California Supreme Court
POLLOCK v. TRI-MODAL DISTRIBUTION SERVICES
Plaintiff Pamela Pollock brought a claim against Defendants Tri-Modal Distribution and Michael Kelso for failure to promote her because she refused to have sex with Kelso in approximately 2016. In March of 2017, Leticia Gonzales received and accepted a promotion, and on May 1, 2017 the promotion took effect. The question for the court was when the offensive employment conduct “occurred.” There are two possible interpretations regarding when a failure to promote occurs: (1) when the person seeking the promotion is informed or put on notice that they did not receive the promotion, or (2) when the employer decides not to promote the individual.
The FEHA was enacted to provide effective remedies to deter and prevent unlawful employment practices. The purpose was to remedy the well-recognized reality that employment discrimination “foments domestic strife,” “deprives the state of the fullest utilization of its capacities for development,” and “adversely affects the interest of employees, employers, and the public in general.” As such, finding an action “occurred” when an employer decides not to promote an individual, without any regard for notice to the employee, runs contrary to the purpose of the FEHA. Furthermore, the FEHA should not be interpreted to impose serious practical difficulties on employees as they try to vindicate their rights. Thus, what starts the clock is the employee’s actual or constructive knowledge of the employer’s decision. Additionally, as the statute of limitations is an affirmative defense, the burden of proof is on the defendant to establish that plaintiff “knew or should have known of the adverse promotion decision.”
California Rules of Court Rule 8.278 states that a prevailing party is entitled to costs on appeal. Under the FEHA, a prevailing defendant may not be awarded fees and costs unless the court finds the action was “frivolous, unreasonable, or ground less when brought, or the plaintiff continued to litigate after it clearly became so.” The FEHA refers to “the court” without specifying the trial court or appellate court. The legislative history reveals that the requirement was added to reflect that “public policy that society should incentivize enforcement of our civil rights laws.” Therefore, to interpret the FEHA’s fee provision as only applying to trial courts would undermine the very purpose of the fee provision.
California Supreme Court. Filed 7/26/2021. 11 Cal.5th 918. Opinion by Justice Liu.
SHALABI v. CITY OF FONTANA
Plaintiff Luis Shalabi filed a lawsuit on December 3, 2013 against the City of Fontana for the wrongful shooting and death of his father in May of 2011. At the time the shooting occurred, plaintiff was a minor. Plaintiff’s birthday was December 3, 1993. He reached majority on December 3, 2011 and filed his original complaint on December 3, 2013. California Code of Civil Procedure Section 12 provides that the general rule for computing when a plaintiff must bring a cause of action is to “exclude the first day of the limitation period and include the last day.” Given the need to establish a method of computing time that promotes clarity and stability, an exception to the general rule must be clearly expressed.
The age-based tolling statutes do not clarify whether the Legislature intended to include the first day after the tolling period ends in calculating the statute of limitations. The Legislature enacted tolling periods for minors to protect their rights from being destroyed, as they lack the understanding or experience of adults. As such, including the last day of the limiting period promotes those same goals.
California Supreme Court. Filed 7/12/2021. 11 Cal.5th 842. Opinion by Chief Justice Cantil-Sakauye.
California Courts of Appeal
BRAGANZA V. ALBERTSON’S LLC
This was a slip and fall case. Albertson’s moved for summary judgment on three grounds. One of the three grounds involved expert testimony to the effect that even when the floor was wet, the floor had sufficient friction such that there was no dangerous condition on the property. Plaintiff did not oppose the MSJ, but instead sought a continuance to provide adequate time for her expert to do a site inspection and prepare an opposing declaration. The trial court denied the continuance and granted summary judgment based upon the unopposed motion.
Here, there was no diligence because the plaintiff knew well prior to the filing of the MSJ that a site inspection as well as expert testimony concerning dangerous conditions on the property would be necessary. The plaintiff failed to perform the site inspection until after the MSJ hearing date due to an unjustified concern that the “usual expert” retained by plaintiff’s counsel had a conflict of interest. This was not diligence.
