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California Law Update – August 2021

By August 31, 2021December 29th, 2021Law Updates
  1. (Arbitration) 100-day deadline to file petition to vacate arbitration award cannot be altered by agreement. Law Finance Group, LLC v. Sarah Plott Key (No. B305790 Los Angeles County Super. Ct. No. 19STCP04251 California Courts of Appeal Second Appellate District Division Two Filed July 30, 2021)
  2. (Loss of Life Damages) Prohibiting ‘loss of life damages’ would run afoul of 42 U.S.C. Section 1983’s remedial purpose. Fermin Vincent Valenzuela; V.V. v. City of Anaheim; Daniel Wolfe; Woojin Jun; Daniel Gonzalez (No. 20-55372 D.C. Nos. 8:17-cv-0000278-CJC-DFM 8:17-cv-02094-CJC-DFM United States Court of Appeals Ninth Circuit Filed August 3, 2021)
  3. (Expert Testimony) Expert’s declaration showed triable issue as to asbestos exposure under re-entrainment theory, even if he neglected to mention that phenomenon during his deposition. Beth Harris v. Thomas Dee Engineering Co. Inc. (No. A153106 Alameda County Super. Ct. No RG14725868 California Courts of Appeal First Appellate District Division Five Filed August 4, 2021)
  4. (Driver’s License Status) Vehicle owners must inquire into prospective driver’s license status before allowing driver to operate their vehicle. Blake McKenna v. Lance Beesley (No. D077189 Super. Ct. No. 37-2018-00009594-CU-PA-CTL California Courts of Appeal Fourth Appellate District Division One Filed August 6, 2021)
  5. (Peer Review) No disqualification of hearing officer serving on medical peer review panel when financial benefit is not sufficient to raise meaningful risk of bias. Sundar Natarajan v. Dignity Health (California Supreme Court. No. S259364, Case fully Briefed Sep. 28, 2020, Filed August 12, 2021)
  6. (Medical Bills) Plaintiff was required to show that medical bills were actually incurred before court admitted those bills as evidence, but error was harmless because jury’s award fell within experts’ valuations. Malak Melvin Abdul Qaadir v. Ubaldo Gurrola Figueroa (No. B306011 Los Angeles County Super. Ct. No. BC656206 California Courts of Appeal Second Appellate District Division Eight Filed August 11, 2021)
  7. (Landowner Liability) Landowner owe no duty to independent contractors or its workers to remedy or adopt other measures to protect them against known hazards on premises. Luis Gonzales v. John R. Mathis (No. S247677, Case Fully Briefed Nov. 18, 2018, Oral Argument Jun. 1, 2021, Filed Aug. 19, 2021)
  8. (Anti-SLAPP) Anti-SLAPP motion may not be directed to affirmative defense. Morris Cerullo World Evangelism v. Newport Harbor Offices & Marina, LLC (No. G058836 Super. Ct. No. 30-2019-01056982 California Courts of Appeal Fourth Appellate District Division Three Filed August 18, 2021)
  9. (Superseding Cause) Because jury found that treatment facility was negligent and its negligence was a cause of patient’s suicide, court did not err in not instructing jury on superseding cause defense. Barbara Green v. Healthcare Services, Inc. (No G057950 Super Ct. No. 30-2017-00958866 California Courts of Appeal Fourth Appellate District Division Three Filed August 31, 2021)

The above referenced court opinions have come to our attention during last month. Please find below a brief summary of these opinions for your consideration.

  1. (Arbitration) 100-day deadline to file petition to vacate arbitration award cannot be altered by agreement. Law Finance Group, LLC v. Sarah Plott Key (No. B305790 Los Angeles County Super. Ct. No. 19STCP04251 California Courts of Appeal Second Appellate District Division Two Filed July 30, 2021)

Plaintiff filed a petition in court to confirm an arbitration award. Nearly 4 months after, and 130 days after service of the modified arbitration award, the respondent filed a motion to vacate the award. The motion claimed that the arbitrators exceeded their authority in the matter. The trial court agreed with the respondent and vacated the arbitration award. On appeal, the appellate court did not reach the substantive issue because it found that the respondent did not timely request that the arbitration award be vacated.

