Developments of Interest

New Cases of Interest - April 18, 2011

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Coretronic Corp. v. O’Connor (2011) 192 Cal.App.4th 1381.  This is a SLAPP case filed with respect to a complaint that was brought by certain insureds who asserted claims arising from a law firm’s dual representation of their insurer and another client.  The insurer retained the law firm to determine whether claims made to it by the insureds were covered under the provisions of the insurance policy and as part of that review the insureds provided the law firm with confidential information to aid in the coverage evaluation.  At the same time, the same law firm undertook to represent in an unrelated matter the company which had sued the insureds and for which a coverage opinion had been sought.

Both the trial court and the Court of Appeal found that the lawsuit brought by the insureds against the law firm was not subject to a SLAPP motion.  The complaint did not arise out of litigation-related activity and any protected activity was merely incidental to the insured’s claims.  It wasn’t the firm’s advocacy which was the target of the complaint, but its dual representation of clients with conflicting interests and the nature of the conflicting representations could not be resolved in a SLAPP motion.

State Farm Mutual Automobile Insurance Company v. Lee (2011) 193 Cal.App.4th 34.  This is another SLAPP case which began with the filing of an unfair business practices action by an insurer, and a cross-complaint against both the insurer and the insurer’s law firm alleging abuse of process and unfair business practices.  The cross-complaint contended that questions asked by the insurer’s attorney during depositions in a prior action were for the ulterior motive of collecting evidence for an entirely different lawsuit.  The anti-SLAPP motion was brought with respect to the cross-complaint and was granted by the trail court and upheld by the Court of Appeal.  The discovery which was the basis of the cross-complaint was within the scope of the SLAPP statute and the questioning in the related action was within the broad scope of discovery allowed for that action.  As a result, the cross-complainant could not demonstrate a probability of prevailing on the merits of its abuse of process and unfair business practices causes of action.

Tamkin v. CBS Broadcasting, Inc. (2011) 193 Cal.App.4th 133.  This is another SLAPP action in which plaintiffs, a married couple, sued a broadcaster and a television writer for defamation and false light invasion of privacy.  The complaint arose from the writing and dissemination of a screen play for an episode of a television show.  Defendants filed the SLAPP motion which was denied by the trial court, but reversed by the Court of Appeal and remanded.  The court held that the defendants’ conduct did arise from protected activity because it was in furtherance of their right of free speech in connection with an issue of public interest.  Plaintiffs did not meet their burden of then showing a probability that they would prevail on their defamation causes of action because they could not show that a reasonable person would have understood that the alleged defamatory statements made referred to them and no reasonable person would have understood the fictional characters in the screen play as being the plaintiffs (until perhaps reading the opinion).

Augusta v. Keehn & Associates (2011) 193 Cal.App.4th 331.  This was an action involving a petition to compel arbitration of a legal malpractice action with the court finding that there was substantial evidence that the client had waived his right to arbitrate by taking steps inconsistent with an intent to invoke arbitration, primarily obtaining discovery from defendants through the court process.  The court also made a finding of unreasonable delay noting that the client was aware of the arbitration clause in his professional services contract with the attorney at the time plaintiff filed the original complaint, but delayed petitioning to compel arbitration for six and a half months thereafter.  The arbitration clause prohibited formal discovery, yet in the civil action the client had proposed interrogatories, requests for admission and document production demands.

Candari v. Los Angeles Unified School District (2011) 193 Cal.App.4th 402.  This is a case in which a school district employee was ordered reinstated but was found not to be entitled to back pay because of a failure to mitigate damages.  The trial court reversed the order of a hearing officer on the back pay and mitigation issue, and the trial court’s finding was upheld by the Court of Appeal.  Both the trial court and the Court of Appeal found that the school district did not meet its burden of proof on the failure to mitigate damages, and that burden is not met by showing only that the employee did not seek other job opportunities within the area of skill which the employee had, and that the burden on the defendant district was to show that there were comparable opportunities available.

Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435.  This is another SLAPP case, and in this case the motion was filed by a law firm and a partner in that firm.  In the primary case there were two claimants, one of whom alleged that the law firm had filed harassing lawsuits against her and had hired a private investigator to commit unlawful acts of wire tapping and eavesdropping.  The other claimant, who was the neighbor of the first, alleged that she had also been a victim of the private investigator’s acts.  The law firm argued that all of the causes of action arose out of the firm’s representation of another client and were protected by the SLAPP statute.

The Court of Appeal affirmed the denial of the SLAPP motions, except as to causes of action which alleged wrongful acts in the underlying litigation.  The court also limited an award of attorneys’ fees to the neighbor, because she had no connection with the law firm’s representation of its client and the acts therefore alleged by the neighbor did not arise from any protected activity.  These fees were proper because the court deemed the motion by the law firm to be frivolous as to the neighbor but not as to the other plaintiff.

Rosen v. St. Joseph Hospital of Orange County (2011) 193 Cal.App.4th 453.  Plaintiff filed a cause of action which was called conversion and another several causes of action titled as violation of fiduciary duty, violation of privacy and intentional infliction of emotional distress, all of which centered on the contention that the defendants, a doctor, the doctor’s clinic, and a hospital, failed to properly preserve the plaintiff’s medical records.  The court held that each cause of action was based on a spoilation of evidence claim, and that such claims were not allowed under California law, and therefore there was no duty on which to base the causes of action, and plaintiff’s complaint was dismissed.

California School Employees Association v. Governing Board of East Side Union High School District (2011) 193 Cal.App.4th 540.  This is a writ of mandate case in which a classified employee sought reinstatement in a nonmerit system school district.  The employee had attained permanent status as a classified employee and then was subsequently laid off and later reemployed by the school district in a different, lower position.  She contended that in that lower position she also was entitled to permanent status and could not be required to serve a new probationary period.  The court upheld the denial of the petition for writ of mandate, finding that permanent status in a nonmerit system school district is attained in a position or class, not for the employee in any position or class which that employee might subsequently occupy.  Consequently as a result of the layoff and then subsequent reemployment, plaintiff’s status was that of only a probationary employee in the new position, not a permanent employee.

South Sutter, LLC v. LJ Sutter Partners, LP (2011) 193 Cal.App.4th 634.  This case again is brought under the SLAPP statute.  Plaintiff was the owner of an option to acquire land from a land owner and brought an action for breach of contract and for declaratory relief.  Plaintiff in his action joined the holder of another option to acquire the land, and that option holder brought the SLAPP motion.  The issue initially was whether the SLAPP motion was timely filed because it was filed after a change of venue but the court found that the 60 day period began anew upon the date the receiving court in a change of venue matter receives notice of the receipt of the case.  The court found that the plaintiff’s cause of action arose from the other option holder’s exercise of constitutional rights and the evidence also demonstrated it was unlikely that plaintiff would succeed on the merits of its complaint against the other option holder. 


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