Justia Business Law Opinion Summaries

Blizzard invested in a tire pyrolysis project in Kansas and subsequently sued Schaefers. A Kansas jury returned a $3.825 million fraud judgment, which was entered in California. The California court added a judgment debtor (BKS) pursuant to the “outside reverse veil piercing” doctrine, which arises when the request for piercing comes from a third party outside the targeted business entity. The targeted entity was BKS. Schaefers owns a 50 percent interest in that LLC. Schaefers’ wife, Karin, owns the other 50 percent. Neither Karin nor BKS was a defendant in the Kansas action. The California court found that BKS is Schaefers’ alter ego.The court of appeal affirmed in part. The evidence is sufficient to support the finding that BKS is Schaefers’ alter ego. The court remanded for further proceedings so that the trial court may weigh competing equities that bear on the veil-piercing issue. Blizzard is entitled to recover the damages awarded by the Kansas judgment, but Karin may be an innocent third party who would suffer substantial harm if recovery is accomplished through the reverse veil piercing; there is no indication that she was involved in the fraud committed by Schaefers. Karin may not be responsible for debts incurred by Schaefers after their separation in 1996. View "Blizzard Energy, Inc. v. Schaefers" on Justia Law

This appeal presented an issue of first impression for the Court of Appeals: does a commercial property insurance policy provide coverage for a business’s lost income due to the COVID-19 pandemic? After review of the specific insurance policy that California Mutual Insurance Company (California Mutual) issued to The Inns by the Sea (Inns) for its five lodging facilities, the Court determined Inns could not recover from California Mutual for its lost business income resulting from the COVID-19 pandemic. Further, Inns did not identify any manner in which it could amend its complaint to state a claim for coverage. Accordingly, the Court affirmed the trial court’s order sustaining California Mutual’s demurrer without leave to amend. View "The Inns by the Sea v. Cal. Mutual Ins. Co." on Justia Law

The appellants were two of a group of plaintiffs who sued eBay and PayPal, challenging provisions in their respective user agreements. Plaintiffs’ second amended complaint alleged 23 causes of action, 13 against eBay, seven against PayPal, and three against both defendants. The trial court dismissed, without leave to amend, 20 of the causes of action, including 14 claims against eBay. Three causes of action proceeded: breach of contract against both defendants and violation of the covenant of good faith and fair dealing against eBay. More than three years later, the appellants opted out of the case against eBay, and voluntarily dismissed the two claims against it. Judgment of dismissal was entered against them.The appellants appealed, contending the trial court got it wrong as to 11 of the dismissed causes of action. The court of appeal affirmed, noting that this was the third appeal of the case. The trial court properly dismissed the claims and did not abuse its discretion in doing so without leave to amend. All of the alleged causes of action failed to state a claim. The court stated that “counsel for appellants has apparently been urging the same contentions for some nine years, all without success. This is enough.” View "George v. eBay, Inc." on Justia Law

One beverage distributorship sued another and ultimately narrowed its lawsuit to a single tort claim for intentional interference with prospective economic advantage premised solely on the theory that the defendant had engaged in independently wrongful conduct by breaching a nondisclosure and non-circumvention agreement. This is an invalid theory as a matter of law under California Supreme Court precedent; an actor’s breach of contract, without more, is not “wrongful conduct” capable of supporting a tort, including the tort of intentional interference with prospective economic advantage. No one caught the error until the jury returned a special verdict in the plaintiff’s favor that was premised solely on the breach of the agreement.The court of appeal reversed. A jury’s special verdict for the plaintiff, based on conduct that does not constitute an actionable tort, cannot stand. Just as a trial court lacks subject matter jurisdiction to enter judgment for conduct that does not violate a criminal or civil statute, a trial court also lacks subject matter jurisdiction to enter judgment for allegedly tortious conduct, fashioned by common law, that the state’s highest court has determined is not tortious. A party’s conduct cannot confer subject matter jurisdiction upon a court, so the defendant’s delay in objecting is irrelevant. View "Drink Tank Ventures LLC v. Real Soda in Real Bottles, Ltd." on Justia Law

Plaintiffs alleged that they own an apartment complex and that their tenant purchased a washing machine from Best Buy, which was negligently installed. A resulting water leak resulted in significant damage to the property, rendering several units uninhabitable.Best Buy argued that its subsidiary had a contract with Penn Ridge, under which Penn Ridge “shall provide services . . . as a duly licensed broker of property by the U.S. Federal Motor Carrier Safety Administration … utilizing the services of independent motor carriers to effectuate the pick-up, delivery, and in-home installation of Merchandise” from Best Buy. Carriers are defined under the Agreement as “any independently owned and operated motor carrier under contract with [Penn Ridge] who may also provide Installation Services.” The carriers’ trucks did not display the Best Buy name or logo. Delivery teams did not wear any Best Buy branded clothing. The equipment used by the delivery teams varied among carriers. Penn Ridge alone determined if the carriers were qualified to provide necessary delivery and installation services. The contracts stated the carriers were providing services as independent contractors, Best Buy gave Penn Ridge access to its routing system and required that contractors comply with certain Best Buy policies and procedures.The court of appeal affirmed summary judgment in favor of Best Buy. There is no material dispute that the washing machine was installed by an independent contractor. View "Bacoka v. Best Buy Stores, L.P." on Justia Law

