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McIntyre’s Civil Alert. Organized Succinct Summaries

CALIFORNIA COURTS OF APPEAL

ARBITRATION
Pinela v. Neiman Marcus Group, Inc. (2015) _ Cal.App.4th _, 2015 WL 3955254: The Court of Appeal affirmed the trial court’s order denying a motion to compel arbitration. The trial court originally granted most of the motion to compel arbitration. The trial court later reconsidered its ruling and denied the motion to compel arbitration. The Court of Appeal found the trial court had jurisdiction to reconsider its earlier order. The Court of Appeal ruled that the delegation clause, and the agreement as a whole, were procedurally and substantively unconscionable. (C.A. 1st, June 29, 2015.)

ATTORNEYS
Castaneda v. Superior Court (Perrin Bernard Supowitz, Inc.) (2015) _ Cal.App.4th _ , 2015 WL 3892154: The Court of Appeal granted a writ petition challenging the trial court’s order denying a motion to disqualify a law firm. When an attorney serves as a settlement officer in a mandatory settlement conference conducted by a judge and two volunteer attorneys, if the attorney receives confidential information from one of the parties to the action that attorney’s law firm may not subsequently agree to represent an opposing party in the same action, regardless of the efficacy of the screening procedures established by the law firm. (C.A. 2nd, June 24, 2015.)

CIVIL PROCEDURE (998, ANTI-SLAPP, DEMURRER, PREEMPTION)
Eckler v. Neutrogena Corporation (2015) _ Cal.App.4th _ , 2015 WL 3989142: The Court of Appeal affirmed the trial court’s order in one action sustaining a demurrer without leave to amend, and its order in another action granting judgment on the pleadings. Plaintiffs filed separate actions against respondent Neutrogena Corporation alleging that their sunscreen products were misleadingly labeled and marketed in violation of California consumer protection statutes. The trial court properly concluded that the claims were preempted by the federal Food, Drug, and Cosmetic Act ( 21 U.S.C. § 379r) and implementing FDA regulations. (C.A. 2nd, filed June 9, 2015, published July 1, 2015.)

Finton Construction, Inc. v. Bidna and Keys, APLC (2015) _ Cal.App.4th _ , 2015 WL 3947116: The Court of Appeal affirmed the trial court’s order granting an anti-SLAPP motion against plaintiff for its complaint filed against attorneys based on their refusal to relinquish to the opposing parties’ evidence delivered to the attorneys by their clients in a trade secrets case. The Court of Appeal ruled the attorneys’ conduct was protected, and plaintiff was unable to demonstrate a probability of prevailing on its claim. The Court of Appeal decided to publish the case, after it was notified the case had settled, as “an example to the legal community of the kind of behavior the bench and the bar together must continually strive to eradicate.” (C.A. 4th, June 29, 2015.)
Litt v. Eisenhower Medical Center (2015) _ Cal.App.4th _ , 2015 WL 3799523. The Court of Appeal reversed that part of the trial court’s order denying costs and expert witness fees to Eisenhower Medical Center (EMC) after it beat its 998 offer, because the costs and expert fees were paid by another defendant Compass Group USA, Inc. (Compass) under an indemnity agreement between EMC and Compass. Code of Civil Procedure sections 998 and 1033.5 authorize the recovery of costs and expert fees that were incurred by the prevailing party, even if that party did not pay the costs. (C.A. 4th, June 19, 2015.)

Munoz v. City of Tracy (2015) _ Cal.App.4th _ , 2015 WL 3958324: The Court of Appeal reversed the trial court’s order granting a motion to dismiss for failure to bring the case to trial within five years. The parties signed a written stipulation that continued the trial to a specific date outside of the five-year period. The Court of Appeal found the stipulation properly extended the five-year period, and there was no need for the City to “expressly waive” the benefit of Code of Civil Procedure section 583.310. (C.A. 3rd, June 30, 2015.)
Parrish v. Latham & Watkins (2015) _ Cal.App.4th _ , 2015 WL 3933988 : The Court of Appeal affirmed the trial court’s order granting an anti-SLAPP motion by defendants, but for a different reason. Latham & Watkins had filed an anti-SLAPP motion to a malicious prosecution complaint, arguing that the action was untimely under the one-year statute of limitations in Code of Civil Procedure section 340.6, and alternatively arguing that the interim judgment rule precluded a finding of the lack of probable cause. The trial court granted the anti-SLAPP solely on the statute of limitations issue. During the appeal, however, the Court of Appeal ruled in Roger Cleveland Golf Co., Inc. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660 that the statute of limitations for malicious prosecution was two years under Code of Civil Procedure section 335.1. On appeal defendant conceded the complaint was timely under section 335.1. Plaintiffs argued the interim adverse judgment rule did not preclude the malicious prosecution action because the trial court had made a finding of bad faith after a bench trial in the underlying action, and this negated the trial court’s prior ruling denying summary judgment. The Court of Appeal concluded that this hindsight approach was inconsistent with a core principle of the interim adverse judgment rule—that an interim ruling on the merits establishes probable cause in the underlying action, even though that ruling is later reversed by the trial court, a jury, or an appellate court. (C.A. 2nd, filed June 1, 2015, published June 26, 2015.)