Under California Code of Civil Procedure section 1288 a petition to vacate an arbitration award must be filed and served not later than 100 days after service of the award. Section 1288.2 imposes the same deadline on a response to a petition to confirm an arbitration award when a response requests that the award be vacated. These deadlines are jurisdictional and cannot be modified or altered by a party’s agreement. Thus, the trial court lacked jurisdiction to consider the respondent’s request to vacate, and the arbitration award should have been confirmed.

  1. (Loss of Life Damages) Prohibiting ‘loss of life damages’ would run afoul of 42 U.S.C. Section 1983’s remedial purpose. Fermin Vincent Valenzuela; V.V. v. City of Anaheim; Daniel Wolfe; Woojin Jun; Daniel Gonzalez (No. 20-55372 D.C. Nos. 8:17-cv-0000278-CJC-DFM 8:17-cv-02094-CJC-DFM United States Court of Appeals Ninth Circuit Filed August 3, 2021)

This matter arose out of an encounter between local police officers and individual who died after an encounter with the officers that involved multiple chokeholds and taser attacks. The family members of the deceased filed a federal 42 U.S.C. Section 1983 based civil rights claim, as well as claims of wrongful death and other theories of liability under California Law. The jury awarded the plaintiffs millions of dollars including monies for the decedent’s “loss of life,” which was independent of any pain and suffering that he endured during and after the struggle with the officers. The defendants argued in their post-trial motions that California state law did not recognize the loss of life damages, neither should the Section 1983 claim. The federal district court concluded that Section 1983 permitted the recovery of loss of life damages and that California state law to the contrary was inconsistent with the federal statute’s goals. The defendants appealed.

On appeal, the court noted the California law forbids recovery for a decedent’s loss of life per California Code of Civil Procedure Section 377.34. The appellate court reviewed the Chaudhry v. City of Los Angeles case, which addressed whether section 377.34’s prohibition of pre-death pain and suffering damages prevented Section 1983 plaintiffs from obtaining such relief. The court recognized that one of Congress’s primary goals in enacting Section 1983 was to provide a remedy for killings unconstitutionally caused by agents of state governments, and that in cases where the victim dies quickly, there often will no damage remedy at all under Section 377.34. Both the Chaudhry case and this case involved death caused by a violation of federal law, and both considered the limits Section 377.34 places on Section 1983 plaintiffs. As in Chaudhry, prohibiting loss of pain and suffering or a loss of life damages would run afoul of Section 1983’s remedial purpose as much as the ban on pre-death pain and suffering damages. Therefore, Section 377.34’s prohibition of loss of life damages was inconsistent with Section 1983 and could be allowed in those cases.

  1. (Expert Testimony) Expert’s declaration showed triable issue as to asbestos exposure under re-entrainment theory, even if he neglected to mention that phenomenon during his deposition. Beth Harris v. Thomas Dee Engineering Co. Inc. (No. A153106 Alameda County Super. Ct. No RG14725868 California Courts of Appeal First Appellate District Division Five Filed August 4, 2021)

Plaintiff was diagnosed with mesothelioma. Before dying, he and his spouse filed a lawsuit against the engineering company which preformed repairs on boilers aboard a ship where the plaintiff worked. Plaintiff testified that he worked in the broiler room but did not see anyone working on the boilers. Plaintiffs’ expert on asbestos exposure was asked about the plaintiff’s testimony in this deposition. He stated, “If he wasn’t present when the work was done, then I don’ think there’d be any issue regarding any exposure.” However, plaintiff’s expert declaration stated that the plaintiff did not need to be present at the exact time that the insulation was being removed to be exposed. Instead, removal of the asbestos-containing materials from the boilers would have exposed plaintiff to asbestos whenever he was in the boiler room because asbestos fibers can remain suspended in the air and be continuously re-suspended (re-entrainment). The defendant moved for summary judgment based upon the plaintiff and the expert’s testimony. It argued that the expert’s declaration should be disregarded because it contradicted his deposition testimony and because experts may not testify to opinions not disclosed during their deposition. The trial court granted the defendant’s motion.

