Justia Business Law Opinion Summaries

Plaintiff Franklin Eng appealed a judgment in favor of defendants Michael Patrick Brown and Gerald Levy following a jury trial. Eng claimed that Brown and Levy breached their fiduciary duties to him as purported partners or joint venturers in the ownership and operation of the Tin Fish Gaslamp, a seafood restaurant in San Diego. The jury found that Eng, Brown, and Levy entered into a partnership or joint venture, but it was terminated when they formed a corporation, B.L.E. Fish, Inc. to purchase and operate the restaurant. Eng's claim for breach of fiduciary duty based on a partnership or joint venture was therefore unsupportable. Eng argued on appeal that, among other things:(1) the trial court erred by denying his request, in a motion in limine, that the court find that the parties created a partnership as a matter of law; (2) the court erred by denying his motion in limine seeking to exclude any evidence or argument that B.L.E. Fish merged with or superseded the partnership; (3) the court erred by granting Brown and Levy's motion to amend their answer to assert an affirmative defense based on merger or supersession; (4) the court erred by denying Eng's motion for directed verdict; (5) the court committed instructional error (and a related error in the special verdict) regarding merger and supersession; (6) the court erred in its response to a juror question during deliberations; (7) the court erred by denying Eng's motion to amend his complaint to add a claim for breach of fiduciary duties based on the parties' corporate relationship; (8) the court erred by denying Eng's motion to strike the testimony of a defense expert witness; and (9) the court erred by denying Eng's ex parte application for the release of juror contact information. Finding no reversible errors, the Court of Appeal affirmed. View "Eng v. Brown" on Justia Law

GMRI, Inc. a restaurant operator, appealed a judgment entered in favor of the State Board of Equalization (the Board) after the trial court granted the Board’s summary judgment motion. Between 2002 and 2004 (period in dispute), GMRI operated Olive Garden and Red Lobster restaurants in California. Customers of these restaurants were notified on their menus that an “optional” gratuity of either 15 or 18 percent (depending on which restaurant and time period within the period in dispute) “will be added to parties of 8 or more.” When it was added, a manager was required to swipe his or her manager’s card through the restaurant’s point- of-sale (POS) system and then manually add the gratuity to the bill. The bill generated and presented to the customer would then contain the total cost of the meal, the applicable tax, the amount of the large party gratuity added by the manager, and the sum of these amounts as the total amount to be paid. In line with the word “optional,” the Company’s policy was that its restaurant managers would always remove a large party gratuity if asked by the customer to do so. However, unless such a request was made, the large party gratuity would remain on the bill as a portion of the total amount. And where that customer paid with a credit card, the credit card slip would contain the amount of the meal plus tax, the amount of the large party gratuity, the total amount, and then a blank line designated, “Add’l Tip,” followed by another blank line designated, “Final Total.” The trial court concluded a 15 or 18 percent gratuity restaurant managers automatically added to parties of eight or more without first conferring with the customer amounted to a “mandatory payment designated as a tip, gratuity, or service charge” under California Code of Regulations, title 18, section 1603 (g), and therefore part of the Company’s taxable gross receipts, in one circumstance: where the large party gratuity was added and neither removed nor modified by the customer. Finding no error in affirming the Board's decision, the Court of Appeal affirmed the trial court. View "GMRI, Inc. v. CA Dept. of Tax & Fee Admin." on Justia Law

The 2016 amendment to Corporations Code section 17707.06 applied to a certificate of cancellation filed by plaintiff in 2014. The Court of Appeal held that plaintiff concealed the certificate of cancellation and then unsuccessfully challenged its authenticity, prolonging the proceedings into 2016 when the changes to section 17707.06 took effect. The court reasoned that, had plaintiff been forthcoming, the case would have been dismissed under the prior law. In this case, it would be unfair to reward plaintiff's delay by allowing it to take advantage of the 2016 law. View "DD Hair Lounge v. St. Farm General Insurance Co." on Justia Law

The Court of Appeal reversed the judgment of dismissal entered after the trial court sustained without leave to amend the demurrer of Trader Joe's to plaintiff's first amended complaint. The court held that plaintiff adequately stated a cause of action for intentional interference with contractual relations. The court reasoned that one, like Trader Joe's here, who was not a party to the contract or an agent of a party to the contract was a "stranger" for purpose of the tort of intentional interference with contract, and plaintiff need not allege an independently wrongful act to state his cause of action for interference with contract. The court held that plaintiff adequately stated causes of action for intentional and negligent interference with prospective economic advantage. View "Redfearn v. Trader Joe's Company" on Justia Law

The Court of Appeal reversed the judgment of dismissal entered after the trial court sustained without leave to amend the demurrer of Trader Joe's to plaintiff's first amended complaint. The court held that plaintiff adequately stated a cause of action for intentional interference with contractual relations. The court reasoned that one, like Trader Joe's here, who was not a party to the contract or an agent of a party to the contract was a "stranger" for purpose of the tort of intentional interference with contract, and plaintiff need not allege an independently wrongful act to state his cause of action for interference with contract. The court held that plaintiff adequately stated causes of action for intentional and negligent interference with prospective economic advantage. View "Redfearn v. Trader Joe's Company" on Justia Law