CLASS ACTIONS
Falk v. Children’s Hospital Los Angeles (2015) _ Cal.App.4th _ , 2015 WL 3895464. The Court of Appeal reversed, in part, the trial court’s order granting summary judgment to defendant on wage and hour claims after it rejected plaintiff’s argument that the filing of a prior class action tolled the limitations periods under American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 (American Pipe). On May 1, 2007, Thomas Palazzolo filed a class action against his former employer Children’s Hospital Los Angeles (Children’s). On April 7, 2009, the trial court granted summary judgment in favor of Children’s without addressing either class claims or class certification. Class certification was not raised or addressed on appeal. The court of appeal affirmed the trial court judgment and remittitur issued on February 3, 2011. Denise Mays filed a class action complaint against employer Children’s on January 27, 2012. Falk’s class action was filed on December 3, 2012. Under American Pipe, if class certification in an initial class action is denied, the statute of limitations is tolled from the time of commencement of that suit to the time of denial of certification for all purported members of the class who either make timely motions to intervene in the surviving individual action or who thereafter timely file their own individual actions. The Court of Appeal found that claims asserted in the earlier Palazzolo class action, although stated with less precision than Falk’s claims, gave Children’s notice of Falk’s claims. Falk’s claims were therefore tolled from May 1, 2007, until February 3, 2011, the date that remittitur issued in the Palazzolo case. Because 249 days had already run on Falk’s claims by the time the Palazzolo case was filed, she only had 116 days left to file her complaint to preserve any cause of action subject to a one-year limitations period. Even assuming that the Mays case started a new tolling period, 116 days from February 3, 2011, expired before Mays filed her class action on January 27, 2012. Falk’s wage statement claim, which was subject to a one-year limitations period, was therefore time-barred. But her remaining claims, which were subject to a three-year or four-year limitations period, were timely. (C.A. 2nd, filed June 3, 2015, published June 24, 2015.)

Munoz v. Chipotle Mexican Grill, Inc. (2015) _ Cal.App.4th _ , 2015 WL 3958999: The Court of Appeal dismissed an appeal. The Court of Appeal concluded that the trial court’s order denying plaintiffs’ class certification motion and granting defendant’s motion to deny class certification was a nonappealable order because PAGA claims remained in the trial court. The “death knell” doctrine did not apply under these circumstances. (C.A. 2nd, June 30, 2015.)

EMPLOYMENT
Cifuentes v. Costco Wholesale Corporation (2015) _ Cal.App.4th _ , 2015 WL 3932948: The Court of Appeal reversed the trial court ruling that under Lisec v. United Airlines, Inc. (1992) 10 Cal.App.4th 1500, 1507 (Lisec), Costco had improperly withheld federal and state payroll taxes when it paid plaintiff’s judgment for wages against his former employer. The Court of Appeal observed that in the 23 years since Lisec, the Internal Revenue Service and the vast majority of federal appellate courts had broadly interpreted the applicable Internal Revenue Code provisions as requiring an employer to withhold payroll taxes for all “wages” arising from the employer-employee relationship, even after that relationship has terminated. Persuaded by these authorities, the Court of Appeal concluded that Costco properly withheld the payroll taxes. (C.A. 2nd, June 26, 2015.)

REAL PROPERTY
Schafer v. City of Los Angeles (Triangle Center, LLC) (2015) _ Cal.App.4th _ , 2015 WL 3824134: The Court of Appeal affirmed the trial court’s peremptory writ of mandate directing the City to set aside a decision by the City’s planning commission that upheld a building permit allowing the restriping of a parking lot owned by Triangle Center, and to reinstate a decision by the City’s zoning administrator that denied the permit. Triangle Center and the City argued the evidence supported the planning commission’s decision that the City was equitably estopped from disallowing use of the property as a parking lot. The Court of Appeal concluded that the circumstances of this case did not justify an equitable estoppel against the City. This was not one of the rare and exceptional cases in which denying equitable estoppel would result in grave injustice. Allowing Triangle Center to establish land use rights contrary to the zoning restrictions and despite its failure to comply with the normal land use approval process would adversely affect public policy and the public interest. That adverse impact outweighed any unfairness to Triangle Center resulting from the failure to apply equitable estoppel. (C.A. 2nd, filed May 20, 2015, published June 19, 2015.)