Oakland businesses must obtain a business tax certificate and pay business license taxes each year, based on the type of activities in which the business is engaged. A separate business tax certificate is required for each activity of the business unless the activity comprises less than 20 percent of the total gross receipts of the business. City tax authorities determine the appropriate business tax classifications based on the information reported by the taxpayer. Host held Port Department permits to occupy space and operate food, beverage, retail, and duty-free concessions at Oakland International Airport. The permits authorized Host to sublease its space to other parties with consent. In 2015, based on an audit of Host’s financial records, an auditor determined that Host owed Oakland unpaid business taxes, penalties, interest, and fees for rental income from subleases,2006-2015. Host had obtained a business certificate and paid business tax for its retail activities, but not for subleasing.Host unsuccessfully appealed, asserting that it was engaged only in retail sales (not commercial subleasing), that the 20 percent exception applied, and that Oakland could not collect some of the back taxes because of the statute of limitations. The Board, the trial court, and the court of appeal upheld the determination of a $371,195.40 tax liability. View "Host International, Inc. v. City of Oakland" on Justia Law

Gray received emergency medical care at St. Mary Medical Center, owned and operated by Dignity Health. He received a bill that included an “ ‘ER LEVEL 2 W/PROCEDU’ ” charge. Gray claims Dignity’s failure to disclose, before providing emergency medical treatment, that its bill for emergency services would include such a charge—either by posting “signage in and around” the emergency department or “verbally during the patients’ registration process” —is an unfair business practice under the Unfair Competition Law (UCL) and unlawful under the Consumers Legal Remedies Act (CLRA).The court of appeal affirmed the dismissal of the suit. Gray does not claim that by including an ER Charge in its billing, Dignity violated any of the extensive state and federal statutory and regulatory laws governing the disclosure of hospital billing information and the treatment of persons presenting for treatment at an emergency department. Nor does he take issue with the hospital’s “chargemaster” amount for the Level 2 ER Charge, which his medical insurance largely covered. View "Gray v. Dignity Health" on Justia Law

Alevy was an owner, officer, and board member of Amusement, a real estate company, engaged in the ongoing Stern Litigation. In 2010, Alevy offered Missakian employment as in-house counsel at Amusement, including working on the Stern Litigation. Under the Oral Contract, Missakian would receive a salary of $325,000, and, after the Stern Litigation ended, Missakian would receive a bonus of $6,250 for each month he had worked on that litigation plus 10 percent of the recovery, excluding ordinary litigation costs. The parties exchanged multiple written drafts but never signed a written contract. Missakian left Amusement in 2014. The Stern Litigation settled months later. Amusement received $26 million. Missakian never received the Monthly Bonus or the Stern Litigation Bonus.A jury issued a verdict in favor of Missakian on the claims for breach of oral contract and promissory fraud and made special verdict findings in favor of Alevy on promissory fraud. The trial court granted judgment notwithstanding the verdict (JNOV) on Missakian’s promissory fraud claim against Amusement.The court of appeal reversed. The Oral Contract is void under Business and Professions Code section 6147, 2 which requires contingency fee agreements to be in writing. The jury’s special verdict on promissory fraud was inconsistent because it found Alevy did not make a false promise, but that Amusement (acting only through Alevy) did. Because the court cannot choose between the jury’s inconsistent responses, the court should have ordered a new trial. View "Missakian v. Amusement Industry, Inc." on Justia Law

Plaintiff-appellant Cheryl Thurston was blind and used screen reader software to access the Internet and read website content. Defendant-respondent Omni Hotels Management Corporation (Omni) operated hotels and resorts. In November 2016, Thurston initiated this action against Omni, alleging that its website was not fully accessible by the blind and the visually impaired, in violation of the Unruh Civil Rights Act. By way of a special verdict, the jury rejected Thurston’s claim and found that she never intended to make a hotel reservation or ascertain Omni’s prices and accommodations for the purpose of making a hotel reservation. On appeal, Thurston contended the trial court erred as a matter of law: (1) by instructing the jury that her claim required a finding that she intended to make a hotel reservation; and (2) by including the word “purpose” in the special verdict form, which caused the jury to make a “factual finding as to [her] motivation for using or attempting to use [Omni’s] Website.” Finding no reversible error, the Court of Appeal affirmed the trial court. View "Thurston v. Omni Hotels Management Corporation" on Justia Law

Leonard sought the involuntary dissolution of the family business. After his brothers, Michael and Joseph, invoked their statutory right to buy Leonard’s interests in the business pursuant to a court-ordered appraisal, the parties stipulated to add five LLCs to the 14 entities that were already subject to the appraisal and buyout proceeding. The court confirmed a valuation of Leonard’s interests and issued an alternative decree ordering that Michael and Joseph had to pay the appraised amount by a certain date and that, if they did not, the entities would be wound up and dissolved. Michael and Joseph did not pay the buyout amount. The court proceeded to wind up and dissolve the business, including the five additional LLCs. Meanwhile, Leonard proceeded on a claim for breach of fiduciary duty; the court awarded Leonard compensatory and punitive damages.Michael and Joseph argued the alternative decree to wind up and dissolve the business and the “follow-up" orders were void because the trial court lacked jurisdiction to dissolve the five LLCs. The court of appeal affirmed the order of dissolution but reversed the award of damages for breach of fiduciary duty. The trial court had fundamental jurisdiction; Michael and Joseph are estopped from collaterally attacking the alternative decree. Leonard lacked standing to assert breach of fiduciary duty; that cause of action was derivative, not individual. View "Schrage v. Schrage" on Justia Law