Petitioner Apple, Inc. (Apple) is the defendant in a putative class action filed by plaintiffs and real parties in interest Anthony Shamrell and Daryl Rysdyk. In their operative complaint, plaintiffs alleged that Apple's iPhone 4, 4S, and 5 smartphones were sold with a defective power button that began to work intermittently or fail entirely during the life of the phones. Plaintiffs alleged Apple knew of the power button defects based on prerelease testing and postrelease field failure analyses, yet Apple began selling the phones and continued to sell the phones notwithstanding the defect. The trial court granted plaintiffs' motion for class certification but expressly refused to apply Sargon Enterprises, Inc. v. University of Southern California, 55 Cal.4th 747 (2012) to the declarations submitted by plaintiffs' experts. The trial court believed it was not required to assess the soundness of the experts' materials and methodologies at this stage of the litigation. The Court of Appeals determined that belief was in error, and a prejudicial error. “Sargon applies to expert opinion evidence submitted in connection with a motion for class certification. A trial court may consider only admissible expert opinion evidence on class certification, and there is only one standard for admissibility of expert opinion evidence in California. Sargon describes that standard.” The Court of Appeal directed the trial court to vacate its order granting plaintiffs' motion for class certification and reconsider the motion under the governing legal standards, including Sargon. View "Apple Inc. v. Superior Court" on Justia Law

Petitioner Apple, Inc. (Apple) is the defendant in a putative class action filed by plaintiffs and real parties in interest Anthony Shamrell and Daryl Rysdyk. In their operative complaint, plaintiffs alleged that Apple's iPhone 4, 4S, and 5 smartphones were sold with a defective power button that began to work intermittently or fail entirely during the life of the phones. Plaintiffs alleged Apple knew of the power button defects based on prerelease testing and postrelease field failure analyses, yet Apple began selling the phones and continued to sell the phones notwithstanding the defect. The trial court granted plaintiffs' motion for class certification but expressly refused to apply Sargon Enterprises, Inc. v. University of Southern California, 55 Cal.4th 747 (2012) to the declarations submitted by plaintiffs' experts. The trial court believed it was not required to assess the soundness of the experts' materials and methodologies at this stage of the litigation. The Court of Appeals determined that belief was in error, and a prejudicial error. “Sargon applies to expert opinion evidence submitted in connection with a motion for class certification. A trial court may consider only admissible expert opinion evidence on class certification, and there is only one standard for admissibility of expert opinion evidence in California. Sargon describes that standard.” The Court of Appeal directed the trial court to vacate its order granting plaintiffs' motion for class certification and reconsider the motion under the governing legal standards, including Sargon. View "Apple Inc. v. Superior Court" on Justia Law

Plaintiffs sued Dentsply, Cavitron's manufacturer and marketer, on behalf of California dentists who purchased the Cavitron ultrasonic scaler for use during oral surgical procedures, under the Unfair Competition Law (UCL) (Bus. & Prof. Code, 17200) and for breach of express warranty. Plaintiffs claim that the Directions for Use indicate Cavitrons can be used in “[p]eriodontal debridement for all types of periodontal diseases,” which by implication included oral surgery; in fact, they cannot because the device accumulates biofilm in its waterlines and is incapable of delivering sterile water during surgical procedures. Following a remand, the trial court certified the class, conducted a bench trial, and rejected all claims. The court of appeal affirmed, agreeing that plaintiffs, as licensed dentists, were well aware that biofilm forms in all dental waterlines and that Cavitrons do not produce sterile water. The evidence failed to establish that the class was likely to be misled. The weight of the evidence established that dental professionals did not understand the warranty that the Cavitron was suitable for use in “[p]eriodontal debridement for all types of periodontal diseases,” as a statement that the Cavitron delivered sterile water or water without biofilm. View "Patricia A. Murray Dental Corp. v. Dentsply International., Inc." on Justia Law

The oral agreement at issue in this appeal was made in connection with a transaction by which three companies, of which Albert Kanno was the majority shareholder, were sold to two Delaware corporations. The transaction was documented principally by three writings, each of which had an integration clause. A jury found in favor of Kanno and against Marwit Capital Partners II, L.P. (Marwit Capital) and Marwit Partners, LLC (Marwit LLC) on Kanno’s claim for breach of the oral agreement. After the jury rendered its verdict, the trial court concluded the parol evidence rule did not bar Kanno’s breach of contract claim and that the oral agreement was enforceable. Marwit Capital and Marwit LLC (together, Marwit) appealed. The Court of Appeal concluded the three written agreements were at most partial integrations, and, therefore, the oral agreement was enforceable if its terms did not directly contradict and were consistent with those three agreements, and the Court found no direct contradiction or inconsistency. View "Kanno v. Marwit Capital Partners II" on Justia Law

In these consolidated cases stemming from the sale and purchase of a partnership interest, SP appealed from a judgment of dismissal following the granting of the trial court's own motion for judgment on the pleadings in SP's breach of contract and conversion action against defendant. SP also appealed from the post-judgment order granting defendant his contractual attorney fees. The Court of Appeal held that SP adequately stated causes of action for breach of contract and conversion and reversed the judgment. In this case, even if the Necessary Approvals were legally required to effectuate a transfer of the Partnership Interest, SP's failure to obtain them was not fatal to its breach of contract claim. Furthermore, SP's conversion claim was not a generalized claim for money but rather a claim for a specific identifiable sum of money received by defendant for SP's benefit. Finally, the court reversed the order awarding fees. View "SP Investment Fund I LLC v. Cattell" on Justia Law