The main takeaway from this case is that when an MSJ lands on your lap, counsel should immediately evaluate what discovery, if any, is still incomplete and necessary to oppose the motion, and then immediately seek that discovery. The court was not impressed by the fact that the plaintiff waited six weeks after the MSJ was served to demand a site inspection, since that six-week delay necessarily made it impossible for the plaintiff to complete the site inspection before the MSJ opposition was due.
Fourth District, Division 2. Filed July 29, 2021. 67 Cal.App.5th 144. Opinion by Justice Fields.
BRILEY v. CITY OF WEST COVINA
INTERNAL EXHAUSTION PROCEDURES MUST SATISFY BASIC DUE PROCESS
An employee must generally exhaust all available administrative remedies before resorting to court action. One exception to this requirement is where the administrative review fails to satisfy due process – where the employee is not provided with a “reasonably impartial, non-involved reviewer.” This occurs where a reviewer “has become personally embroiled in the controversy to be decided.”
Plaintiff Briley worked for Defendant West Covina as a Deputy Fire Marshall. He complained about his supervisor’s behavior, and the City investigated but found his complaints without merit. While that investigation was pending, the City began investigating Briley himself for unprofessional conduct, and that second investigation led to Briley’s termination by his supervisor. Briley initiated an internal administrative appeal but abandoned the appeal, claiming it violated his due process rights, and filed suit under Labor Code 1102.5. The City sought to have the case dismissed for failure to exhaust the internal proceeding. The trial court bifurcated that issue and ruled that the internal administrative proceeding did violate Briley’s due process rights because Briley’s supervisor would ultimately decide its outcome, and the supervisor’s own conduct had been implicated in Briley’s original complaints. Briley went on to obtain a jury verdict of about $4 million, $3.5 million of which was for emotional distress. The City’s motion for new trial was denied, and it appealed.
The appellate court affirmed the trial court’s determination that Briley’s failure to exhaust the City’s administrative procedure was excused because he was not afforded adequate due process. The Court noted that while “the standard of impartiality required at an administrative hearing is less exacting than that required in a judicial proceeding” where, as in this case, the decisionmaker “has been the target of personal abuse . . . from the party before him [or her],” or “has become personally `embroiled’ in the controversy to be decided,” due process could not be assured, and an employee was entitled to go directly to court.
The appellate court remanded the case on damages unless Briley agreed to accept a remittitur of $1.1 million in emotional distress damages. The three Justices concluded that the limited testimony regarding Briley’s emotional distress, which did not include any apparent physical symptoms and very limited therapy, suggested that the jury’s award of non-economic damages was the result of passion or prejudice, aided in part by Briley’s counsel’s personal attack on the City’s attorney during closing argument.
Congratulations to CELA members Oshea Orchid of Public Employees Legal, LLP and Douglas Benedon of Benedon & Serlin, LLP.
Second District, Division 4. Filed July 1, 2021. 66 Cal.App.5th 119. Opinion by Presiding Justice Manella.
FISHER V. MONEYGRAM INTERNATIONAL, INC.
The plaintiff, a disabled veteran, used MoneyGram to send money to scammers. Upon learning of the scam, he sued MoneyGram for failing to warn and failing to have legally adequate fraud protections in place. MoneyGram moved to compel arbitration based on an illegible and one-sided agreement.
In the procedural unconscionability analysis, “oppression” refers to a lack of meaningful choice, whereas “surprise” refers to attempts to hide the agreement. MoneyGram argued there was no procedural unconscionability because Fisher did not have to send money via MoneyGram: he had other options for sending money. Thus, according to MoneyGram, there was no “absence of meaningful choice.” The Court rejected the argument, holding that the existence of “meaningful choice” does not defeat a claim of procedural unconscionability where the party with greater bargaining power tries to hide the agreement through illegible print. The Court did not expressly hold that arbitration agreements must be printed in a certain font size, but there is dicta to the effect that generally, anything less than 8-point font is too small to read, and thus procedurally unconscionable.
