Justia Business Law Opinion Summaries

Plaintiffs filed a class action against Banana Republic, a clothing retailer, alleging that signs in its store windows advertising a 40 percent off sale were false or misleading because they did not disclose that the discount applied only to certain items. Plaintiffs cited the Unfair Competition Law (Bus. & Prof. Code, 17200), the False Advertising Law (Bus. & Prof. Code, 17500), and the Consumers Legal Remedies Act (Civ. Code, 1750) and produced evidence that, in reliance on the advertising, they were lured to shop at certain stores and selected items for purchase. As the items were being rung up, plaintiffs were told for the first time that the discount did not apply to their chosen merchandise. Having waited in line and out of embarrassment, they bought some (but not all) of the items, without the discount. The trial court granted Banana Republic summary judgment, concluding that plaintiffs failed to raise a triable issue that they suffered injury in fact. The court of appeal reversed. Plaintiffs raised a triable issue whether they lost “money or property sufficient to qualify as injury in fact, i.e., economic injury,” and whether “that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising.” View "Veera v. Banana Republic, LLC" on Justia Law

Thompson founded a consulting firm (WREG) to advise clients in a niche internet infrastructure industry called “colocation.” WREG sometimes, but not always, performed services that required a real estate broker’s license. Because Thompson did not have a broker’s license when he founded WREG, he decided to collaborate with Asimos. Thompson and Asimos adapted a standard form independent contractor agreement typically used by real estate brokers and agents, which turned out to be a poor fit. Disputes arose concerning alleged underpayment of commissions and alleged failure to comply with regulatory requirements governing real estate brokerage. They sued each other on various breach of contract and business tort theories. Thompson obtained a substantial damages award, plus an award of attorney fees. The court of appeal affirmed court’s rejection of all of Asimos’s claims against Thompson and its determination of liability against Asimos for breach of contract, unfair competition, and trademark infringement, but vacated the damages award and remanded for recalculation against Asimos on Thompson’s claims for unfair competition and trademark infringement. View "Thompson v. Asimos" on Justia Law

In early 2008, plaintiff-appellant Taghi Alereza agreed to help his nephew Habib (Bobby) purchase a business consisting of a gas station and convenience store in Sacramento. They planned to have Bobby run the business. Alereza’s role involved nothing more than providing the initial purchase funds and a $100,000 note secured by his residence. The sole issue in this appeal centered on whether escrow company Chicago Title Company (Chicago Title) owed a legal duty of care to Alereza, who was not a party to the escrow nor mentioned as a third party beneficiary in the escrow instructions. Chicago Title admitted its employee negligently listed the wrong name of the insured (the purchaser of the gas station business) when securing a new certificate of insurance for the business. “This was the first of a series of missteps by several persons that eventually led to Alereza giving a personal guarantee to save the gas station business.” Claiming damages for losses incurred after giving his personal guarantee, Alereza sued Chicago Title. The trial court granted Chicago Title’s motion for nonsuit, and Alereza appealed. The Court of Appeal concluded Chicago Title did not owe a duty of care to Alereza because he was not a party to the escrow, not mentioned in the escrow instructions as a third party beneficiary, and did not sustain his losses as a direct result of the escrow company’s negligence. View "Alereza v. Chicago Title Co." on Justia Law

Plaintiffs 569 East County Boulevard, LLC, and others filed an action against numerous entities and individuals. Plaintiffs' complaint named Backcountry Against the Dump, Inc. (BAD) as a defendant and alleged a single cause of action against BAD for unlawful interference with prospective economic advantage. BAD moved to strike the action pursuant to the anti-SLAPP (strategic lawsuit against public participation) statute. After BAD's anti-SLAPP motion was granted, it sought attorney fees and costs in a total amount of $152,529.15 pursuant to section 425.16, subdivision (c)(1). Plaintiffs did not contest defendant's entitlement to a fees and costs award, but argued the amount sought was exorbitant. The court found BAD was entitled to attorney fees and costs incurred for the successful anti-SLAPP motion, but awarded a reduced amount of $30,752.86. BAD appealed that order, arguing the reduced award was an abuse of discretion. Upon reconsideration after ordering a rehearing in this matter, the Court of Appeal affirmed the judgment. View "569 East County etc. v. Backcountry Against the Dump, Inc." on Justia Law

