Justia Civil Procedure Opinion Summaries

The Court of Appeal affirmed the trial court's order amending a judgment to add alter ego judgment debtors. After Triyar entered into a contract to purchase a hotel property from WSI, Triyar filed suit against WSI for causes of action including fraud and specific performance. The trial court found that WSI had not breached the contract, because Triyar's failure to learn of the Hyatt agreement's termination was due to Triyar's fault in failing to conduct a sufficient investigation. The trial court then awarded WSI $2,172,615 in attorney fees and costs. After Triyar appealed, the trial court awarded an additional $193,273.20 in fees and costs. After WSI was unable to collect any amount of the judgment, WSI made a motion to amend the judgment to add Steven Yari and Shawn Yari. The trial court found that Triyar is not capitalized for buying major hotels, and the finding that the Yaris were alter egos was a fair outcome. The trial court also found that even if the alter ego doctrine does not strictly apply, the inequities are such that an exception can be made.Under either de novo or abuse of discretion review, the court held that WSI prevailed on its motion to add the Yaris as judgment debtors. In this case, the Yaris concede that they had control of the underlying litigation and were virtually represented in that proceeding. The court also concluded that there is overwhelming evidence of a unity of interest and ownership such that the separate personalities of the entity and the owners do not exist. Furthermore, it would be inequitable to preclude WSI from collecting its judgment by treating Triyar as a separate entity. View "Triyar Hospitality Management v. WSI (II) – HWP, LLC" on Justia Law

Cahill was the office administrator for the Family Vision optometry practice and handled insurance billings. She left her employment and filed for bankruptcy protection. About 90% of Family’s revenue came from claims submitted to VSP, which covers claims from optometrists only if they have “majority ownership and complete control” of their medical practices. VSP disburses payments after the provider signs an agreement certifying itself as “fully controlled and majority-owned” by an optometrist. At the time Cahill was submitting Family’s claims, the practice was actually owned by a practice management company with more than 150 surgery centers and other medical practices.About a year after Cahill left Family, the trustee of Cahill’s bankruptcy estate sued under the Insurance Claims Fraud Prevention Act, 740 ILCS 92/1, which added civil penalties to existing criminal remedies for fraud against private insurance companies and allows a claim to be raised on the state’s behalf by a private person (relator), in a qui tam action. The relator becomes entitled to remuneration if the lawsuit succeeds. A relator must be an “interested person” but the Act does not define that term.The Illinois Supreme Court affirmed the reinstatement of the case. A former employee-whistleblower with personal, nonpublic information of possible wrongdoing qualifies as an “interested person” under the Act and need not allege a personal claim, status, or right related to the proceeding. The state need not suffer money damages to partially assign its claim to a relator. The Act is intended to remedy fraud against private insurers, where the only injury to the state is to its sovereignty, based on a violation of criminal law. View "Leibowitz v. Family Vision Care, LLC" on Justia Law

Trevor Jones contended he was entitled to a percentage of the successful Pura Vida bracelet business established with his former friends and colleagues, defendants Paul Goodman and Griffin Thall. He claimed the parties had formed a partnership regarding a bracelet business and sued Goodman and Thall seeking (among other things) a partnership buyout under California Corporations Code section 16701. Defendants denied Jones’s claims, and judgment was entered in their favor. After trial, Defendants sought to recover attorney fees pursuant to section 16701, which authorized an equitable award of attorney and expert fees “against a party that the court finds acted arbitrarily, vexatiously, or not in good faith.” The trial court denied Defendants’ motion on two grounds: (1) the motion was untimely under applicable rules; and (2) on the merits, the court declined to find that Jones acted arbitrarily, vexatiously, or not in good faith. Defendants appealed, contesting the trial court's sua sponte determination the motion was untimely, and they further challenged the court’s refusal to find Jones acted arbitrarily, vexatiously, or not in good faith. After review, the Court of Appeal concurred with the trial court, rejected Defendants’ claims of error, and affirmed the order. View "Jones v. Goodman" on Justia Law

