Justia Business Law Opinion Summaries

By statute, a trial court has the discretion to appoint a receiver to aid in the collection of a judgment if doing so "is a reasonable method to obtain the fair and orderly satisfaction of the judgment." The Court of Appeal held that a trial court abuses that discretion if it appoints a receiver to aid in the collection of a money judgment where the record contains no evidence that the judgment debtors had obfuscated or frustrated the creditor's collection efforts and no evidence that less intrusive collection methods were inadequate or ineffective.The court reversed the trial court's order order appointing a receiver and its subsidiary injunction obligating the judgment debtors to cooperate with the receiver. In this case, the trial court abused its discretion in appointing a receiver to enforce Medipro's money judgment because there was no evidence—let alone the substantial evidence necessary to sustain a proper exercise of discretion—that Certified or Defendant Sy had engaged in obfuscation or other obstreperous conduct to the degree that the other collection mechanisms available under the Enforcement of Judgments Law were ineffective. View "Medipro Medical Staffing, LLC v. Certified Nursing Registry, Inc." on Justia Law

The Court of Appeal affirmed the trial court's order dismissing with prejudice plaintiffs' claims against defendants for breach of the implied covenant of good faith and fair dealing (bad faith claim) and violation of the Unfair Competition Law, Bus. & Prof. Code, section 17200 et seq. (UCL claim).The court concluded that an evaluation of the policy considerations underlying tort liability in the traditional insurance context demonstrates that home protection contracts are not sufficiently analogous to insurance to support the imposition of tort liability. Furthermore, the fact that the Insurance Code may regulate a company is not dispositive of whether that company should be subject to the same tort liability as traditional insurance companies. Rather, that issue is determined based on the policy considerations set forth in Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 43–44, and regardless of whether home protection companies are subject to certain Insurance Code regulations. The court also concluded that plaintiffs forfeited their judicial estoppel argument by failing to timely or adequately raise it in opposition to the demurrer. Finally, the court rejected plaintiffs' unfair competition claims, concluding that California Code of Regulations, title 10, section 2695.9 does not apply to defendant. View "Chu v. Old Republic Home Protection Company, Inc." on Justia Law

At issue in this appeal was a preliminary injunction prohibiting the County of San Diego, its public health officer Wilma Wooten, the California Department of Public Health (CDPH), and Governor Gavin Newsom from enforcing COVID-19-related public health restrictions against any business offering restaurant service in San Diego County, subject to safety protocols. Two San Diego businesses that offer live nude adult filed suit claiming the State and County restrictions on live entertainment violated their First Amendment right to freedom of expression. The State and County eventually loosened their restrictions on live entertainment, but as the COVID-19 pandemic worsened, they imposed new restrictions on restaurants. These new restaurant restrictions severely curtailed the adult entertainment businesses’ operations. But these new restrictions were unrelated to live entertainment or the First Amendment. Despite the narrow scope of the issues presented, the trial court granted expansive relief when it issued the injunction challenged here. "It is a fundamental aspect of procedural due process that, before relief can be granted against a party, the party must have notice of such relief and an opportunity to be heard." The Court of Appeal determined that because restaurant restrictions were never part of the adult entertainment businesses’ claims, the State and County had no notice or opportunity to address them. The trial court therefore erred by enjoining the State and County from enforcing COVID-19-related public health restrictions on restaurants. Because the procedure used by the trial court was improper, the trial court’s actions left the Court of Appeal unable to address the substance of this challenge to restaurant restrictions. View "Midway Venture LLC v. County of San Diego" on Justia Law

Beginning in 2005, petitioner San Joaquin Regional Transit District (District) began discussing with real parties in interest DSS-2731 Myrtle LLC and Sardee Industries, Inc. (collectively, "Sardee") the possible acquisition through negotiated purchase or eminent domain of a two-acre parcel in Stockton on which Sardee operated a manufacturing facility. Correspondence regarding appraisal of the property and Sardee’s rights in eminent domain took place in 2008, but efforts to negotiate a purchase ultimately failed, leading to the filing of an eminent domain complaint in 2010. In April 2011 a stipulated order of possession gave legal possession of the parcel to District with a right of Sardee to occupy a portion of the property as it explored options for a new facility, to wind down its operations and move elsewhere. Sardee undertook to move its Stockton operations to its facility in Lisle, Illinois, which it upgraded to handle ongoing work from its Stockton plant. Under the stipulated order Sardee could occupy the property without charge until March 2012 and until June 30, 2012, by payment of rent. By March 2012 most of its equipment and operations had been relocated; in April 2012 the District abandoned its condemnation action. Following dismissal of the action, Sardee sought damages under Code of Civil Procedure section 1268.620, which permitted an award of damages “after the defendant moves from property in compliance with an order or agreement for possession or in reasonable contemplation of its taking.” District argued the costs involved in closing down Sardee’s Stockton facility and moving all but the items remaining for shipment in March could not be recovered. The trial court disagreed with this all-or-nothing interpretation of the statutory language and concluded Sardee should have been permitted to present its damage claim to a jury, whereupon District filed its petition for writ of mandate, prohibition or other appropriate relief, and sought a stay of the damages trial. The Court of Appeal concurred with the trial court that sufficient evidence supported the court’s finding that Sardee had moved from the property, supporting application of section 1268.620. The District's petition was denied. View "San Joaquin Regional Transit Dist. v. Superior Court" on Justia Law