Katana, a closely held corporation, is a software development company. Mark and Karen Goles appeal from an order specifying $139,666.67 as the buyout value of their 36.7% minority shareholder interest in Katana pursuant to Corporations Code section 2000, subd. (c). The court construed the order as an alternative decree which is appealable pursuant to section 2000, subdivision (c). The Goles contend that the buyout order must be reversed because the trial court's determination of the fair value of the Goles's shareholder interest was erroneous as a matter of law. The court reversed the judgment and ordered the trial court, on remand, to obtain a majority fair value appraisal that takes into account the derivative claims and does not use a lack-of-control discount. In the alternative, the trial court may take evidence on the derivative claims and make a de novo determination of the fair value of the Goles's shareholder interest, consistent with section 2000. View "Goles v. Sawhney" on Justia Law

Plaintiffs Medical Marijuana, Inc. (MMI) and HempMeds PX, LLC (HempMeds) (jointly "the plaintiffs") sued defendants ProjectCBD.com (Project CBD), Martin Lee, and Aaron Cantu. Project CBD appealed a trial court's order denying their special motion to strike1 counts 1 and 3 of the complaint against them, which asserted causes of action for libel and false light. Plaintiff MMI held investments in numerous industrial hemp businesses, including plaintiff HempMeds. HempMeds manufactures and sells RSHO, a product containing cannabidiol (CBD) derived from the industrial hemp plant. MMI also holds interests in KannaLife Sciences, Inc. Per the first amended complaint, Jason Cranford, another defendant, resigned from KannaLife's Board of Directors and then began competing with MMI and HempMeds by selling CBD products through his Colorado medical marijuana dispensary, Rifle Mountain, LLC (Rifle Mountain - also named as a defendant in the case). Project CBD was a California nonprofit organization that identifies itself as an organization dedicated to promoting and publicizing research regarding CBD and other components of the cannabis plant. Project CBD had samples of plaintiffs’ cannabis product tested, and released results on their Facebook page. Plaintiffs contended that those results and other statements made about their products were false. On appeal, the Project CBD defendants contended that the trial court incorrectly determined that plaintiffs demonstrated a probability of prevailing on counts 1 and 3 against defendants. The Project CBD defendants also claimed that the trial court erred in concluding that plaintiffs were not limited public figures, meaning that the plaintiffs would not have to demonstrate that the Project CBD defendants acted with actual malice in publishing an article about the plaintiffs, and/or that the court erred in concluding in the alternative that the plaintiffs demonstrated that the Project CBD defendants acted with actual malice in publishing the article. The Court of Appeal concluded that the trial court's ruling with respect to the Project CBD defendants' anti-SLAPP motion directed at counts 1 and 3 was correct, albeit on grounds different from those relied on by the trial court. The Court therefore affirmed the trial court's order and remanded the matter for further proceedings. View "Medical Marijuana, Inc. v. ProjectCBD.com" on Justia Law

This case arose out of the purchase of a used 2007 BMW vehicle by plaintiff-appellant Michael Tun from defendant-respondent Plus West LA Corporation, dba CA Beemers (CA Beemers). Defendant-appellant Wells Fargo Dealer Services, Inc., an incorporated division of Wells Fargo Bank, N.A. (collectively Wells Fargo), subsequently accepted assignment of Tun's retail installment sales contract (RISC) under an agreement with CA Beemers and/or defendant and respondent West LA Corporation, dba California Beemers (California Beemers) (sometimes collectively dealer). Tun listed 11 causes of action in a third amended complaint, all based primarily on his contention that dealer knowingly and intentionally failed to disclose that the vehicle had suffered "frame/unibody damage" from a prior collision, which damage Tun further alleged "existed at the time it was sold" to him and which "substantially decreased the value of the vehicle." Tun alleged he first learned the vehicle had been in a prior collision when he took it to a mechanic near his home, after he experienced problems while driving the vehicle. After a multi-day trial, the jury returned a verdict in favor of the dealer, finding dealer had not committed fraud, breached its contract with Tun or otherwise engaged in conduct that violated the Consumers Legal Remedies Act. The jury also found that Wells Fargo was not derivatively liable as holder of the RISC. Following the verdicts, the trial court granted Tun's new trial motion only as to Wells Fargo, despite the fact Wells Fargo was only liable to the extent, if at all, dealer was liable. In granting the motion, the trial court determined it had erred in ruling pretrial that Tun could not comment to the jury regarding Wells Fargo's tender under section 2983.4—a statute awarding a party prevailing under the Automobile Sales Financing Act (hereafter ASFA) reasonable attorney fees and costs—of the amount Tun had paid under the RISC ($15,700). Wells Fargo appealed, arguing that the court had correctly ruled in limine that Tun could not comment on Wells Fargo's tender under section 2983.4 because that tender could not be treated as a judicial admission of liability; that the tender was irrelevant to the issues decided by the jury, which focused on the conduct of dealer in connection with the sale of the vehicle; that, even assuming error, Tun could not establish prejudice; and that the new trial order was improper because there were no issues left to try, inasmuch as Wells Fargo's liability, if any, was derivative of dealer's, and dealer was exonerated. After review, the Court of Appeals concluded the trial court erred in granting Tun a new trial against Wells Fargo because the Court concluded the court's pretrial ruling precluding comment on the Wells Fargo tender was not legal error. The Court rejected Tun's cross-appeal. View "Tun v. Wells Fargo Dealer Services" on Justia Law