Plaintiffs Hillarie and Keith Levy appealed the dismissal of their lawsuit filed against defendant, Only Cremations for Pets, Inc. Plaintiffs alleged it agreed to cremate individually two of their dogs, but then intentionally sent them random ashes instead. Plaintiffs sought recovery of emotional distress damages under contract and tort law. The Court of Appeal determined: the complaint failed to state a cause of action under any contract theory; and there were no factual allegations showing the existence of any contract between plaintiffs and defendant. Plaintiffs’ veterinarian, not plaintiffs, contracted with defendant. However, the complaint adequately pled two tort theories: trespass to chattel and negligence. The Court found allegations here "fit comfortably" in a cause of action for trespass to chattel claim, which permitted recovery of emotional distress damages. The allegations also supported a negligence cause of action because defendant advertised its services as providing emotional solace, and thus it was foreseeable that a failure to use reasonable care with the ashes would result in emotional distress. The Court reversed and remanded, giving plaintiffs an opportunity to plead more fully a third-party beneficiary cause of action. View "Levy v. Only Cremations for Pets, Inc." on Justia Law

Quidel Corporation (Quidel) petitioned for a writ of mandate and/or prohibition to direct the trial court to vacate its order granting summary adjudication. Quidel contended the trial court incorrectly concluded a provision in its contract with Beckman Coulter, Inc. (Beckman) was an invalid restraint on trade in violation of Business and Professions Code, section 16600. Quidel argued the trial court improperly extended the holding from Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) beyond the employment context to a provision in the parties’ 2003 BNP Assay Agreement (the Agreement). In its original, published opinion, the Court of Appeal concluded it was not, granted the petition and issued a writ instructing the trial court to vacate the December 2018 order granting summary judgment on the first cause of action. The California Supreme Court then granted review of the Court of Appeal's opinion and ordered briefing deferred pending its decision in Ixchel Pharma, LLC v. Biogen, Inc., S256927. On August 3, 2020, the Supreme Court issued Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal.5th 1130 (2020), which held “a rule of reason applies to determine the validity of a contractual provision by which a business is restrained from engaging in a lawful trade or business with another business.” The Quidel matter was transferred back to the Court of Appeals with directions to vacate its previous opinion and reconsider the case in light of Ixchel. The appellate court issued a new opinion in which it concluded the trial court’s decision was incorrect. The trial court was directed to vacate the December 7, 2018 order granting summary adjudication on the first cause of action. View "Quidel Corporation v. Super. Ct." on Justia Law

In 2003, Richard Howell invented a binding that has a “special, patented heel release designed to mitigate knee injuries . . . that are common in downhill skiing.” Howell formed a business relationship with John Springer-Miller, and the two signed transaction documents, which included an employment agreement, a stock-purchase agreement, an investor-rights agreement, and an amended certificate of incorporation. Howell and Springer-Miller’s working relationship “began to deteriorate almost immediately,” and the KneeBinding board voted to terminate Howell as president in September 2008. In prior proceedings, the Vermont Supreme Court in large part affirmed an August 2016 trial court decision, but reversed a decision to dissolve a March 2009 permanent injunction, and remanded the court’s award of attorney’s fees to KneeBinding, Inc. with directions to consider additional evidence of legal fees. On remand in August 2019, the trial court: (1) awarded additional attorney’s fees to KneeBinding; (2) issued a sanction for a May 23, 2018 finding that Richard Howell violated an August 10, 2017 injunction that was in place while "KneeBinding II" was pending; and (3) found Howell in contempt for violating the March 2009 permanent injunction that the Supreme Court restored in KneeBinding II. On appeal, Howell challenged the May 23, 2018, finding that he violated the August 2017 injunction and the August 2019 finding that he violated the March 2009 permanent injunction. Finding no reversible error, the Supreme Court affirmed. View "Kneebinding, Inc. v. Howell" on Justia Law

The trial court found defendants Peng Xufeng and Jia Siyu filed a frivolous anti-SLAPP motion against Changsha Metro Group Co., Ltd. (Changsha). Changsha sued defendants for: (1) breach of fiduciary duty; (2) constructive fraud; (3) aiding and abetting; (4) unjust enrichment; and (5) a constructive trust. Defendants responded with an anti-SLAPP motion. The trial court ordered defendants to pay Changsha $61,915 for Changsha’s attorney’s fees in opposing the anti-SLAPP motion. Defendants contended the trial court erred in awarding attorney’s fees to Changsha because: (1) defendants were not given a 21-day safe harbor period; and (2)Changsha requested attorney’s fees in its opposition to the anti-SLAPP motion, rather than in a separate motion. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Changsha Metro Group Co. v. Xufeng" on Justia Law