The appeals court reversed noting that in some cases it is proper to “disregard” an expert’s declaration where the expert contradicted his prior deposition testimony. However, in cases supporting this rule, the expert’s declaration did not provide a basis for the difference between the opinion offered during the deposition and in the declaration. In contrast, the plaintiff’s expert here explained the difference in his opinion by referencing the re-entrainment theory. The expert’s declaration showed a triable issue of fact as to exposure under the re-entrainment theory, even if he neglected to mention that phenomenon during this deposition. The trial court in this case was not presented with a declaration that flatly contradicted deposition testimony and provided no basis to conclude that the opinion expressed in the declaration was actually the valid one.

  1. (Driver’s License Status) Vehicle owners must inquire into prospective driver’s license status before allowing driver to operate their vehicle. Blake McKenna v. Lance Beesley (No. D077189 Super. Ct. No. 37-2018-00009594-CU-PA-CTL California Courts of Appeal Fourth Appellate District Division One Filed August 6, 2021)

The tort of negligent entrustment of a motor vehicle and the tort of negligent hiring of a person to drive a vehicle are both premised on the awareness by the defendant, constructive or actual, that the person is unfit or incompetent to drive. In this appeal, the appellate division considered two issues related to the scope of the constructive knowledge element of these torts.

First, the court considered the effect of Vehicle Code section 14604, on the common law tort of negligent entrustment of a motor vehicle. Section 14604 requires an owner of a motor vehicle to make a reasonable effort or inquiry to determine whether the prospective driver possesses a valid driver’s license before allowing him or her to operate the owner’s vehicle. The appellate court concluded that a jury may find that an owner who breaches its section 14604 duty and permits an unlicensed driver to drive the owner’s vehicle is incompetent to drive. It also considered whether a person may be held liable for the common law tort of negligent hiring when the person hires another and allows the hiree to drive a vehicle under the hirer’s control without making a reasonable effort or inquiry to determine whether the hiree has an appropriate driver’s license, and the hiree in fact lacks such license. Section 14606, subd. (a) provides a person shall not hire any person to drive a motor vehicle owned by him or her or under his or her control upon the highways unless that person is licensed for the appropriate class of vehicle to be driven. Under these circumstances, the appeals court concluded that a jury could find that the hirer had constructive knowledge of the hiree’s incompetence to drive.

  1. (Peer Review) No disqualification of hearing officer serving on medical peer review panel when financial benefit is not sufficient to raise meaningful risk of bias. Sundar Natarajan v. Dignity Health (California Supreme Court. No. S259364, Case fully Briefed Sep. 28, 2020, Filed August 12, 2021)

Pursuant to California’s peer review statute, a hospital must afford a physician a fair hearing before revoking the physician’s staff privileges. (Business and Professions Code of section 809 et seq.) A panel of the physician’s peers generally serves as a trier of fact at these proceedings. Proceedings before a peer review panel may be conducted by a hearing officer who makes evidentiary and procedural rulings, but who may not vote on the merits. To ensure impartiality, the statute provides that neither panel members nor hearing officers may gain a direct financial benefit from the outcome.

The question before the California Supreme Court, was whether a person hired by a hospital to serve as a hearing officer may be disqualified for financial bias under the above referenced Business and Professions Code section on the grounds that the officer has an incentive to favor the hospital in order to increase the chances of receiving future appointments. The Court of Appeal in this case answered “no”. The California Supreme Court reached a different conclusion. While a hearing officer’s interest in future employment is not automatically disqualifying, neither is it categorically beyond the reach of the statute. In some cases, depending on the circumstances, the hearing officer’s financial interest in currying favor with the hiring entity may create an intolerable risk of bias requiring disqualification under the statute. But because the record did not establish this was such a case, the California Supreme Court affirmed the judgment of the Court of Appeal.

In this matter, the hearing officer was formally appointed by a hospital system. Since retiring from his law firm, the hearing officer received most of his income from hearing officer work at various health facilities, often earning substantial sums from these appointments. Thus, the hearing officer probably had more than a trivial incentive to put himself in a good position for future hearing officer appointments with the hospital system. However, the officer’s contract prohibited further appointments at the health system for a period of three years, meaning that the officer only immediate employment prospects lay with facilities not involved in the particular proceeding at issue. Whatever financial interest the officer may have had in the outcome of the proceedings at this health system, it was not sufficient to raise a meaningful risk of bias.