The California Integrated Waste Management Act obligated local agencies to enact comprehensive waste management plans that would eventually divert half of their trash from landfills, Pub. Res. Code, 41780(a)(1), (2), and authorized local governments to issue franchises and licenses to private entities to provide services relating to the collection, transport, handling and disposal of solid waste. Plaintiff hauls waste under franchise agreements with cities in Sonoma County. Defendant, a waste management consultant, prepared a report for one of plaintiff’s competitors that questioned the accuracy of statements in plaintiff’s public reports about the percentages of the waste materials it collected that were recycled and thereby diverted from landfills. Plaintiff’s complaint alleged defendants’ report was false and defamatory and injured plaintiff’s business. Defendant filed an “anti-SLAPP” motion to dismiss. The trial court held defendants met their burden of showing plaintiff’s claims involve speech concerning a matter of public interest and are covered by the anti-SLAPP statute, Code of Civil Procedure 425.16 -425.18.4, but denied defendants’ motion finding that plaintiff demonstrated a probability of success on the merits. The court of appeal reversed, plaintiff failed to make out a prima facie case of falsity regarding defendants’ estimated diversion rates. View "Industrial Waste & Debris Box Service v. Murphy" on Justia Law

Nearly ten years ago, U-Haul Co. of California (UHC) sued Robinson, one of UHC’s independent dealers, for breach of contract and unfair competition after he terminated their contract and began renting Budget trucks from the former UHC dealership. UHC alleged a covenant not to compete in its dealer contract prohibited Robinson from offering the products of UHC’s competitors while a Yellow Pages ad, running at UHC’s expense, was still promoting Robinson’s business. Robinson sought a judicial declaration that the covenant was void due to fraud in the inducement. After UHC lost its request for a preliminary injunction and dismissed its complaint, Robinson filed a separate action alleging malicious prosecution by UHC in the prior lawsuit and violation of Business and Professions Code section 17200, the unfair competition law (UCL). A jury awarded Robinson $195,000 in compensatory damages for malicious prosecution. The trial court issued a permanent injunction prohibiting U-Haul from initiating or threatening judicial proceedings to enforce the noncompetition covenant. It awarded Robinson $800,000 in attorney’s fees as a private attorney general on his UCL cause of action. The court of appeal affirmed, holding that the injunction was proper and the court did not abuse its discretion in allowing Robinson to file a late motion for attorney’s fees. View "Robinson v. U-Haul Co. of Cal." on Justia Law

Defendants Eric Schrier, Frank Frederick, and Angela Martinez had been employed in various capacities by plaintiff SG Homecare, Inc. before abruptly leaving to start a competing firm, defendant Verio Healthcare, Inc. SG Homecare filed the underlying complaint, alleging the individual defendants breached their contractual and fiduciary duties, and misappropriated trade secrets. Schrier and his wife cross-complained against SG Homecare and its owner, Thomas Randall Rowley (together, the “SG parties”), alleging wrongful termination and intentional infliction of emotional distress. Defendant Verio Healthcare and the individual defendants were represented by Donald Wagner of the firm Buchalter Nemer, PLC. Shortly after the cross-complaint was filed, the SG Parties moved to disqualify Buchalter Nemer. The motion was based on an assertion that shortly before the individual defendants’ departure from SG Homecare, Buchalter Nemer executed a retainer agreement with SG Homecare and was either currently representing SG Homecare, or, alternatively, the present litigation was substantially related to Buchalter Nemer’s prior representation of SG Homecare (requiring disqualification in either event). Adding to mix: Wagner, as a member of the California State Assembly, relied on statutory entitlement to a continuance and extension of time of the entire litigation. The trial court denied the motion for a stay without explanation. Defendants petitioned the Court of Appeals court for a writ of mandate to order the trial court to grant the stay. The Appeals court summarily denied the petition, but the California Supreme Court granted review and remanded back to the Appeals court with instructions to issue an order to show cause. The Court of Appeals issued that order and denied the writ, namely because it found that the trial court acted within its discretion in its finding that the stay would "defeat or abridge the other party's" right to relief. View "Verio Healthcare v. Superior Court" on Justia Law