The Court noted that, even if there was a low degree of substantive unconscionability, the agreement was unenforceable because procedural unconscionability was through the roof. The Court also held severance was not appropriate because it was clear MoneyGram was attempting to make arbitration an inferior forum.
First District, Division 4. Filed June 29, 2021, publication ordered July 27, 2021. 66 Cal.App.5th 1084. Opinion by Acting Presiding Justice Streeter.
GALLANO v. BURLINGTON COAT FACTORY OF CALIFORNIA LLC
This case involved two related appeals, both addressing the elements of an anti-SLAPP motion in the context of a class action involving egregious conduct by Burlington. Gallano worked as a retail clerk for Burlington at its Daly City store. Through no fault of her own, the store suffered losses due to fraudulent returns and shoplifting. As a result, and following company policy, Gallano was told that if she signed a letter of resignation and a promissory note for the losses, Burlington would take no criminal action against her. Gallano signed the documents and then filed a class action in San Mateo Superior Court challenging the policy, despite the fact that Burlington had never collected on the note.
On an anti-SLAPP motion, a defendant must show its actions arose from protected conduct. Then, the plaintiff has the burden to demonstrate only that her claims have “minimal merit,” not that she will necessarily prevail. On appeal, an anti-SLAPP motion is subject to de novo review, and the plaintiff’s burden is simply to show a legally sufficient claim. The plaintiff’s evidence is accepted as true. In a prior unpublished decision (Gallano I), the First District reversed the trial court’s denial of Burlington’s anti-SLAPP motion and its determination that Burlington’s conduct amounted to extortion. It remanded to the trial court to address the second prong of the SLAPP analysis: whether Gallano had demonstrated a likelihood of success on the merits of her claim. [The decision does not explain the basis of Gallano I’s conclusion that Burlington’s conduct was protected, but it appears that the court concluded that Burlington’s conduct was related somehow to the “shopkeeper’s privilege” delineated in Penal Code 490.5.] The appellate court ordered the case back so the trial court could examine the second prong of the SLAPP analysis, namely whether Gallano could demonstrate a likelihood of prevailing on her claims, thereby defeating Burlington’s motion.
A unanimous Division One panel held that the trial court got most of it right the second time: Gallano could demonstrate “minimal merit” (aka a “legally sufficient claim”) under Labor Code 2802 because she had “incurred” liability for expenses related to her job, despite the fact that Burlington had never collected on the promissory note and said it would not do so in the future. For the same reason, Gallano’s claim under the UCL (B& P 17200) had merit. Her “injury in fact” – a required element of this claim – was the imposition of an unlawful debt, namely the promissory note she had been forced to sign. Burlington could not undermine her standing by simply offering never to collect on the debt and to not seek fees if its SLAPP motion was successful. In other words, the involuntary and unsolicited receipt of relief (especially after a SLAPP motion is filed) does not make a plaintiff ineligible to be a class representative. This was akin to “picking off” a class rep. The appellate court dismissed Gallano’s claim under Labor Code 1198, reiterating that there is no private right of action, and such a claim could only be asserted under PAGA.
Congratulations to CELA members Monique Olivier and Christian Schreiber of Olivier Schreiber & Chao.
First District, Division 1. Filed 8/16/21. 67 Cal.App.5th 953. Opinion by Justice Sanchez.
HARRIS v. ROJAS
Plaintiff George Harris sued Defendant Abel Rojas for breach of contract regarding a commercial lease. Rojas cross-complained for negligence. The parties also were involved in an unlawful detainer case regarding the same property, but both sides failed to file a notice of related case. After three years of litigation, the jury awarded Harris $6,450 and also awarded Rojas an identical $6,450 on his cross-complaint. Harris had originally requested $200,000 in damages. Harris moved for nearly $300,000 in attorney’s fees pursuant to a clause in the commercial lease permitting the “prevailing party” to recover attorney’s fees. The trial court denied the fee request, finding that there was no prevailing party. Harris appealed.
