California Law Update – June/July 2016

June and July 2016 brought several legal developments to issues involving: Assumption of the Risk, Defamation, Health Plan Liability, Medical Board Discipline, Attorney Client Privilege and Premises Liability.

At least two of the reported cases are worthy of special mention. As well, we also reference below a new California law scheduled to take effect on January 1, 2017 which should serve to limit recovery of medical expenses by a surviving spouse paid by Medi-Cal (Senate Bill 833) in a wrongful death case.

In Hassell v. Bird, the California Court of Appeal (First Appellate District) ordered Yelp to take down certain defamatory statements posted on Yelp.com despite Yelp not being a party to the lawsuit.

In Hassell, defendant expressed her dissatisfaction with plaintiff’s legal services by posting negative reviews about plaintiff on Yelp.com. Plaintiff sued defendant for defamation and eventually obtained a default judgment against defendant after defendant failed to answer the complaint against her. The judgment held defendant liable for defamation and included an order that defendant remove the defamatory reviews from Yelp. The specific statements defendant was required to take down were listed in an exhibit attached the judgment. Defendant did not appeal the judgment. The judgment also contained an order requiring Yelp to remove defendant’s reviews.

Defendant did not remove her posts despite the court’s order.

Yelp moved to vacate the entire judgment. The trial court denied Yelp’s motion and Yelp appealed. The California Court of Appeal found that Yelp could be made to comply with the removal order even though it was not a party to the lawsuit.

The Court of Appeal focused on two factors. First, a court can issue injunctions preventing the repetition of proven defamation. Second, the Court of Appeals pointed to the long-standing ability for courts “to fashion an injunctive decree so that the enjoined party” such as defendant in this case, “may not nullify it by carrying out the prohibited acts with or through a nonparty” such as Yelp. Because defendant had used and could continue to use Yelp to publish or draw attention to already-published defamatory statements, the trial court had the authority to order Yelp to take down proven defamation.

In City of Petaluma v. Superior Court (Waters), the California Court of Appeal (First Appellate District) reversed a trial court’s ruling which held that pre-litigation factual investigation performed by outside counsel was not protected by the attorney client privilege. The appeals court, relying on the California Supreme Court’s decision in Costco Wholesale Corp. v. Superior Court (2009) 47 Cal. 4^th 725, held that the report was privileged since the dominant purpose of the outside counsel’s legal services was in anticipation of litigation. Interestingly, the agreement between the City of Petaluma (“City”) and the outside counsel stated that she would not provide legal advice. Notwithstanding, the court found that the attorney was retained to act as an attorney and apply her legal expertise and skills to assist the City in responding to an Equal Employment Opportunity Commission charge. The court’s ruling also supported the application of the work product doctrine.

On the legislative front, Governor Brown recently signed SB 833 (Welfare & Institutions Code section 14009.5 as amended) which includes major changes to the Medi-Cal Recovery program, including a provision that will limit recovery of Medi-Cal payments by the State of California against the estate of the decedent when there is a surviving spouse. Recovery will be limited to only what is required by federal law, i.e., for those 55+ years of age, nursing home facility and long term care services or any age if the person was “permanently institutionalized.”

This law will take effect on January 1, 2017. While enabling more Medi-Cal recipients to leave an inheritance to their children/families without having to pay back the state on their death, this change should also limit the recoverability of medical expenses to a surviving spouse as economic damages when paid by Medi-Cal.

 

