Developments of Interest

New Cases of Interest - September 26, 2012

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Harris v. Superior Court (2012) 207 Cal.App.4th 1225.  Insurance adjusters sued their employers contending that they were not exempt from overtime payment requirements within the meaning of the administrative exemption.  They also sought certification as a class.  The court of appeal determined that the class certification should have been granted, and that the adjusters' work duties did not satisfy the requirements for the administrative exemption from overtime requirements because their duties were not carried out at the level of policy determination.  A few examples of potential administrative work were dwarfed by the day to day tasks on which the adjusters were engaged, and there was insufficient evidence of any management or general business operation responsibility so as to qualify for the administrative exemption.

Wohlgemuth v. Caterpillar, Inc. (2012) 207 Cal.App.4th 1252.  This was an action under the Song-Beverly Consumer Warranty Act for a defective engine in a motor home.  The manufacturer failed to repair the defects after a reasonable number of attempts and the consumers accepted a settlement payment from the manufacturer but thereafter sought an award of attorney's fees and costs.  The court found that attorney's fees and costs were recoverable as a result of the settlement and that an entry of formal judgment was not required.  Therefore, when there is a voluntary dismissal with prejudice as part of a compromise agreement, attorney's fees and costs can be awarded to the prevailing party, pursuant to the Song-Beverly Consumer Warranty Act.

Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal.App.4th 1511.  This was an employer's petition to compel arbitration of wrongful termination claims based upon an arbitration provision contained in an employee handbook.  The employee had acknowledged receipt and review of the handbook and agreed to abide by its provisions.  The court, however, denied the employer's petition to compel arbitration finding that the handbook stated it did not create a contract of employment, and the arbitration clause was not prominently distinguished from other informational material in the handbook.  The employee's acknowledgment of the handbook did not constitute an agreement to be bound by the arbitration clause.  The court also found the arbitration provision to be illusory because the handbook provided the employer could modify its contents at any time.

Weinstein v. Rocha (2012) 208 Cal.App.4th 92.  Purchasers and sellers of real estate had entered into a settlement agreement which provided for payment of $200,000 to the sellers in the event purchasers defaulted on a promissory note.  The court, however, found that the settlement agreement was inextricably tied to the purchase money promissory note, and was really a modification of the note.  There was no separate consideration for the obligation of the purchasers to pay the sellers $200,000, and the court determined that CCP §580(b) applied to the transaction as a seller financed transaction and limited the seller to the security provided in connection with sellers' promissory note.  That security had been exhausted in the foreclosure of a senior lien, and the court held that the sellers had no further remedy against the purchasers.

Arabia v. BAC Home Loans Servicing, LP (2012) 208 Cal.App.4th 462.  In this case a loan servicer initiated a judicial foreclosure proceeding and the court of appeal found that a servicer could initiate such a proceeding in its own name with the right to foreclose being an assignable cause of action.  Further, the loan servicer's failure to notify and name the junior lienholder in the judicial foreclosure proceeding did not invalidate those proceedings as to the borrower.

Silk v. Feldman (2012) 208 Cal.App.4th 547.  This is a SLAPP case.  Plaintiff, who was a former director of a homeowners association sued the defendant, a current director of the association, for defamation and libel per se, with the defendant filing the SLAPP motion.  Both the trial court and the court of appeal denied the SLAPP motion.  The court of appeal concluded that the plaintiff had carried her burden of showing that she would probably prevail in the action and that the allegation was not a privileged communication under Civil Code §47(b).

Fahlen v. Sutter Central Valley Hospitals (2012) 208 Cal.App.4th 557.  This is another SLAPP action, and in this case involves a doctor who sued a hospital who claimed that he'd lost his hospital privileges as a form of whistleblower retaliation.  The hospital brought the SLAPP motion.  The court of appeal denied the motion with respect to causes of action for retaliation under Health and Safety Code §1278.5 and intentional interference with contractual relations as well as declaratory relief.  Under the Health and Safety Code §1278.5 claim, the court noted there was no requirement that the plaintiff seek a judicial review of the administrative action taken in peer review proceedings as a precondition to a civil action and that the doctor's failure to pursue writ relief did not therefore bar a claim.  However, the court did find that neither judicial economy nor fundamental fairness required an exception to the requirement of exhaustion of remedies as to claims for interference with the right to practice an occupation or wrongful termination of hospital privileges, and those claims were therefore barred.

Touchstone Television Productions v. Superior Court (2012) 208 Cal.App.4th 676.  In this case an actress did not have her contract renewed for a new season of a television show and contended that she had been wrongfully terminated because she had complained about a battery which was allegedly committed by the show's creator.  The court of appeal held that the production company was entitled to a directed verdict because no cause of action could be stated for wrongful termination in violation of public policy in that the actress was not fired, discharged or terminated, but the production company chose not to exercise its option to renew her contract, which was qualitatively different.  The court, however, allowed the plaintiff to file an amended complaint alleging a cause of action under Labor Code §6310 for retaliation.

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