California Case Summaries

by Monty A. McIntyre, Esq.

Monty A. McIntyre, Esq. is the publisher of California Case Summaries™, which provides monthly, quarterly and annual summaries, organized by legal topic, of every new published CA civil case—helping lawyers save time, win more, and make more money. Monty has been a California civil trial lawyer since 1980, a member of ABOTA since 1995, and is a mediator, arbitrator and referee at ADR Services, Inc., conducing Zoom hearings throughout California. To schedule a matter, contact Monty’s case manager Haward Cho, haward@adrservices.com or hawardSDteam@adrservices.com, (213) 683-1600. California Case Summaries™ (https://cacasesummaries.com).

Hoffmann v. Young (2022) _ Cal.5th_ , 2022 WL 3711715: After the landlowners’ son invited plaintiff to come to the property, plaintiff was injured while riding a motorcycle on a motocross track built on the property. The California Supreme Court reversed the Court of Appeal’s decision holding that an invitation by a landowner’s live-at-home child operated to activate the exception, under Civil Code section 846(d)(3), to the recreational use immunity under Civil Code section 846(a), unless the child had been prohibited from making the invitation. The California Supreme Court ruled that a plaintiff may rely on the recreational use immunity exception, under section 846(d)(3), and impose liability if there is a showing that a landowner, or an agent acting on his or her behalf, extended an express invitation to come onto the property. In this case, the record did not show that the son was authorized to extend an invitation on behalf of his parents. The case was remanded for the Court of Appeal rule on plaintiff’s claims that the trial court erred by denying her motion for a new trial on the negligence and premises liability claims. (August 29, 2022.)

Brawerman v. Loeb & Loeb LLP (2022) _ Cal.App.5th _ , 2022 WL 3053302: The Court of Appeal affirmed the trial court’s order affirming an arbitration award and denying plaintiff’s motion to vacate the award. The obligation to arbitrate arose from a provision in a law firm retainer agreement, but one of the several law firm attorneys that rendered legal services pursuant to the retainer agreement was not a licensed California lawyer. The Court of Appeal affirmed the award finding there was no error. The unlicensed attorney’s illegal practice of law pursuant to the retainer agreement did not render the entire retainer agreement illegal. (Birbrower, Montalbano, Condon & Frank v. Superior Court (1998) 17 Cal.4th 119). Moreover, an arbitration provision is severable from an agreement that is not entirely illegal (unless the arbitration provision itself is illegal). (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 30). The arbitration award found that respondents law firm and unlicensed attorney Christopher Kelly were liable to claimants’ for their failure to protect claimants’ control over a business when it obtained venture capital funding, or to disclose to them such lack of control, but claimants failed

to prove that this conduct caused them harm. The arbitrator also ordered disgorgement to claimants of $138,075 in fees paid for Kelly’s services while he was unlicensed and $94,933 for claimants’ fees incurred in the arbitration in connection with litigating this issue. (C.A. 2nd, August 3, 2022.)

Oswald v. Murray Plumbing & Heating Corp. (2022) _ Cal. App.5th _ , 2022 WL 4008088: The Court of Appeal reversed the trial court’s order denying defendant’s motion to compel arbitration in plaintiff’s lawsuit alleging violations of the Private Attorneys General Act (PAGA; Labor Code, section 2698 et seq.). While the right to file a PAGA action generally cannot be waived by contract, the Labor Code exempts construction workers from PAGA if a collective bargaining agreement (CBA) covers wages, hours and working conditions and (1) has a grievance and arbitration procedure to redress Labor Code violations; (2) clearly waives PAGA; and (3) authorizes the arbitrator to award all remedies available under the Labor Code. (Labor Code, section 2699.6(a).) The employment relationship between plaintiff and defendant was governed by a Master Agreement (Agreement) between plaintiff’s union and defendant’s contractor association, effective from 2017 to 2026. The Agreement was a CBA requiring arbitration of disputes—including ones arising under PAGA—as the sole and exclusive remedy. The Court of Appeal held, as a matter of law, that the CBA clearly waived PAGA and satisfied the requirements of Labor Code section 2699.6(a). The trial court was ordered to enter an order directing the parties to arbitrate their dispute. (C.A. 2nd, September 2, 2022.)

Cell-Crete Corp. v. Federal Ins. Co. (2022) _ Cal.App.5th _ , 2022 WL 4103354: The Court of Appeal reversed the trial court’s order denying defendant’s motion for attorney fees and taxing its request for costs. Defendant carrier was the prevailing party in a lawsuit plaintiff brought seeking to recover against defendant on a payment bond. After dismissal, the trial court denied defendant’s request for attorney fees and taxed its costs on the ground that defendant did not incur any fees or costs because a third party, Granite Construction Company (Granite), paid the fees and costs of defendant’s defense under an indemnity agreement between defendant and Granite. The Court of Appeal disagreed, concluding that defendant, as the prevailing party, was entitled to recover their reasonable attorney fees and costs anyway. (Civil Code, section 9564(c); Code of Civil Procedure, sections 1032(b), 1033.5(c)(1).) A party represented by counsel in an attorneyclient relationship is entitled to an award of fees and costs even if they have been or will be borne by a third party. (C.A. 4th, September 8, 2022.)