Defendants Garrett Reed, Reilly Reed, Element Services, LLC, Jhenna Reed, Reedesign Concepts, and Robert Kubistek appealed a district court order remanding this case from federal district court to Colorado state court due to lack of subject matter jurisdiction. Plaintiff Elite Oil Field Enterprises, Inc. (Elite) moved to dismiss the appeal for lack of appellate jurisdiction. Plaintiff Elite was a Colorado corporation formed in March 2012 to provide roustabout services for the oil field industry. Immediately after its formation, Elite formed two subsidiaries: Elite Oil Field Services, Inc. and Elite Oil Field Equipment, Inc. At some point after the formation, Reilly Reed (Reilly) became upset that he only had a 25% ownership interest in Elite and believed that he was entitled to a 50% share. Reilly and his brother Garrett Reed (Garrett), allegedly devised a scheme for Reilly to form, surreptitiously, a competing company known as Element Services, LLC (Element), and for Element to improperly lure away Elite’s customers and employees with the intent of economically harming Elite and rendering Elite unable to continue its operations. As part of the scheme, Reilly filed a civil lawsuit in Colorado federal district court against Elite, its two subsidiaries, his former business partner Dustin Tixier, and business manager Jason Whisenand, alleging in pertinent part, Elite's corporate documents were altered such that Reilly owned only 25% of the total outstanding corporate stock rather than the originally agreed upon 50%. Plaintiffs moved to transfer and consolidate the multiple civil suits and counterclaims to Colorado state court. The Tenth Circuit determined it lacked subject matter jurisdiction over the appeal, thereby granting Elite's motion to dismiss this appeal. View "Elite Oil Field Enterprises v. Reed" on Justia Law

Two powerful friends decided to take out significant loans in order to invest in a purported business opportunity overseas. The business opportunity was in reality, a scam. The friends offered as collateral assets which were not theirs to encumber. The third party to whom the assets belonged had no idea the assets were being so encumbered. And the "lender" was another investor in the scam intent on recouping its investment. The opportunity was "a complete bust," and the friends were unable to pay the loans back. The lender sued to collect what was owed and foreclose on its secured interest in the offered collateral. The friends failed to answer the lawsuit, and a default judgment was obtained. The lender then began to execute on its judgment. The issues presented for the Court of Appeal's review centered on two main issues: (1) whether the default judgment was void; and (2) assuming it was valid, whether the trial court should have vacated the default and default judgment under its statutory and equitable powers. The Court determined the order denying the motion to vacate default judgment should have been reversed, and the matter remanded for the trial court to vacate the default, default judgment and an assignment order (entered April 30, 2018). View "Luxury Asset Lending v. Philadelphia Television Network" on Justia Law

Subcontractor Ehmcke Sheet Metal Company (Ehmcke) recorded a mechanic’s lien to recoup payment due for sheet metal fabrication and installation work done on a luxury hotel project in downtown San Diego. Project owner RGC Gaslamp, LLC (RGC) secured a bond to release the lien. Thereafter Ehmcke filed three successive mechanic’s liens, each identical to the first, prompting RGC to sue it for quiet title, slander of title, and declaratory and injunctive relief. The trial court granted Ehmke’s special motion to strike under the anti-SLAPP statute. The trial court found that Ehmcke met its moving burden because the filing of even an invalid lien was protected petitioning activity. Thereafter, the court found that RGC failed to make a prima facie showing that its sole remaining cause of action for slander of title could withstand application of the litigation privilege. RGC appeals both findings, arguing that the duplicative filing of mechanic’s liens after the posting of a bond was not protected activity. The Court of Appeal concluded after review that RGC erroneously imported substantive requirements of the litigation privilege into the first step of the anti-SLAPP inquiry. Ehmcke met that moving burden once its erroneously excluded reply declarations were considered. With the burden shifted on prong two, RGC failed to make a prima facie showing that the litigation privilege did not bar its slander-of-title cause of action. The anti-SLAPP motion was thus properly granted, and Court likewise affirmed the subsequent attorney’s fees and costs award. View "RGC Gaslamp v. Ehmcke Sheet Metal Co." on Justia Law