The Court of Appeal agreed that Harris was not the prevailing party. First, Harris ignored that the jury found against him on the cross-complaint, in the exact same amount as was awarded to him, which the Court found a telling move by the jury. Harris also ignored the fact that he was not the prevailing party in the unlawful detainer case, in which Rojas secured a judgment against Harris for $13,000. When taken together, Rojas had ended up with a net recovery, and Harris had “decisively lost the war.” The Court of Appeal held that the trial judge has discretion to decide the “victory” is “pyrrhic” and that in actuality neither party prevailed in the case.
The Court of Appeal chastised both sides for failing to file a notice of related case, which unnecessarily complicated proceedings at both the trial court and appellate levels. The Court found this failure, and the lack of explanation for it, “discreditable.” The Court of Appeal also decried the lack of anything even approximating a complete record. There was no reporter’s transcript for the trial, and most of the filings from the underlying litigation were not provided either.
Second District, Division 8. Filed 7/20/21. 281 Cal.App.5th 817. Opinion by Justice Wiley.
HARRIS v. THOMAS DEE ENGINEERING CO., INC.
Plaintiff Beth Harris filed a wrongful death action alleging that her husband, who passed away from mesothelioma, was exposed to asbestos when he worked cleaning a naval vessel in 1973. Plaintiff engaged an expert witness who was deposed prior to the filing of any dispositive motions. During his deposition, the expert testified that the decedent likely needed to be present when boilers were actively being removed to be exposed to asbestos. The expert testified decedent’s work cleaning a naval vessel would likely not have been enough to cause exposure. After Defendant filed a motion for summary judgment, the Plaintiff had its expert submit a declaration stating that the Plaintiff’s work on the site after the boilers were removed could have caused exposure, because the asbestos particles remained in the area, and any disturbance (i.e., through cleaning or other means) would cause them to become airborne and thus lead to exposure. Defendant argued that because this was an opinion not disclosed in the expert’s deposition – and to an extent, directly contradicted the deposition testimony – Plaintiff could not rely on it at summary judgment. The trial court granted the MSJ.
The Court of Appeal reversed the grant of summary judgment. The Court stated that, for summary judgment purposes, an expert opinion not previously disclosed could still be used to oppose a dispositive motion, and it was for the jury to decide on issues of credibility. The oft-cited D’Amico case held that a declaration that contradicts previous deposition testimony may not create a triable issue of fact, not that the declaration is inadmissible. Here, the contradiction in testimony did not eliminate the declaration’s evidentiary value. D’Amico refers to admissions against interest, but here the issue was a scientific theory that the expert did not discuss during deposition. The declaration did not contradict any facts from the deposition, and the declaration explained the difference in the expert’s opinion between the deposition and the declaration. The trial court was therefore not entitled to give the expert declaration no weight.
First District, Division 5. Filed 9/2/21 after rehearing. 68 Cal.App.5th 594. Opinion by Acting Presiding Justice Simons.
HERRERA v. DOCTORS MEDICAL CENTER OF MODESTO, INC.
When the United States Supreme Court issued its landmark decision of Epic Systems Corp. v. Lewis upholding class action waivers, defense attorneys in California immediately hailed the decision as a direct repudiation of Iskanian v. CLS Transp. Los Angeles. They began filing appeals arguing that claims brought under the Labor Code Private Attorneys General Act of 2004 (“PAGA”) must be compelled to arbitration, arguing that the Federal Arbitration Act (“FAA”) preempted PAGA. The issue made its way to the California Supreme Court, which, in ZB, N.A. v. Super. Ct. “Lawson”, reinforced Iskanian’s holding and reiterated that a PAGA action is one on behalf of the state, not the PAGA representative individually, and that the state is never a party to (nor does it ratify) a private arbitration agreement between employer and employee. The state therefore cannot be forced to arbitrate claims for PAGA civil penalties based on agreements the PAGA representative signed before representing the PAGA action.
