Justia Business Law Opinion Summaries

Duke was the founder and CEO of Skinsation. Defendants were Duke’s investors and members of the board of directors. In 2011, Callaway sued Skinsation, Duke, and defendants over a commercial lease, which Duke and defendants personally guaranteed. A judgment of $385,072. was entered, jointly and severally. Duke owned 49 percent of Skinsation stock and defendants combined owned 51 percent. In 2013, Skinsation’s outstanding capital stock had a fair market value of $1.2-$1.5 million. In May 2014, Duke and defendants unsuccessfully attempted to settle their respective contributions. The next day, defendants convened a shareholder meeting without notice to Duke and removed her as a director and terminated Duke’s employment. Defendants entered into a settlement with Callaway. For payment of $397,694, Callaway released defendants from all obligations under the judgment and assigned then all interest in the judgment. The judgment, plus accrued interest, was $444,286.56. Defendants served Duke with notice of levy on all of her Skinsation capital stock, claiming $448,029.90. Defendants purchased all of Duke’s shares at a sheriff’s sale. Duke sued. The court dismissed Duke’s cause of action for conversion. The court of appeal mandamus relief. A judgment debtor may not enforce an assignment of the judgment against a co-judgment debtor for more than the co-judgment debtor’s proportionate share of the judgment and may not enforce an assignment of the judgment against a co-judgment debtor without first seeking judicial determination of the proportionate share of the co-debtor’s liability. View "Duke v. Superior Court" on Justia Law

Apple shareholders filed a consolidated derivative action concerning Apple’s alleged pursuit and enforcement of anticompetitive agreements with other Silicon Valley companies to prohibit the recruitment of each other’s employees. Plaintiffs alleged that certain current and former members of Apple’s board of directors were aware of or tacitly approved of Apple’s practices and breached their fiduciary duties by permitting the illegal agreements over many years. Plaintiffs alleged that the Apple board never disclosed settlements of an earlier action filed by the Department of Justice based on violations of the federal antitrust laws and several federal class action lawsuits brought by employees of Apple and other technology companies. Given each board member’s alleged role in participating in or allowing the illegal agreements, plaintiffs claimed that any demand on Apple's board to institute the derivative action against the individual defendants should be excused as a futile and useless act. The superior court found that an amended complaint adequately alleged demand futility as to the board in place when the original action was filed. The composition of the board of directors had changed in the interim. The court of appeal disagreed. The court was required to assess demand futility as to the board in place when the amended complaint was filed. View "Apple, Inc. v. Superior Court" on Justia Law

ITV and the Company appealed the trial court's grant of a preliminary injunction for the Gurneys and Little Win, LLC. The Gurneys are the minority owners of the Company and formerly served as its CEOs. The Court of Appeal reversed the trial court's order to the extent that it reinstated the Gurneys to their positions managing the day-to-day operations of the Company. The court held that, under the terms of the employment agreements, the Company was entitled to terminate the Gurneys' employment at any time for good cause; the board may make decisions by majority vote, with the exception that some decisions require unanimity; the Gurneys' authority over the day-to-day operations of the Company was an exception to the exception; the exceptions to the exception did not grant the Gurneys lifetime jobs as managers of the Company; and the operating agreement, even when interpreted on its own, did not grant the Gurneys authority to manage the Company’s day-to-day operations indefinitely. Therefore, the court affirmed the portion of the preliminary injunction barring the Company from impinging on their rights as board members. View "ITV Gurney Holdings v. Gurney" on Justia Law

All Masonry & Landscape Supply (All Masonry) appealed a postjudgment order awarding attorney fees to Oldcastle, the prevailing party in a breach of contract action. Oldcastle manufactured masonry and concrete products, including its Belgard-branded concrete pavers and segmented retaining walls. All Masonry distributed landscape supplies and concrete products to customers. All Masonry claimed that in 2001, it entered into an agreement with Oldcastle to be Oldcastle's exclusive dealer of Belgard products in San Diego County. The 2001 dealer agreement was part written and part oral. In 2013, All Masonry sued Oldcastle for breaching the 2001 dealer agreement by distributing Belgard products through other dealers in San Diego County. Oldcastle prevailed on the breach of contract cause of action in 2015 when the court granted its motion for summary adjudication on that claim, rejecting All Masonry's contention that it had the exclusive right to sell Belgard at preferential pricing in San Diego County. Oldcastle filed a postjudgment motion to recover attorney fees in connection with All Masonry's breach of contract claim. The court awarded Oldcastle $180,120 in attorney fees for defending the breach of contract cause of action through summary adjudication and for litigating the postjudgment fees motion. The Court of Appeal reversed the award of attorney fees to Oldcastle, finding no clear and unequivocal evidence that the parties intended to incorporate the terms of a 2010 credit application into their 2001 dealer agreement, which was the basis of the fee award. Civil Code section 1642 does not allow the recovery of attorney fees in this case. View "R.W.L. Enterprises v. Oldcastle, Inc." on Justia Law

