Developments of Interest

New Cases of Interest - January 10, 2011

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Mepco Services, Inc. v. Saddleback Valley Unified School District (2010) 189 Cal.App.4th 1027.  This was a construction contract dispute between a school district and a contractor and its surety.  There was no attorneys’ fees provision in the construction contract, but the performance bond included an attorneys’ fees provision that made the contractor and its surety responsible for attorneys’ fees incurred by the school district if incurred to enforce the bond.  The school district was found to have breached the construction contract, and attorneys’ fees, as well as other monetary amounts were awarded to the contractor.  The school district contended that attorneys’ fees were not available, but the Court of Appeal found that the reciprocity provisions of Civil Code Section 1717 applied and that attorneys’ fees were properly part of the award.  Because the school district would have been entitled to recover attorneys’ fees in its claim on the performance bond and the school district had specifically sought attorneys’ fees pursuant to that bond in a cross-complaint filed by the school district, the contractor was entitled to attorneys’ fees when it received judgment.

Slates v. Gorabi (2010) 189 Cal.App.4th 1210.  After a party discharged its attorney, and retained a second attorney, the first attorney and the client entered into a stipulated judgment with a stay of execution for the amount of attorney’s fees incurred.  A judgment was subsequently obtained in favor of the client against a third party who had limited assets, and the issue became who was entitled to priority with respect to those assets.  The original attorney prevailed in the action to establish priority, and then sought attorneys’ fees in that action on the basis of having incurred them to enforce the judgment.  The court denied the recovery of attorneys’ fees, finding that under CCP Section 685.040, which permits the judgment creditor to recover attorneys’ fees incurred in enforcing a judgment, a dispute over the priority of judgments is not the same thing as enforcing a judgment, and does not carry with it the right to recover attorneys’ fees.

Wong v. Jing (2010) 189 Cal.App.4th 1354.  This is a SLAPP case.  A dentist made a claim of libel and infliction of emotional distress arising from negative comments made on a website regarding the dentist’s treatments of a particular patient.  The court found that the review constituted protected conduct under CCP 425.16(e) because the manner of treatment was an issue of public interest and the site was a public forum.  The dentist failed to show a probability of success as to one party who had posted the review, but as to a second party, the court found that the SLAPP motion should not be granted because the comments suggested by implication that the dentist had failed to warn or advise with respect to a particular course of treatment which allowed the libel claim to survive the motion.  The court also found that evidence of lost sleep, stomach upset and anxiety, did not support the emotional distress claim made by the dentist.

Laswell v. AG Seal Beach, LLC (2010) 189 Cal.App.4th 1399.  In this case a petition to compel arbitration was granted, except for a single non-arbitable statutory cause of action.  In reaching this conclusion, the Court of Appeal gave special emphasis to the public policy favoring arbitration as a method of dispute resolution found in CCP Section 1281 and 1281.2 and that there were not “third parties” within the meaning of CCP Section 1281.2(c) when the third parties were all related entities to the facility entity which had entered into the arbitration provision.  The presence of a single cause of action based on Health and Safety Code Section 1430(b) did not give the Trial Court discretion to deny arbitration as to all other claims.

Abaya v. Spanish Ranch I, L.P. (2010) 189 Cal.App.4th 1490.  This is also an action to compel arbitration relating to current and former owners of a mobile home park in an action brought against the owners for failure to maintain the park’s common facilities.  The leases of many, but not all, of the residents had contained a provision providing for alternative dispute resolution.  The court upheld a denial of the petition to compel arbitration, noting that there was a possibility of conflicting rulings in that some of the residents were not subject to the arbitration provision and the issues at stake involved common questions of law and fact.

Smith v. Adventist Health Systems/West (2010) 190 Cal.App.4th 40.  A doctor sued a hospital and its affiliates for summarily suspending the doctor’s privileges and failing to process a reapplication for privileges.  The defendants brought a SLAPP motion.  The SLAPP motion was denied, with the court finding that the doctor had a reasonable probability of succeeding on his claims, and in doing so rejected the Defendant’s contention that there was an absolute privilege set forth in Civil Code Section 47(b) which prohibited any liability.  The court also found that the wrongful act, a suspension of privileges, was not a communicative act within the meaning of the SLAPP statute. 

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