This case is the latest in that line of appeals that sought to transpose Epic’s logic regarding class actions to the PAGA context. Each of these appeals has failed. This case is no different. The twist here was that the employer also argued that the trial court had erred by failing to consider that the PAGA claims required an interpretation of a collective bargaining agreement (“CBA”), and therefore they were preempted by the Labor Management Relations Act (“LMRA”). The Fifth Appellate District rejected this theory, finding that the employees in question were nonunion employees and therefore not covered by a CBA, nor had Defendant raised the issue in its opening brief, waiting instead for the reply.
Congratulations to CELA members Michael Singer of Cohelan Khoury & Singer and Walter Haines of United Employees Law Group.
Fifth District. Filed 8/5/21, modified 9/1/21. 67 Cal.App.5th 538. Opinion by Acting Presiding Justice Franson.
JACKSON V. PARK
John H. Park (Park) struck a trailer towed by Bryce Jackson (Jackson). The police officer who responded to the accident administered a breathalyzer test and arrested Park for driving under the influence of alcohol. Jackson filed a personal injury complaint against Park seeking compensatory damages for negligence and punitive damages based on Park’s intoxication. At trial, the court excluded evidence of Park’s arrest and conviction for driving under the influence. The court ruled that the police officer could testify about the result of Park’s breathalyzer if he could provide sufficient foundational testimony regarding the use and operations of the machine used to administer the test. Prior to the officer’s testimony at trial, Jackson’s attorney confirmed that, in accordance with the court’s ruling, neither he nor the witness would mention the arrest or the results of the breathalyzer test. Notwithstanding, the officer discussed blood alcohol levels and testified to the arrest of Park. The court struck the police officer’s testimony. Thereafter, Jackson’s counsel violated various other rulings such as arguing matters not in evidence. At the conclusion of trial, Park’s attorney moved for a mistrial, which the court granted. Park appealed.
The Court of Appeal held that it is improper for counsel to assert or imply facts not in evidence that counsel knows could be refuted by evidence that the court has excluded. The Court further held that it is improper to argue facts not in the record and continue to argue those facts after the court has instructed counsel to stop. Based on these findings and the record below, the Court held that the trial court did not abuse its discretion in granting Jackson’s motion for a new trial.
Second District, Division 7. Filed 7/27/21. 66 Cal.App.5th 1196. Opinion by Justice McCormick.
JAMIE ZEPEDA LABOR CONTRACTING V. DIVISION OF INDUSTRIAL RELATIONS
The DLSE issued citations under Labor Code section 1197.1 for failure to pay the minimum wage and related penalties because certain workers who had separated were not paid all minimum wages by their final day of work or within 72 hours, as required by Labor Code sections 201 to 202. Employers appealed to the Superior Court, which granted a Petition for Writ of Administrative Mandate ordering the DLSE to dismiss the citations because the employers at issue paid at least the minimum wage to all workers on or before the regular payday. The applicable IWC Wage Order, No. 14, requires that minimum wages be paid “on the established payday for the period involved.” Labor Code section 205 requires that farm labor contractors establish regular paydays at least once per week. The employers at issue established a regular payday and paid at least the minimum wage to all workers on or before the regular payday.
The Court of Appeal affirmed the trial court’s ruling that a farm labor contractor’s failure to pay all final wages, including minimum wages, to separated employees based on the deadlines set forth in Labor Code sections 201 to 202 does not trigger a minimum wage violation pursuant to Labor Code section 1197.1. The worker may be entitled to penalties set forth in Labor Code section 203 for “waiting time” penalties but is not entitled to penalties for a minimum wage violation. As a result, the minimum wage citations were dismissed.
Fourth District, Division 1. Filed 8/12/21. 67 Cal.App.5th 891. Opinion by Justice Aaron.