Former restaurant employees sued their former employer, Koji’s Japan, Inc. (Koji’s), Koji’s president, sole shareholder and director Arthur Parent, Jr. (Parent), and A.J. Parent Company, Inc., otherwise known as America’s Printer (America’s Printer), of which Parent was also the president, sole shareholder and director. The plaintiff employees alleged wage and hour claims under the federal Labor Code and the Fair Labor Standards Act of 1938 (FLSA), claims under the California unfair competition law (Bus. & Prof. Code, sec. 17200), and a claim under the California Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, sec. 2699 et seq.). Considering this appeal as a petition for a writ of mandate, the Court of Appeal granted writ relief by holding: (1) the trial court erred by granting the motion to certify a class as to plaintiffs’ claims against only Koji’s because the court applied improper criteria in determining Parent’s potential liability as a joint employer on a class-wide basis; (2) the trial court prejudicially erred by denying plaintiffs’ revised motion to compel further responses to a set of document requests, and also by sanctioning plaintiffs’ counsel; (3) because the Court directed the trial court to vacate its order denying the revised motion to compel further responses to discovery on alter ego issues, the Court directed the trial court to also vacate its findings that Parent and America’s Printer were not Koji’s alter egos; and (4) although the trial court’s statement of decision correctly cited the controlling case law in this matter, the statement of decision misapplied the law as set by that case. View "Turman v. Superior Court" on Justia Law

Laboratory Specialists International, Inc. (LSI) filed a complaint in Orange County Superior Court alleging causes of action against Shimadzu Scientific Instruments, Inc. (Shimadzu) for breach of contract, conversion, breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, and intentional and negligent interference with prospective economic relations. LSI appealed when the trial court dismissed its lawsuit against Shimadzu under the forum selection clause in the parties’ contract. LSI contended Shimadzu erred by requesting a dismissal in its demurrer dismissal based on the forum selection clause, rather than by a separate motion, and that the trial court erred by granting Shimadzu leave to recast its request for dismissal in a separate motion. In the alternative, LSI argued the court erred by: (1) dismissing LSI’s tort claims, which LSI argued did not arise out of or “pertain[]” to the parties’ contract; (2) finding the forum selection clause mandated Maryland as the proper fourm, rather than conducting an analysis under discretionary forum non conveniens factors; and (3) dismissing rather than staying LSI’s lawsuit. As we explain, these contentions are without merit, and we therefore affirm the court’s dismissal order. View "Laboratory Specialists International v. Shimadzu Scientific etc." on Justia Law

Intel acquired McAfee, in a cash sale at $48 per share. Plaintiff, a pension fund, on behalf of itself and a class, alleged that McAfee, Intel, and former members of McAfee’s board of directors, consisting of nine outside directors and the former president and CEO, DeWalt (defendants), engaged in an unfair merger process contaminated by conflicts; that DeWalt withheld material information about negotiations from McAfee’s directors, who failed to safeguard the process and approved an undervalued price; and that defendants omitted material information from the merger proxy statement on which McAfee’s shareholders relied in voting for the merger. The trial court, applying Delaware law, granted the defendants summary judgment, finding no triable issue of material fact regarding the individual defendants’ alleged breaches of fiduciary duty, and concomitantly no liability on behalf of the corporation for aiding and abetting. The court of appeal affirmed as to the nine directors and reversed as to DeWalt and the corporations. Plaintiff raised triable issues of material fact related to DeWalt’s apparent nondisclosure of arguably material information about a $50-per-share overture. DeWalt bears the burden under the enhanced scrutiny standard to show that he exercised his fiduciary duties in furtherance of the obligation “to secure the transaction offering the best value reasonably available.” View "Central Laborers' Pension Fund v. McAfee, Inc." on Justia Law

