Justia Civil Procedure Opinion Summaries

McMillin Management Services, L.P. and Imperial Valley Residential Valley Residential Builders, L.P. (collectively "McMillin") filed suit against numerous insurance companies, including respondents Lexington Insurance Company (Lexington) and Financial Pacific Insurance Company (Financial Pacific). McMillin alleged that it had acted as a developer and general contractor of a residential development project in Brawley and hired various subcontractors to help construct the Project. As relevant here, McMillin alleged that Lexington and Financial Pacific breached their respective duties to defend McMillin in a construction defect action (underlying action) brought by homeowners within the Project. McMillin alleged that Lexington and Financial Pacific each owed a duty to defend McMillin in the underlying action pursuant to various comprehensive general liability (CGL) insurance policies issued to the subcontractors that named McMillin as an additional insured. The trial court granted Lexington's motion for summary judgment, reasoning, that there was no possibility for coverage for McMillin as an additional insured under the policies "[b]ecause there were no homeowners in existence until after the subcontractors' work was complete[ ] . . . ." On appeal, McMillin contended that the fact that the homeowners did not own homes in the Project at the time the subcontractors completed their work did not establish that its liability did not arise out of the subcontractors' ongoing operations. The trial court granted Financial Pacific's motion for summary judgment, finding McMillin did not establish homeowners in the underlying action had sought potentially covered damages arising out of the subcontractors' drywall installation. The Court of Appeal reversed as to Lexington, and affirmed as to Financial Pacific. View "McMillin Management Services v. Financial Pacific Ins. Co." on Justia Law

The underlying suit involved a loan foreclosure. The borrowers filed a cross-complaint against MCC, alleging fraud, despite being advised MCC had no involvement in the transaction involved in the lawsuit. The borrowers mistakenly identified MCC as an agent of the lender and a loan servicer and continued the lawsuit despite being warned that it should be dismissed. After the borrowers settled the main lawsuit against them, they filed a voluntary dismissal in favor of MCC. MCC then sued the borrowers for malicious prosecution. The borrowers filed an anti-SLAPP motion (Code of Civil Procedure 425.16(b)(1)) to dismiss. The court of appeal affirmed the denial of the motion, concluding that MCC met its burden under step two of the anti-SLAPP analysis, demonstrating a probability of success on its claim for malicious prosecution. There was no evidence of any research done before filing the cross-complaint seeking $300 million in damages; the borrowers were notified no fewer than four different times that MCC was the wrong entity to sue. View "Medley Capital Corp. v. Security National Guaranty, Inc." on Justia Law

Yelp Inc., operator of a website for consumer reviews, petitioned for a writ of mandate to overturn an order compelling its production of documents that may reveal the identity of an anonymous reviewer on its site. Yelp also appealed from a separate order imposing $4,962.59 in monetary sanctions against it for failing to comply with the subpoena requiring production of the documents. Gregory Montagna filed a lawsuit against Sandra Jo Nunis and several Doe defendants alleging a single cause of action for trade libel. Montagna, an accountant, prepared a tax return for Nunis in 2015, initially quoting Nunis a “minimum” fee of $200 for the preparation of her return, based on her representation that her income was comprised exclusively of wages reported on a W-2 form, and she would require only a simple return. However, both Nunis’ income and the resulting tax return were allegedly more complicated than she had represented. As a consequence, Montagna charged Nunis $400 for preparation of the return, rather than the $200 fee he initially quoted. Nunis allegedly paid Montagna only $200, and refused to pay him more even after receiving “a collection letter” for the balance. And in November 2015, Nunis allegedly went online to the Yelp website under an alias and posted a negative review of Montagna. Yelp argued the trial court's orders had to be reversed because: (1) the trial court erroneously concluded Yelp lacked standing to assert the First Amendment rights of its anonymous reviewer as grounds for resisting the subpoena; and (2) the court further erred by concluding Montagna made a prima facie showing the posted review contained defamatory statements. The Court of Appeal agreed the trial court erred in ruling Yelp lacked standing to assert the First Amendment rights of its anonymous reviewer, but found no error in its determination Montagna made a prima facie showing the challenged review was defamatory. The Court concluded the latter finding was sufficient to support the trial court’s order compelling Yelp to produce the subpoenaed documents in the circumstances of this case. Consequently, the Court denied the petition for writ of mandate. "However, given the dynamic nature of this area of law - the primary cases we rely upon were decided after the trial court issued its ruling - we also conclude Yelp’s opposition to Montagna’s motion to compel was substantially justified." Thus the Court reversed the order imposing sanctions against Yelp. View "Yelp Inc. v. Superior Court" on Justia Law