JOHNSON v. MAXIM HEALTHCARE SERVICES
Plaintiff Gina Johnson filed a PAGA suit against her employer Maxim Healthcare Service for the continued use of a noncompetition clause in its labor agreements that was prohibited under California law. Her individual claim was time-barred. The issue was whether she had standing to bring the claim as a PAGA representative. An employee bringing a PAGA claim “does so as the proxy or agent of the state’s labor law enforcement agencies.” It is not an individual claim, but rather a dispute between the employer and state. To have standing to bring the claim, the employee must be a “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”
As Kim v. Reins established, PAGA standing does not depend on maintaining an individual labor claim. In Kim, the Plaintiff settled their individual claim. There the Court held that an aggrieved employee had standing to pursue a PAGA claim regardless whether the employee maintained a separate Labor Code claim. Rather than relying on a narrow interpretation of Kim, as applying only to settlements, the Court found that Kim compelled the same result in Johnson’s case. Therefore, the fact that her individual claim was time-barred did not affect her standing to bring a PAGA suit.
Congratulations to CELA member Tamim Jami of The Jami Law Firm P.C.
Fourth District, Division 1. Filed 7/21/2021. 66 Cal.App.5th 924. Opinion by Justice Huffman.
JOLIE V. SUPERIOR COURT (PITT)
Angelina Jolie (Jolie) filed a statement of disqualification challenging Judge John W. Ouderkirk (Ret.), the privately compensated temporary judge selected by Jolie and William Bradley Pitt (Pitt) to hear their family law case. The statement of disqualification was based on Judge Ouderkirk’s failure to disclose his ongoing professional dealings with Pitt’s counsel. The trial court held that Jolie’s statement was untimely because earlier disclosures “put Jolie on notice that Judge Ouderkirk had a significant history of serving on cases in which [Pitt’s attorney] represented one of the parties,” and that the information that was not disclosed would not cause a person to doubt Judge Ouderkirk’s ability to be impartial.
Jolie filed a petition for writ of mandate, arguing her statement of disqualification was timely and that Judge Ouderkirk’s failure to make mandatory disclosures, as required by the California Code of Judicial Ethics, might cause an objective person to doubt his ability to be impartial. The Court of Appeal agreed, finding that Judge Ouderkirk had failed to disclose cases on which he was appointed, and which Pitt’s attorney was counsel of record, and that while they were disclosed upon request, a judge has an obligation to disclose such professional dealings “as quickly as possible and practicable.” The Court of Appeal further held the Judge Ouderkirk’s failure to disclose these dealings in a timely manner created a reasonable doubt as to impartiality. As such, the Court of Appeal and vacated the superior court’s order denying the request to disqualify Judge Ouderkirk.
Second District, Division 7. Filed 7/23/21. 66 Cal.App.5th 1025. Opinion by Presiding Justice Perluss.
LAW FINANCE GROUP, LLC v. KEY
Plaintiff Law Finance Group (“LFG”) prevailed in an arbitration against Defendant Key regarding an underlying action to enforce a loan agreement. The arbitrators awarded LFG $778,351 in damages, plus attorney fees and costs. LFG then filed a petition to confirm the arbitration award in Superior Court. Four months after LFG filed the motion, and 130 days after service of the arbitration award, Key filed a motion to vacate the arbitration award. Key argued the arbitrators had exceeded their authority under the arbitration agreement. Nine days later, Key filed an opposition to LFG’s petition to confirm the award, which addressed the exact same issues. The trial court agreed that the arbitrators exceeded the scope of their authority and vacated the arbitration award. LFG appealed, and the Court of Appeal reversed.
The Court of Appeal cited Code of Civil Procedure section 1288, which requires that a petition to vacate an arbitration award be filed and served not later than 100 days after service of the award. The Court also noted that Section 1288.2 imposes the same deadline on a response to a petition to confirm an arbitration award when the response requests that the award be vacated. The Court specifically found that these deadlines are jurisdictional. Because both Key’s own petition to vacate the award and her opposition to LFG’s motion to confirm the award were filed more than 100 days after service of the final arbitration award, the trial court lacked jurisdiction to vacate the arbitration award.
