Developments of Interest

New Cases of Interest - May 27, 2014

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Bock v. Hansen (2014) 225 Cal.App.4th 215.  In this case plaintiffs, a group of homeowners, sued an insurer and an adjuster for the insurer alleging intentional infliction of emotional distress and negligent misrepresentation.  The trial court held that as a matter of law the plaintiffs did not have a cause of action against the adjuster.  The Court of Appeal however reversed, and held that negligent misrepresentation can be asserted against an insurance adjuster and that the plaintiffs had adequately alleged such a claim.  The adjuster misrepresented items to the plaintiffs, and one of the plaintiffs alleged injury as a result of the purported misrepresentation.  The plaintiffs alleged that the adjuster had falsely told them that their insurance policy did not cover the cost of cleanup, the adjuster knew that statement was false when he made it or made it with reckless disregard of its falsity, and the plaintiffs relied on the false statement to their detriment.

Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2014) 225 Cal.App.4th 327.  Emergency physicians claimed that the plans which they had originally entered into had been negligently delegated to another entity which was financially unsound and unable to pay the physicians for the care they provided.  The physicians continued to render emergency services to the independent practice association after it failed to pay them and had to become insolvent.  The Court of Appeal held that the physicians could state a claim against the health care service plan which had delegated their obligation to reimburse the physicians to an unsound independent practice association.  The court found that factors which weighed in favor of finding a cause of action for negligent delegation included policy considerations because the physicians were required by law to perform the services regardless of patients' ability to pay and the duty not to negligently delegate was a continuing duty which would support a cause of action for negligent failure to reassume a previously delegated obligation.

Thoryk v. San Diego Gas and Electric Company (2014) 225 Cal.App.4th 386.  A junior lienholder had obtained a lien upon any recovery that a borrower might obtain from energy companies on a cause of action that included inverse condemnation and negligence.  The borrower defaulted on mortgage loans after wildfires had extensively damaged the borrower's property and the junior lienholder foreclosed on a second deed of trust under a power of sale, which was itself foreclosed by a senior lienholder two years later.  The Court of Appeal held that the junior lienholder could not avoid the anti-deficiency provisions and one form of action provision found in CCP §§580(d) and 7206 and that those provisions barred any recovery by the junior lienholder.

Horiike v. Coldwell Banker Residential Brokerage Company (2014) 225 Cal.App.4th 427.  The court holds that a listing sales person owes a fiduciary duty to the buyer as an associate licensee of the brokerage firm that acted as a dual agent for both buyer and seller.  When a broker is a dual agent, the sales person acting under the broker has the same fiduciary duty to the buyer and the seller as does the broker.  The buyer had claimed that the salesperson did not explain to the buyer contradictory square footage measurements which existed, nor communicate all material information he knew about the square footage of the property.

Roger Cleveland Golf Company, Inc. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660.  This is a SLAPP case.  The manufacturer had brought a malicious prosecution complaint against a former distributor's attorneys which followed the attorneys having filed contract and declaratory relief claims on behalf of the former distributor of the manufacturer's products after the manufacturer had declined to renew the distribution agreement.  The original suit was dismissed and the distributor had filed a notice of appeal.  The manufacturer filed the malicious prosecution complaint after the appeal was dismissed.  The Court of Appeal found that while the action was timely in that it was filed within the applicable two year limitations period, there was a lack of probable cause shown of prevailing on the merits because the manufacturer did not present sufficient evidence to establish the malice element of malicious prosecution and therefore could not demonstrate a probability on prevailing.

Talega Maintenance Corp. v. Standard Pacific Corp. (2014) 225 Cal.App.4th 722.  This is also a SLAPP case.  In this case causes of action were brought for fraud, constructive fraud, negligence and breach of fiduciary duty by a homeowners association against two developers and three of the developer's former employees in a construction defect action.  The employees had been appointed by the developers as members of the association's board of directors.  The employees allegedly misrepresented during board meetings that the association was responsible for repairing certain trails which had been damaged by rains and flooding and the board had voted to spend the association's funds on the repairs.  The Court of Appeal in upholding the Trial Court's denial of the SLAPP motion found that the claims for breach of fiduciary duty, constructive fraud and negligence were not based on statements because the acts of withholding information and improperly directing the expenditure of funds were not statements within the meaning of the SLAPP statute.  As to the fraud cause of action, the court concluded that protected activity was not shown because the association's board meetings were not "official proceedings" and no governmental agency had been considering the issue of liability for repairs, and the issue was not one of public interest.

Butts v. Board of Trustees of California State University (2014) 225 Cal.App.4th 825.  A State University employee was found to have retreat rights to a prior non-management position when she was terminated from her management position.  The court held that CCR Title 5 Section 42723 gave the employee retreat rights because she had held permanent status prior to January 1, 1984.  The regulation did not limit retreat rights to employees in a management position prior to that date and the employee had also sufficiently exhausted all employee administrative remedies by seeking reconsideration of the termination decision. 

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