Yelp Inc., operator of a website for consumer reviews, petitioned for a writ of mandate to overturn an order compelling its production of documents that may reveal the identity of an anonymous reviewer on its site. Yelp also appealed from a separate order imposing $4,962.59 in monetary sanctions against it for failing to comply with the subpoena requiring production of the documents. Gregory Montagna filed a lawsuit against Sandra Jo Nunis and several Doe defendants alleging a single cause of action for trade libel. Montagna, an accountant, prepared a tax return for Nunis in 2015, initially quoting Nunis a “minimum” fee of $200 for the preparation of her return, based on her representation that her income was comprised exclusively of wages reported on a W-2 form, and she would require only a simple return. However, both Nunis’ income and the resulting tax return were allegedly more complicated than she had represented. As a consequence, Montagna charged Nunis $400 for preparation of the return, rather than the $200 fee he initially quoted. Nunis allegedly paid Montagna only $200, and refused to pay him more even after receiving “a collection letter” for the balance. And in November 2015, Nunis allegedly went online to the Yelp website under an alias and posted a negative review of Montagna. Yelp argued the trial court's orders had to be reversed because: (1) the trial court erroneously concluded Yelp lacked standing to assert the First Amendment rights of its anonymous reviewer as grounds for resisting the subpoena; and (2) the court further erred by concluding Montagna made a prima facie showing the posted review contained defamatory statements. The Court of Appeal agreed the trial court erred in ruling Yelp lacked standing to assert the First Amendment rights of its anonymous reviewer, but found no error in its determination Montagna made a prima facie showing the challenged review was defamatory. The Court concluded the latter finding was sufficient to support the trial court’s order compelling Yelp to produce the subpoenaed documents in the circumstances of this case. Consequently, the Court denied the petition for writ of mandate. "However, given the dynamic nature of this area of law - the primary cases we rely upon were decided after the trial court issued its ruling - we also conclude Yelp’s opposition to Montagna’s motion to compel was substantially justified." Thus the Court reversed the order imposing sanctions against Yelp. View "Yelp Inc. v. Superior Court" on Justia Law

Grace Walker appealed a superior court judgment denying her petition for a writ of administrative mandamus. The petition asked the court to set aside a decision of the Physical Therapy Board of California (the "Board") that subjected Walker to discipline based on a misdemeanor hit-and-run conviction and the Board's finding she had used alcohol in a manner dangerous to herself or others. The superior court concluded the misdemeanor conviction was not an appropriate ground for discipline because it was not sufficiently related to Walker's fitness to practice physical therapy, but that discipline was appropriate pursuant to Business and Professions Code sections 2239 and 2660 based on Walker's use of alcohol in a dangerous manner. On appeal, Walker argued the court erred because the statutes did not permit discipline of a physical therapist based on a single isolated instance of alcohol use in a dangerous manner without a specific finding of a nexus between the conduct at issue and the fitness of the individual to practice physical therapy. The Court of Appeal concluded sections 2239 and 2260 did permit the Board to impose discipline in this context and affirm the judgment. View "Walker v. Physical Therapy Bd. of California" on Justia Law

At 3:35 a.m. on the San Mateo Bridge, Ong’s vehicle collided with the Gonzalez vehicle. Gonzalez's passenger, Morales, was killed. At the accident scene, Ong said that he worked the night shift at Genentech was driving his personal vehicle to Genentech on his night off to collect resumes for “upcoming interviews.” Before the accident, Ong told a friend that he was going to Genentech to do something important for work. During his deposition, Ong gave various reasons for his trip, including picking up personal items from work, visiting his grandmother, and picking up the resume of his unemployed friend, Alvarez. Ong’s testimony with respect to Alvarez’s resume was impeached. Genentech presented evidence that all of Ong’s technician duties were performed at Genentech during work hours. Genentech did not require Ong to drive or own a vehicle and did not compensate Ong for travel time or expenses. The Morales family sued, asserting negligence. The court of appeal affirmed the dismissal of "respondeat superior" claims against Genentech. The“going and coming” rule precludes Genentech’s liability because Ong was driving for his own convenience and not at Genentech’s request or as part of his regular duties. Plaintiffs failed to establish a triable issue that Genentech was liable under the “special errand” exception to that rule. View "Morales-Simental v. Genentech" on Justia Law