Second District, Division 2. Filed 7/30/21, modified on denial of rehearing 8/19/21. 67 Cal.App.5th 125. Opinion by Presiding Justice Lui.
LEBRUN V. CBS STUDIOS, INC.
Defendant CBS Studios hired actors and paid a jewelry store owner for use of the store to film an episode of NCIS: New Orleans in Louisiana. However, CBS did not notify local police or neighbors that a staged armed robbery would occur. During filming, local police came with a SWAT Team, broke down a door and arrested actors for armed robbery. The store owner’s business and the actors’ careers were allegedly damaged. A lawsuit for fraud was filed in Louisiana after the Louisiana statute of limitations had expired. Plaintiffs refiled in California based on CBS’ ratification of conduct in California and sought to use California’s longer statute of limitations for fraud. The trial court dismissed the fraud claim on demurrer because the fraud claim had already expired in the originating state—Louisiana. Plaintiffs appealed, and the Court of Appeal affirmed.
A person who engages in conduct in California to ratify fraudulent conduct by an agent in a different state may be sued in California for damages resulting from that fraud. However, Code of Civil Procedure section 361 provides that a cause of action arising in another state cannot be pursued in California if it has expired by the lapse of time in the original state. CBS’s alleged ratification simply rendered CBS liable for Wells’ acts. The ratification itself was not independently wrongful and did not cause any separate injuries, so it was not an independent claim occurring in California. Accordingly, California’s fraud statute of limitations does not apply. Thus, the fraud claim was time-barred under Louisiana law and California Code of Civil Procedure Section 361.
Second District, Division Four. Filed 8/25/21. 68 Cal.App.5th 199. Opinion by Justice Willhite.
PEOPLE ex rel. ALLSTATE INSURANCE CO. v. RUBIN
Plaintiff Allstate filed a qui tam lawsuit against a medical doctor (Defendant Sonny Rubin), alleging that he engaged in insurance fraud in connection with preparation of medical billing reports. Rubin provided treatment exclusively to clients referred by attorneys who prosecuted personal injury cases. Rubin filed an anti-SLAPP motion, claiming that the preparation of the medical billing reports was constitutionally protected activity done in preparation for the “possibility” of litigation. Rubin claimed this constituted protected activity, arguing that the medical billing statements were created in anticipation of a “judicial proceeding” under the anti-SLAPP statute. The trial court denied Rubin’s anti-SLAPP motion. Rubin appealed, and the Court of Appeal affirmed.
The Court of Appeal held that if litigation is merely a “possibility,” then action taken in preparation for it is not protected under the anti-SLAPP statute. Here, submission of medical billing for insurance claims did not constitute activity undertaken in preparation for litigation. Rubin failed to show that the medical billing reports were prepared outside of his normal course of business. Absent that showing, there was no evidence that the medical billing reports were prepared in “serious anticipation” of litigation and were not an act in furtherance of the right of petition, as contemplated by the anti-SLAPP statute. Thus, the preparation of these reports did not constitute protected activity under the anti-SLAPP statute.
Fourth District, Division 3. Filed 6/28/21, modified on denial of rehearing 7/22/21. 66 Cal.App.5th 493. Opinion by Justice Moore.
QAADIR V. FIGUEROA
Plaintiff Malak Melvin Abdul Qaadir brought a personal injury action against Defendants Pacifica Trucks LLC and Ubaldo Durrola Figueroa, a tractor-trailer driver and his employer, to recover for injuries suffered during a motor vehicle accident. Defendants admitted liability, and the case went to trial on this issue of damages. Before trial, Defendants filed a motion in limine to exclude evidence of Qaadir’s unpaid medical bills, and the trial court denied the motion. Qaadir submitted evidence at the trial of his paid and unpaid medical bills, which totaled $838,320.20. Using benchmark data from medical providers in the relevant geographical area, Qaadir’s expert opined that the reasonable value of Qaadir’s medical bills totaled $632,456. Using similar data, Defendant’s expert opined that the reasonable value was $174,111. The jury awarded $532,000 for past medical expenses and $500,000 for future medical expenses. Defendants appealed, arguing that the trial court erred when it admitted evidence of the full unpaid medical bills.