  1. (Medical Bills) Plaintiff was required to show that medical bills were actually incurred before court admitted those bills as evidence, but error was harmless because jury’s award fell within experts’ valuations. Malak Melvin Abdul Qaadir v. Ubaldo Gurrola Figueroa (No. B306011 Los Angeles County Super. Ct. No. BC656206 California Courts of Appeal Second Appellate District Division Eight Filed August 11, 2021)

Defendants appealed from a judgment awarding economic and noneconomic damages to the plaintiff in a personal injury suit arising from a traffic collision. Plaintiff sought medical treatment for his injuries from lien providers who did not accept his insurance plan. The medical bills from the lien providers remained unpaid at the time of trial.

The defendants contend that the trial court erred by (1) admitting evidence of the full unpaid medical bills and the medical bills paid by plaintiff’s insurance plan to approve his past and future medical damages; (2) excluding testimony that plaintiff’s attorney referred him to the lien providers; (3) precluding Defendants from arguing the plaintiff failed to mitigate his damages when he chose providers who did not accept his medical insurance; (4) denying Defendants’ motion for mistrial; and (5) denying their request for a continuance. According to the Defendants, these errors culminated in an excessive damages award. The appeals court concluded none of these grounds warranted reversal and affirmed the judgment.

Before trial the defendants had made a motion limine to exclude evidence of the plaintiff’s unpaid medical bills. At trial, the plaintiff presented evidence of his medical bills and, except for Kaiser services, his medical care was provided on a lien basis and at that time, no payments had been made. Plaintiff introduced an expert who used benchmark databases for medical services in a local area and opined the reasonable value of his medical bills totaling over $600,000. Alternatively, defense’s billing expert opined approximately $175,000, based on an average of the private insurers, Medicare, and workers’ compensation would agree to pay and medical providers would agree to receive for those services. The jury returned a verdict totaling over $500,000 in past medical expenses.

The trial court found that evidence of the plaintiff’s unpaid medical bills was relevant to his past medical damages to prove the paid or incurred prong, but only if he could show he actually incurred those amounts. Likewise, evidence of unpaid medical bills was relevant to prove or disprove the “reasonable value” prong of past damages if it could be shown the bill was incurred. The trial and appellate court relied on Howell v. Hamilton Meats & Provisions, Inc. with regard to limiting an award of past medical expenses to the lesser of (1) the amount paid or incurred and (2) the reasonable value of the services rendered.

  1. (Landowner Liability) Landowner owe no duty to independent contractors or its workers to remedy or adopt other measures to protect them against known hazards on premises. Luis Gonzales v. John R. Mathis (No. S247677, Case Fully Briefed Nov. 18, 2018, Oral Argument Jun. 1, 2021, Filed Aug. 19, 2021)

The California Supreme Court granted review to decide whether a landowner may also be liable for injuries to an independent contractor or its workers that result from a known hazard on the premises where there were no reasonable safety precautions it could have adopted to avoid or minimize the hazard. The California Supreme Court concluded that permitting liability under certain circumstances, thereby creating a broad exception to the Privette doctrine, would be fundamentally inconsistent with the doctrine.

The California Supreme Court pointed to a strong presumption under California law that a hirer of an independent contractor delegates the contractor all responsibility for workplace safety. See generally Privette v. Superior Court (1993) 5 Cal.4th 689 (Privette). This means that a hirer is typically not liable for injuries sustained by an independent contractor or its workers while on the job. This presumption stems from the following rationales: (1) the hirer should have no right to control independent contractor’s work; (2) contractors can factor in the cost of safety precautions and insurance coverage in the contract price; (3) contractors are able to obtain workers’ compensation to cover any on the job injuries; and (4) contractors are typically hired for their expertise, which enables them to perform the contracted for work safely and successfully.

There are two limited exceptions in which the presumption is overcome. First, in Hooker v. Department of Transportation (2002) 27 Cal. 4th 198, the California Supreme Court held at a hirer may be liable when it retains control over any part of the amended contractor’s work and negligently exercises that retained control in a manner that affirmatively contributes to the worker’s injury. Second, in Kinsman v. Unocal Corp. (2005) 37 Cal. 4th 659, the court held that a landowner who hires an independent contractor may be liable if the landowner knew, or should have known, of concealed hazard on the property that the contractor did not know of and could not have reasonably discovered, and the landowner failed to warn the contractor of the hazard.