At issue in this case was a municipal ordinance, which authorized the issuance of bonds to be used to refinance the defendants' obligations with respect to the ​construction of a baseball park. Judgment was entered in favor of defendants on grounds that plaintiffs lacked standing to challenge the refinancing. After review, the Court of Appeal found the plaintiff taxpayers had standing under Government Code section 1092 to challenge the ordinance on the grounds participants in the proposed transaction violated the conflict of interest provisions of section 1090. Accordingly, the Court reversed the trial court's judgment dismissing plaintiff's complaint. View "San Diegans for Open Gov. v. Public Facilities Financing etc." on Justia Law

This case presented the issue whether a superior court could impose a hefty daily monetary sanction on a party who steadfastly refuses to comply with a discovery order. The court ordered Watchtower Bible and Tract Society of New York, Inc. (Watchtower) to produce documents responsive to a specific request for production. Per the court's order, the documents would be redacted to protect certain third parties' privacy interests and produced subject to a strict confidentiality and nondisclosure order negotiated by Watchtower. In addition, the court ordered Watchtower to look for documents in files it represented, on multiple occasions, to be in its possession, custody, and/or control. Watchtower informed the court that it would not comply with the order. As such, plaintiff Osbaldo Padron moved for monetary sanctions against Watchtower for its discovery abuses. The court awarded sanctions in the amount of $4,000 per day for noncompliance with the order, and Watchtower appealed that order. Finding that Watchtower took two inconsistent positions as grounds for its argument to reverse the sanction order, the Court of Appeal held Watchtower was judicially estopped from arguing the superior court lacked authority to issue the sanctions. Finding no other reason to reverse, the Court of Appeal affirmed the sanctions. View "Padron v. Watchtower Bible & Tract Society of New York" on Justia Law

Francisco Diaz was employed as a tree trimmer by Professional Community Management, Inc. (“PCM”) for many years. He filed his complaint against it in October 2014, stating various causes of action arising out of PCM’s alleged failure to reasonably accommodate the workplace restrictions imposed by his doctor, its alleged retaliation, and its alleged wrongful termination of his employment. PCM answered the complaint in December 2014, denying the allegations and pleading 24 affirmative defenses. The 24th affirmative defense alleged that Diaz’s complaint “and each cause of action, is barred by [his] failure to exhaust contractual remedies available to him, including, but not limited to, the grievance and arbitration procedure under the collective bargaining agreement between [PCM] and [Diaz’s] collective bargaining representative.” PCM unilaterally orchestrated the issuance of an appealable order by: (1) applying ex parte, a mere 11 days before trial, for an order shortening time to hear its motion to compel arbitration; (2) voluntarily submitting a proposed order to the trial court that not only reflected the court’s denial of the ex parte application (the only ruling reflected in the trial court’s own minute order) but also included a denial of the motion on the merits; and (3) promptly appealing that order, which then stayed the scheduled trial. The Court of Appeal concluded PCM carefully tailored the order it proposed the trial court issue, incorporating what it characterized as the trial court’s reasons for rejecting the summary judgment motion, and excluding any mention of issues that might distract from that analysis. PCM continued its aggressive strategy on appeal, contending Diaz was precluded from arguing that PCM had waived its right to compel arbitration. According to PCM, Diaz could not make that argument because the trial court’s premature denial of the motion to compel (at PCM’s request) meant Diaz never argued waiver in an opposition to the motion; and because the order PCM drafted did not reflect the trial court had relied on it as a basis for denying the motion. Instead, PCM claimed Diaz was relegated to defending the court’s ruling based solely on the analysis PCM crafted in its proposed order, and that the Court of Appeal assess the propriety of that order based solely on that analysis. The Court of Appeal concluded that PCM invited the trial court’s alleged error when it proposed the court issue the very ruling it now challenged on appeal. “By doing that, PCM won the battle - it got the court to issue the appealable order it sought, prior to trial - but it lost the war.” A party that invites the trial court to commit error is estopped from challenging that error on appeal. The Court concluded PCM and its counsel acted in bad faith, generating an appealable order they knew the trial court had not intended to issue at the ex parte hearing, for the purpose of obtaining a delay of trial. It imposed monetary sanctions against PCM and its counsel for bringing a frivolous appeal. View "Diaz v. Professional Community Management, Inc." on Justia Law