Coast filed suit against Memorial, a medical group seeking to buy Coast, after negotiations between the parties failed and Memorial hired people who were already working for Coast. The trial court ultimately granted summary judgment against Coast.In regard to the two trade secret claims, the Court of Appeal concluded that the trial court properly disposed of the medical codes secret claim, but remanded as to the physician productivity secret claim because Coast succeeded in generating a genuine factual dispute in this case. In regard to the claims for tortious interference with economic relations, the court concluded that the trial court was correct to summarily dispose of both of Coast's interference claims, because Coast offered no proof Memorial had engaged in wrongful conduct. Finally, the court concluded that the trial court correctly granted Memorial summary relief from Coast's cause of action for unfair competition. Accordingly, the court reversed the trial court's grant of summary judgment; directed the summary adjudication of all claims in Memorial's favor, with the exception of the claim for misappropriation on the physician productivity secret. The court remanded that claim for further proceedings. View "Coast Hematology-Oncology Associates Medical Group, Inc. v. Long Beach Memorial Medical Center" on Justia Law

In 2009, the president of the International Congress for Joint Reconstruction, Inc. (ICJR) retained Mark Sacaris, part owner of the Center for Healthcare Education and Research, Inc. (CHE), to assist ICJR in producing medical education conferences on the subject of joint-reconstruction surgery. Their agreement was unwritten, and there was no discussion of the rates ICJR would be charged. Sacaris was given full control over ICJR’s money accounts as part of the arrangement. Sacaris used ICJR’s money accounts to pay CHE’s invoices without notifying ICJR’s board members of the amounts ICJR was being charged. Over time, and also without informing the board of ICJR, he increased the scope of CHE’s services, thereby creating additional sources of profit for CHE, and indirectly for himself, but he did not disclose his interest in these arrangements to ICJR. Eventually the ICJR board was informed by Sacaris that ICJR had amassed a $2 million to CHE. ICJR terminated its relationship with Sacaris and CHE. CHE filed suit to recover amounts it claimed it was owed by ICJR under the agreement. ICJR cross-sued Sacaris and CHE, asserting Sacaris secretly profited from his relationship with ICJR. After a bench trial, the court found ICJR liable to CHE for breach of contract. Although the court also found that CHE and Sacaris breached their fiduciary duties to ICJR in earning all four categories of the profits ICJR sought to disgorge, the court awarded ICJR recovery only as to categories two and four. On appeal, ICJR contended the trial court erred in determining that ICJR could not recover disgorgement of CHE and Sacaris’s profits from their undisclosed charges for management services without proof their breach of fiduciary duties caused ICJR to suffer monetary damages. The Court of Appeal agreed ICJR was not required to show it suffered monetary harm to establish a right to disgorgement of CHE and Sacaris' profits from undisclosed charges for event management services. The Court of Appeal reversed that portion of the judgment affected by the error and remanded for the trial court to determine the appropriate amount of the award of disgorgement. However, the Court rejected ICJR’s claim that the court erred in determining that running symposia for pharmaceutical companies was not a corporate opportunity of ICJR. View "Center Healthcare Ed. & Res. v. Internat. Cong. Joint Reconst." on Justia Law

