s failure to obtain insurance required by a lease that was subject to the Los Angeles Rent Stabilization Ordinance. The Court of Appeal concluded that a tenant’s breach must be material to justify forfeiture. Because tenant’s obligation to obtain and pay for insurance protected the tenant’s interest, not the landlord’s, the tenant’s failure to obtain a policy could not harm the landlord and therefore was not a material breach of the lease justifying forfeiture. (C.A. 2nd, February 25, 2016.)

Picerne Construction Corp. v. Castellino Villas (2016) _ Cal.App.4th _ , 2016 WL 653961: The Court of Appeal affirmed the trial court’s judgment for plaintiff, but reduced the amount to reflect a setoff. The Court of Appeal concluded that (1) plaintiff timely recorded its mechanic’s lien; (2) defendant failed to demonstrate the applicability of judicial estoppel; (3) the property constituted one residential unit; (4) the trial court overstated the principal sum due and failed to subtract a $115,453.50 setoff from the principal sum, but the other claims of error with regard to the lien amount had no merit; and (5) the action against Bank of the West was not time-barred because plaintiff timely substituted Bank of the West in place of a Doe defendant when plaintiff learned of the bank’s interest in the property. The judgment was affirmed but modified to provide that the mechanic’s lien was in the amount of $2,416,855.06. (C.A. 3rd, February 18, 2016.)

Torts (Wrongful Death)

Pipitone v. Williams (2016) _ Cal.App.4th _ , 2016 WL 718475: The Court of Appeal affirmed the trial court’s summary judgment for defendants. Plaintiff sued defendant doctors for the wrongful death of her daughter for  allegedly failing to report suspected abuse to the authorities as required by Penal Code section 11160. Plaintiff’s daughter was killed by her husband several months after defendants treated her after her husband ran over her foot with his truck. During the treatment, plaintiff’s daughter did not reveal to the doctors the true origin of her injury. The trial court correctly found no triable issue of fact regarding the elements of duty and causation. (C.A. 6th, February 23, 2016.)

Trusts and Estates

Hill v. Superior Court (Staggers) (2016) _ Cal.App.4th _ , 2016 WL 659909: The Court of Appeal reversed the trial court’s summary judgment for defendant on the basis that the double damages sought against defendant under Probate Code section 859 were precluded under Code of Civil Procedure section 377.42. The Court of Appeal disagreed, concluding that double damages under section 859 are not punitive damages recoverable under Civil Code section 3294. (C.A. 1st, February 18, 2016.)

 See Ca. opinions at:  http://www.courts.ca.gov/opinions.htm
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