Gerlach v. K. Hovnanian’s Four Seasons at Beaumont, LLC (2022) _ Cal.App.5th _ , 2022 WL 3443648: The Court of Appeal affirmed the trial court’s rulings, before and during a jury trial, precluding plaintiff from making a claim manufactured roof defects under Civil Code section 896(g) (3)(A), or for roof defect claims under Civil Code section 896 (a)(4) or (g)(11). The Court of Appeal held that (1) a roof is a manufactured product within the meaning of section 896(g) (3)(A) only if the roof is completely manufactured offsite, and (2) to prove a roof defect claim under section 896(a)(4) or (g) (11), a plaintiff must prove that water intrusion has actually occurred or roofing material has actually fallen from the roof. (C.A. 4th, August 17, 2022.)

24th & Hoffman Investors, LLC v. Northfield Ins. Co. (2022) _ Cal.App.5th _ , 2022 WL 3754741: The Court of Appeal reversed the trial court’s order granting plaintiff’s motion for summary adjudication concluding that defendant had been obligated to defend an underlying lawsuit. Defendant issued a policy insuring an apartment owned by plaintiffs. The policy coverage excluded liability for violations of the insured’s duty to maintain a habitable premises, and the exclusion also encompassed coverage for “any claim or suit” that also alleged habitability claims. The trial court concluded defendant had a duty to defendant because the underlying lawsuit alleged both covered and uncovered claims. The Court of Appeal disagreed, concluding that the trial court erred because the plain terms of the contract excluded all of the claims in the underlying action. (C.A. 1st, August 30, 2022.)

Apple Annie, LLC v. Oregon Mutual Ins. Co. (2022) _ Cal. App.5th _ , 2022 WL 4007516: The Court of Appeal affirmed the trial court’s order granting defendant carrier’s motion for judgment on the pleadings in plaintiff’s action for damages under the policy because its restaurants were closed by the COVID-19 pandemic. The Court of Appeal agreed with the majority of other recent Court of Appeal decisions, concluding that a business that closed pursuant to a government shutdown order had not suffered “direct physical damage to” the business’s property as required under the business income coverage of a standard comprehensive commercial liability policy. The mere loss of use of physical property to generate business income, without any other physical impact on the property, did not give rise to coverage for direct physical loss. (C.A. 1st, September 2, 2022.)

Creditors Adjustment Bureau v. Imani (2022) _ Cal.App.5th _ , 2022 WL 3210462: The Court of Appeal affirmed the trial court’s order denying defendant’s motion to vacate a stipulated judgment entered against him for $251,200.13 after he failed to pay $30,000 as required pursuant to a stipulation for entry of judgment. Defendant argued the trial court erred because the judgment was an unenforceable penalty and therefore void. The Court of Appeal disagreed. Defendant was sued for breach of a lease. On the first day of trial the parties entered into a settlement agreement that included a stipulation for entry of judgment. The settlement agreement provided that defendant could fully satisfy his obligation by paying $30,000 in 24 consecutive monthly payments of $1,250 starting April 1, 2015. In the stipulated judgment defendant agreed that he owed $251,200.13 and if he defaulted in making the monthly payments a stipulated judgment could be entered against defendant in the sum of $251,200.13 together with reasonable attorneys fees in favor of plaintiff and against defendant, less any sums received by plaintiff. The stipulated judgment that defendant agreed to accept was the exact amount of damages suffered by plaintiff. Although defendant characterized the stipulated damages as a penalty and/or liquidated damage provision, it was not. (C.A. 2nd, August 9, 2022.) ZF Micro Solutions, Inc. v. TAT Capital Partners, Ltd. (2022) _ Cal.App.5th _ , 2022 WL 4090879: The Court of Appeal reversed the judgment for cross-defendant entered after the trial court ordered a bench trial, not a jury trial, because a cross-complaint alleged equitable issues. Cross-complainant ZF Micro Solutions, Inc. (Solutions), the successor of deceased entity ZF Micro Devices, Inc. (Devices), alleged crossdefendant TAT Capital Partners, Ltd. (TAT) “murdered” its predecessor Devices by inserting a board member who poisoned it. The trial court decided that the claim for breach of TAT’s fiduciary duty as a director was equitable rather than legal, and conducted a bench trial where it found for TAT. The Court of Appeal disagreed, concluding that the “gist” of Solutions’ claim against TAT was a request for compensatory damages for destroying its predecessor corporation. There were no equities to weigh, and no other relief was requested. Under settled law concerning the nature of equitable versus legal claims, this case exhibited all the characteristics of a claim at law. (C.A. 4th, filed August 8, 2022, published September 7, 2022.) n

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