The Court of Appeal affirmed the trial court's order amending a judgment to add alter ego judgment debtors. After Triyar entered into a contract to purchase a hotel property from WSI, Triyar filed suit against WSI for causes of action including fraud and specific performance. The trial court found that WSI had not breached the contract, because Triyar's failure to learn of the Hyatt agreement's termination was due to Triyar's fault in failing to conduct a sufficient investigation. The trial court then awarded WSI $2,172,615 in attorney fees and costs. After Triyar appealed, the trial court awarded an additional $193,273.20 in fees and costs. After WSI was unable to collect any amount of the judgment, WSI made a motion to amend the judgment to add Steven Yari and Shawn Yari. The trial court found that Triyar is not capitalized for buying major hotels, and the finding that the Yaris were alter egos was a fair outcome. The trial court also found that even if the alter ego doctrine does not strictly apply, the inequities are such that an exception can be made.Under either de novo or abuse of discretion review, the court held that WSI prevailed on its motion to add the Yaris as judgment debtors. In this case, the Yaris concede that they had control of the underlying litigation and were virtually represented in that proceeding. The court also concluded that there is overwhelming evidence of a unity of interest and ownership such that the separate personalities of the entity and the owners do not exist. Furthermore, it would be inequitable to preclude WSI from collecting its judgment by treating Triyar as a separate entity. View "Triyar Hospitality Management v. WSI (II) – HWP, LLC" on Justia Law

Trevor Jones contended he was entitled to a percentage of the successful Pura Vida bracelet business established with his former friends and colleagues, defendants Paul Goodman and Griffin Thall. He claimed the parties had formed a partnership regarding a bracelet business and sued Goodman and Thall seeking (among other things) a partnership buyout under California Corporations Code section 16701. Defendants denied Jones’s claims, and judgment was entered in their favor. After trial, Defendants sought to recover attorney fees pursuant to section 16701, which authorized an equitable award of attorney and expert fees “against a party that the court finds acted arbitrarily, vexatiously, or not in good faith.” The trial court denied Defendants’ motion on two grounds: (1) the motion was untimely under applicable rules; and (2) on the merits, the court declined to find that Jones acted arbitrarily, vexatiously, or not in good faith. Defendants appealed, contesting the trial court's sua sponte determination the motion was untimely, and they further challenged the court’s refusal to find Jones acted arbitrarily, vexatiously, or not in good faith. After review, the Court of Appeal concurred with the trial court, rejected Defendants’ claims of error, and affirmed the order. View "Jones v. Goodman" on Justia Law

Plaintiffs Hillarie and Keith Levy appealed the dismissal of their lawsuit filed against defendant, Only Cremations for Pets, Inc. Plaintiffs alleged it agreed to cremate individually two of their dogs, but then intentionally sent them random ashes instead. Plaintiffs sought recovery of emotional distress damages under contract and tort law. The Court of Appeal determined: the complaint failed to state a cause of action under any contract theory; and there were no factual allegations showing the existence of any contract between plaintiffs and defendant. Plaintiffs’ veterinarian, not plaintiffs, contracted with defendant. However, the complaint adequately pled two tort theories: trespass to chattel and negligence. The Court found allegations here "fit comfortably" in a cause of action for trespass to chattel claim, which permitted recovery of emotional distress damages. The allegations also supported a negligence cause of action because defendant advertised its services as providing emotional solace, and thus it was foreseeable that a failure to use reasonable care with the ashes would result in emotional distress. The Court reversed and remanded, giving plaintiffs an opportunity to plead more fully a third-party beneficiary cause of action. View "Levy v. Only Cremations for Pets, Inc." on Justia Law

Quidel Corporation (Quidel) petitioned for a writ of mandate and/or prohibition to direct the trial court to vacate its order granting summary adjudication. Quidel contended the trial court incorrectly concluded a provision in its contract with Beckman Coulter, Inc. (Beckman) was an invalid restraint on trade in violation of Business and Professions Code, section 16600. Quidel argued the trial court improperly extended the holding from Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) beyond the employment context to a provision in the parties’ 2003 BNP Assay Agreement (the Agreement). In its original, published opinion, the Court of Appeal concluded it was not, granted the petition and issued a writ instructing the trial court to vacate the December 2018 order granting summary judgment on the first cause of action. The California Supreme Court then granted review of the Court of Appeal's opinion and ordered briefing deferred pending its decision in Ixchel Pharma, LLC v. Biogen, Inc., S256927. On August 3, 2020, the Supreme Court issued Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal.5th 1130 (2020), which held “a rule of reason applies to determine the validity of a contractual provision by which a business is restrained from engaging in a lawful trade or business with another business.” The Quidel matter was transferred back to the Court of Appeals with directions to vacate its previous opinion and reconsider the case in light of Ixchel. The appellate court issued a new opinion in which it concluded the trial court’s decision was incorrect. The trial court was directed to vacate the December 7, 2018 order granting summary adjudication on the first cause of action. View "Quidel Corporation v. Super. Ct." on Justia Law