When the landowner hires an independent contractor to perform a task on the landowner’s property, the landowner presumptively delegates to the contractor a duty to ensure the safety of its workers. This encompasses a duty to determine whether the work can be performed safely despite the known hazard on the worksite. That is between the landowner and the independent contractor, the law assumes that the independent contractor typically better position to determine whether and how open an obvious safety hazards on the worksite might be addressed in performing the work. California case law makes clear that, where the hirer has affectively delegated its duties, there is no affirmed obligation of the hirer’s part to independently assess workplace safety. Thus, unless a landowner retains control over any part of the contractor’s work and negligently exercises that retained control in the manner that affirmatively contributes to the injury, it will not be liable to an independent contractor or its workers for any injuries resulting from a known hazard on the premises.

  1. (Anti-SLAPP) Anti-SLAPP motion may not be directed to affirmative defense. Morris Cerullo World Evangelism v. Newport Harbor Offices & Marina, LLC (No. G058836 Super. Ct. No. 30-2019-01056982 California Courts of Appeal Fourth Appellate District Division Three Filed August 18, 2021)

Plaintiff appealed from an order denying its special motion to strike, make pursuant to Code of Civil Procedure section 425.16, which was directed to three affirmative defenses for setoff pleaded by the defendant in its answer to the cross-complaint. The appeal presented two issues: (1) may a special motion to strike under section 425.16, subdivision (b) be directed to an affirmative defense pleaded in an answer and (2) does an affirmative defense for setoff constitute a cause of action or claim for relief subject to an anti-SLAPP motion to strike.

The answer to the first question presented is no-an anti-SLAPP motion may not be directed to an affirmative defense. The reason appears on the face of the statute: only a “cause of action” asserted by a plaintiff, cross-complainant, or petitioner may be the subject of an anti-SLAPP motion. A cause of action seeks relief. An affirmative defense cannot seek relief and is not asserted by a plaintiff, a cross-complainant, or a petitioner. The answer to the second question was also no-an affirmative defense setoff cannot constitute a cause of action or claim for relief subject to an anti-SLAPP motion. Setoff, as an affirmative defense, cannot give rise to affirmative relief. California Supreme Court authority holds that the affirmative defense of setoff may only be used defensively and does not permit recovery of the damages sought to be set off against the opposing party’s recovery.

  1. (Superseding Cause) Because jury found that treatment facility was negligent and its negligence was a cause of patient’s suicide, court did not err in not instructing jury on superseding cause defense. Barbara Green v. Healthcare Services, Inc. (No G057950 Super Ct. No. 30-2017-00958866 California Courts of Appeal Fourth Appellate District Division Three Filed August 31, 2021)

Plaintiff filed a wrongful death action after her son, a patient at defendant’s nonmedical, residential detoxification and treatment facility, jumped from the roof of the facility and ended his life. At trial, the jury found the defendant negligent and its negligence a substantial factor in causing harm to the plaintiff. The court declined to instruct the jury that the patient’s suicide was a superseding cause, concluding the defense did not apply because the defendant was the cause of the plaintiff’s harm. The jury allocated 65 percent fault to the defendant and 35 percent to the plaintiff. The defendant moved for a new trial, which the trial court denied. The defendant asserted on appeal that the trial court failed to instruct the jury on the superseding cause defense.

The appeals court affirmed the trial court’s ruling. It noted independent intervening acts are superseding causes relieving actors of liability for their negligence only if the intervening acts are highly usual or extraordinary and hence not reasonably foreseeable. Reasonable foreseeability in the context in this matter was a question for the trier of fact. If the jury had agreed with the defendant that the patient’s suicide was not foreseeable, it would have found that the defendant was not negligent or that its negligence was not a cause of the suicide. Since plaintiff’s theory of negligence was necessarily predicted on defendant’s failure to take adequate precautions to prevent the patient’s foreseeable suicide, that suicide as a matter of law could not be a superseding cause.

Should you have any questions concerning these court decisions or desire a copy of any of them, please do not hesitate to contact our office.