The Court of Appeal held that the trial court abused its discretion by admitting evidence of the full unpaid medical bills without first requiring Qaadir to demonstrate that the evidence was admissible by showing he had actually incurred those amounts. The Court of Appeal explained that an award of past medical expenses is limited to the lesser of: (1) the amount paid or incurred, and (2) the reasonable value of the services rendered. (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 556.) For Qaadir then, evidence of his unpaid medical bills was admissible only if he could show he actually incurred those amounts. Notwithstanding, the Court of Appeal found that the error was harmless because the jury’s past medical expenses award fell within the valuations provided by the two experts, who did not rely on the unpaid medical bills to reach their valuations.
Second District, Division 8. Filed 8/11/21, as modified 8/16/21. 67 Cal.App.5th 790. Opinion by Justice Ohta,
RIVELLI v. HEMM
Rivelli, a former board member and shareholder of medical device manufacturer Rodo, a California corporation, sued a Swiss company (Straumann) and its executive (Hemm) for fraud, breach of fiduciary duty, and other claims. All claims arose from a contract that Hemm helped negotiate between Straumann and Rodo. Rivelli claimed the deal was unfavorable to Rodo and that Straumann, with Hemm’s help, had defrauded Rodo shareholders. Hemm and Straumann sought to quash service of the complaint, claiming that California courts lacked personal jurisdiction over them. The trial court quashed service, and Rivelli appealed.
The appellate court unanimously agreed with the trial court, noting that issues of personal jurisdiction are “intensely fact specific” and that courts must exercise “great care” and an “abundance of caution” analyzing jurisdiction where the defendants are international corporations or individuals. Here, the plaintiff failed to carry his burden of showing that Straumann and Hemm: (1) purposely availed themselves of the privilege of conducting business in California; and (2) the claims that plaintiff brought directly arose from each defendant’s actions. Each defendant’s conduct within California must be evaluated separately, and the plaintiff must produce sufficient evidence, more than vague allegations, to establish that the defendant’s actions would support the claims asserted against that defendant.
Sixth District. Filed 8/2/21. 67 Cal.App.5th 380. Opinion by Justice Danner.
SWENBERG v. DMARCIAN, INC.
Plaintiff Swenberg was employed by email software company dMarcian, a Delaware corporation based in California and run by several executives, including a Dutch citizen, Groeneweg. After raising concerns about dMarcian’s unfulfilled promises of stock and pay, Swenberg was fired. He sued for breach of various oral contracts and breach of fiduciary duties, naming dMarcian and other executives, including Groeneweg. Groeneweg filed a motion to quash for lack of personal jurisdiction. Groenweg provided a declaration stating that he had never set foot in California and was an executive of dMarcian EU, a separate Dutch company that did business with but was not part of the US company. The trial court granted his motion, and Swenberg appealed.
The Court of Appeal unanimously overruled the trial court, finding that although Groeneweg submitted a declaration claiming he was not part of dMarcian US, that evidence was insufficiently specific to overcome Swenberg’s evidence (some from independent sources such as a web page shared by the two companies and a LinkedIn reference to Groeneweg’s connection to the US company) that Groeneweg had participated in the business of dMarcian US and had directly benefitted from sales leads generated from California. A defendant cannot defeat a plaintiff’s evidence of jurisdiction with a vague, conclusory declaration. Foreign individuals cannot conduct business, even remotely, and defeat jurisdiction if the claims asserted against them relate directly to the conduct of that business.
First District, Division 2. Filed 7/30/21, publication ordered 8/30/21. 68 Cal.App.5th 280. Opinion by Presiding Justice Kline.