Wells Fargo Bank v. 6354 Figarden General Partnership (2015) _ Cal.App.4th _ , 2015 WL 3978700 : The Court of Appeal affirmed the trial court’s calculation of the redemption price for real property sold by judicial foreclosure. The Court of Appeal construed Code of Civil Procedure section 729.060(c), which states: “Rents and profits from the property paid to the purchaser or the value of the use and occupation of the property to the purchaser may be offset against the amounts [included in the redemption price pursuant to] subdivision (b).” The trial court’s finding that the purchaser’s use and occupation of the unleased portion had no value was supported by substantial evidence so the trial court did not err in reducing the redemption price only by the rents paid. The Court of Appeal concluded that section 729.060(c) refers to net rents. Consequently, the redemptioner suffered no prejudice when the trial court subtracted the management fees and operating expenses related to the business of the renting units of the property from the redemption price. (C.A. 5th, July 1, 2015.)
Wong v. Stoler (2015) _ Cal.App.4th _ , 2015 WL 3862525: The Court of Appeal reversed the trial court’s judgment denying plaintiffs rescission of a real estate purchase contract due to fraud. The potential hardship that the sellers might suffer if the real estate contract was rescinded was not a proper basis for denying rescission due to the sellers’ fraud. (C.A. 1st, filed May 26, 2015, published June 23, 2015.)

SETTLEMENT
Epic Communications, Inc. v. Richwave Technology, Inc. (2015) _ Cal.App.4th _ , 2015 WL 3862491: The Court of Appeal reversed the trial court’s summary judgment for defendants who were strangers to the settlement agreement. Several provisions of the settlement agreement containing the release clause were not easily reconciled with its seemingly broad release language. The subsequent conduct of the contracting parties also appeared to be inconsistent with an intent to extend the release to unaffiliated third parties. The Court of Appeal concluded that in view of these ambiguities, the trial court erred by granting summary judgment in favor of strangers to the contract who raised the release as a defense. (C.A. 6th, June 23, 2015.)

TORTS
Bermudez v. Ciolek (2015) _ Cal.App.4th _ , 2015 WL 3826842 : The Court of Appeal affirmed the trial court judgment of $3,751,969 for plaintiff, but reduced the judgment by $46,175.41 of damages that were not supported by substantial evidence. Two cars crashed in an intersection as the light transitioned from green to yellow to red. Ciolek was turning left. Heacox was going straight. Ciolek’s car pushed Heacox’s car into plaintiff who was waiting on his bike on the sidewalk. The jury found both defendants Ciolek and Heacox were negligent, but concluded only Ciolek was “a substantial factor in causing harm” to plaintiff. The jury was entitled to conclude that Heacox slightly exceeded a reasonable speed when he entered the intersection, but that his speed was not a substantial factor in causing plaintiff’s injuries. (C.A. 4th, June 22, 2015.)

Navarrete v. Meyer (2015) _ Cal.App.4th _ , 2015 WL 3826660: The Court of Appeal reversed the trial court’s order granting summary judgment for defendant Meyer. Defendant Meyer’s act of telling the driver to drive faster raised triable issues for a jury as to whether to impose joint liability on Meyer for her conduct on the night in question on a theory of concert of action or conspiracy, and also as to whether she unreasonably interfered with the safe operation of a vehicle within the meaning of Vehicle Code section 21701. (C.A. 4th, June 22, 2015.)

Monty A. Mcintyre

Monty A. McIntyre follows his passions for the law and serving others by serving as a mediator, arbitrator and motion referee to help individuals, businesses and lawyers obtain rapid, reasonable resolution of disputes. He is also the Publisher of McIntyre’s California Civil Law Update and can be reached at 619-990-4312 or monty.mcintyre@gmail.com.

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About the Author: Monty A. McIntyre follows his passions for the law and serving others by serving as a mediator, arbitrator and motion referee to help individuals, businesses and lawyers obtain rapid, reasonable resolution of disputes. He is also the Publisher of McIntyre’s California Civil Law Update and can be reached at 619-990-4312 or monty.mcintyre@gmail.com.

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