Developments of Interest

New Cases of Interest - December 26, 2018

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Bear Creek Master Association v. Southern California Investors, Inc. (2018) 28 Cal.App.5th 809.  In this matter a homeowners association sought to determine the priority of the association’s assessment lien vis-à-vis a third deed of trust.  The third deed of trust was recorded before the assessment lien.  The declaration of CC&Rs was however on record well before the third deed of trust.  The court determined that the association’s assessment lien had priority pursuant to the priority and subordination provisions that were contained in the CC&Rs concerning the property.  The court reasoned that the CC&Rs created a covenant running with the land in favor of the association and that the third deed of trust holder had constructive notice of the CC&Rs.

AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal.App.5th 923.  Plaintiff was a business that provided traveling nurses and sued the defendants, a competitor, who had worked for the plaintiff before going to work for the defendant competitor, under a confidentiality and nondisclosure agreement that prohibited the recruiter from soliciting any employee of the plaintiff to leave the plaintiff’s service for at least a one year period.

The Court of Appeal found that the broadly worded nonsolicitation provision in fact resulted in a violation of Business and Professions Code Section 16600 and was therefore void because it restrained the recruiters from practicing within their chosen profession.  The court also found that a misappropriation of trade secrets cause of action failed because the evidence showed the identity and contact information of the traveling nurses were already known to the competitor before any of the recruiters left plaintiff and went to work for that competitor.  Similarly, a customer list was found not to be a protected trade secret, even if nurses were customers, because the evidence showed that the identity and contact information of the nurses was already known to the competitor.

Ramos v. Superior Court (2018) 28 Cal.App.5th 1042.  In this case a partner in a law firm brought an action for discrimination, retaliation, and various other claims against the law firm and the law firm sought to compel arbitration pursuant to the law firm’s partnership agreement  The court held that the arbitration provision in the partnership agreement was unconscionable because it required the terminated partner to pay her own attorneys’ fees and bear half of the cost of the arbitration, and limited the arbitrator’s authority to provide relief which was otherwise authorized by statute.  In addition, there was a confidentiality provision which was substantively unconscionable because of its impact on discovery. 

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