Oregon State University (Oregon State) petitioned for a peremptory writ of mandate to direct the superior court to vacate an order overruling Oregon State's demurrer to George Sutherland's first amended complaint and to enter a new order sustaining the demurrer without leave to amend. Sutherland's complaint asserted causes of action for negligence and negligent misrepresentation against Oregon State. Sutherland was severely injured when a crane he was operating tipped over. At the time, he was using the crane to load a stack container owned by Oregon State onto a vessel owned by his employer, the Scripps Institution of Oceanography, a department of the University of California, San Diego. The stack container's weight was not displayed on its exterior and was not accurately recorded on the bill of lading provided by Oregon State. Oregon State contended the challenged order violated the federal Constitution's full faith and credit clause because the complaint did not and could not allege Sutherland's compliance with the Oregon Tort Claims Act's 180-day claims notice provision. Sutherland maintained the Clause did not require his compliance with the provision because requiring compliance would violate California's public policy by effectively depriving him of a remedy against Oregon State. Alternatively, Sutherland argued if the Clause does require compliance with the provision, he could amend the complaint to plead facts showing compliance. The California Court of Appeal agreed the superior court should have sustained Oregon State's demurrer because the Oregon Tort Claims Act's claims notice provision was entitled to full faith and credit in California. The provision does not conflict with or violate California's public policy and declining to give the provision full faith and credit would evince an impermissible policy of discriminatory hostility to the provision. Sutherland demonstrated he could plead facts showing compliance with the provision, so the Court granted the petition in part and directed the superior court to vacate its order overruling Oregon State's demurrer and enter a new order sustaining the demurrer with leave to amend. View "Oregon State University v. Superior Court" on Justia Law

William and Daniel, the children of Victor (Decedent), are the beneficiaries of Decedent's estate. In 2010, the probate court appointed William as the personal representative of the Estate. In 2014, Daniel filed a petition alleging that William had not filed any reports on the status of the administration of the Estate, that multiple notices of default had been recorded against real property owned by the Estate, that William had not rented out the property or otherwise made it productive, and Daniel did not know the status of the Estate's remaining assets. After a trial, in April 2015, the court orally announced its decision to remove William as personal representative and to appoint Ocaña in his place. Its final decision issued in April 2016. The court of appeal affirmed, rejecting an argument that the order was not appealable. The trial court expressly reserved jurisdiction to issue a further statement of its reasons; the 2015 order was therefore not final. The Probate Code provides for an appeal from an order removing a fiduciary, so the appeal should not be dismissed on the ground that the order appears in a statement of decision rather than a separate order or judgment. The court upheld the factual findings regarding William’s neglect of the estate. View "Estate of Reed" on Justia Law

CEH filed a complaint in Alameda County alleging violation of the California Safe Drinking Water and Toxic Enforcement Act, Health and Safety Code section 25249.5 (Proposition 65) by failing to warn individuals who live or work in the Kern County town of Shafter that a soil fumigant manufactured by Dow contains a chemical known to cause cancer. Dow moved to transfer the case to Kern County, where the cause of action arose, citing Code of Civil Procedure section 393(a). The trial court denied held that venue is proper in any county under section 395(a) because Dow is a nonresident defendant with no principal place of business in California. The court of appeal disagreed, concluding that section 393(a) establishes that proper venue is in Kern County, where the cause of action arose.The “main relief rule” does not apply because the complaint allegations do not implicate real property rights; it is not necessary to determine whether the relief sought is primarily local and governed by section 392. A Proposition 65 private enforcement action does not fit within the class of cases characterized as transitory because the plaintiff is not seeking recompense for personal harm. An action for equitable relief under such a statute falls within the express language of section 393(a) when, as here, the plaintiff seeks a statutory penalty. View "Dow Agrosciences LLC v. Superior Court" on Justia Law

Between 2000 and 2001, plaintiff-appellant Troy Flowers's application for a securities sales license was rejected by Ohio state officials because they found that he was "not of 'good business repute.'" In addition, Flowers was subjected to discipline by securities regulators with respect to his violation of securities laws and regulations and his failure to cooperate in a securities investigation. Flowers filed a complaint against the Financial Industry Regulatory Authority, Inc. (FINRA), seeking an order that FINRA expunge his disciplinary history from its records. The trial court sustained without leave to amend FINRA's demurrer to Flowers's complaint. Because federal securities laws and regulations provided Flowers with a process by which he may challenge FINRA's publication of his disciplinary history, and Flowers has not pursued that process, the Court of Appeal concluded he may not now, by way of a civil action, seek that relief from the trial court. Accordingly, the Court affirmed the trial court's order sustaining the demurrer and its judgment in favor of FINRA. View "Flowers v. Financial Industry Regulatory Authority, Inc." on Justia Law