• (Arbitration) Trial court errs in compelling parties to arbitrate certain tort claims that did not arise from the parties’ operation agreement. Rice v. Downs. (No. B264964, Los Angeles County Super. Ct. No. BC507050, California Courts of Appeal, Second Appellate District, Division One, June 1, 2016).
• (Assumption of Risk) Summary judgment properly granted in defendant’s favor where wrongful death suit barred by doctrine of primary assumption of risk. Bertsch v. Mammoth Community Water District. (No. C076872, Super Ct. Number CV120094, California Courts of Appeal, Third Appellate District, Mono, June 1, 2016).
• (Online Reviews) Erroneous evidentiary ruling that resulted in disposition of defamation claim warrants reversal of verdict in favor of landlord accused of posting negative Yelp reviews about tenant. Kinda v. Carpenter. (No. H040316, Santa Cruz County Super. Ct. No. CV171252, California Courts of Appeal, Sixth Appellate District, June 6, 2016).
• (Online Reviews) Yelp, a nonparty defendant suit, must abide by injunction ordering removal of defamatory reviews penned by aggrieved client against former attorney. Hassell v. Bird. (No. A143233, San Francisco City & County Super. Ct. No. CGC-13-530525, California Court of Appeal, First Appellate District, Division Four, June 7, 2016).
• (Land Owner Liability) Location of church’s overflow lot, not location of injury, is dispositive in determining whether church may be held liable in tort for churchgoer’s injuries. Vasilenko v. Grace Family Church. (No. C074801, Super. Ct. No. 34-2011-00097580, California Courts of Appeal, Third Appellate District, Sacramento, June 17, 2016).
• (Medical Arbitration) California Code of Civil Procedure requirement for 30-day rescission period for medical arbitration contracts preempted by Federal Arbitration Act. Scott v. Yoho. (No. B265641, Los Angeles County Super. Ct. No. BC556129, California Courts of Appeal, Second Appellate District, Division Five, June 22, 2016).
• (Conservatorship) Conservatorship over man who was strongly aware of his mental health issues overturned where friend’s commitment could help him survive safely without involuntary detention. Public Guardian of Mendocino County v. Jesse G. (No. A145749, Mendocino County Super. Ct. No. SCUKLPSQ15-1789, California Courts of Appeal, First Appellate District, Division Two, June 23, 2016).
• (Health Plan Liability) Health plan and service provider are not liable for one another’s acts and omissions under enterprise theory of liability. Gopal v. Kaiser Foundation etc. Plan. (No. B259808, Los Angeles County Super. Ct. No. VC059950, California Courts of Appeal, Second Appellate District, Division One, June 23, 2016).
• (Defamation) Candidate who lost election cannot maintain defamation action against rival who ran negative television ad characterizing him as an ‘unscrupulous lawyer’. Reed v. Gallagher. (No. C079432, Super. Ct. No. 163486, California Courts of Appeal, Third Appellate District, Butte, June 29, 2016).
• (Attorney Investigation – Privileged) Investigatory harassment report written for city by hired attorney is privileged despite attorney not providing legal counsel after report’s completion. The City of Petaluma v. The Superior Court of Sonoma County. (No. A145437, Sonoma County Super. Ct. No. SCV 256309, California Courts of Appeal, First Appellate District, Division Three, June 30, 2016)
• (Statute of Limitations – Prisoners) Judgment in favor of defendant hospital that treated prisoner reversed where court fails to apply special tolling provision relating to prisoners. Brooks v. Mercy Hospital. (No. F071884, Super. Ct. No. CV-283100, California Courts of Appeal, Fifth Appellate District, July 1, 2016).
• (Psychotherapist – Patient Privilege) Psychiatrist properly invoked psychotherapist-patient privilege in wake of subpoena seeking patient’s treatment records, resulting in writ of mandate to vacate order compelling disclosure. Gerner v. Superior Court (Department of Consumer Affairs. (No. B268621, Los Angeles County Super. Ct. No. BS157033, California Courts of Appeal, Second Appellate District, Division One, July 8, 2016).
• (Arbitration – Governing Law) Hastily-signed contract with arbitration clause requiring California signatories to participate in proceedings in Indiana ruled unconscionable. Mango et al. v. The College Network, Inc. (No. D067687, Super Ct. No. 37-2014-00003057 CU-FR-CTL, California Courts of Appeal, Fourth Appellate District, Division One, July 8, 2016).
• (Res Judicata) Second complaint filed in superior court for same cause of action previously filed in federal court appropriately barred by doctrine of res judicata. Franceschi v. Franchise Tax Board. (No. B267719, Los Angeles County Super. Ct. No. BS154331, California Courts of Appeal, Division One, July 8, 2016).
• (Medical Board) Medical board commanded to set aside order revoking license of physician who misrepresented his employment status while collecting disability benefits because punishment is excessive. Pirouzian v. Superior Court (Medical Board of California. (No. B266015, Los Angeles County Super. Ct. No. BS148788, California Court of Appeal, Second Appellate District, Division One, July 11, 2016).
• (Premises Liability – Criminal Act) Dance club owner unsuccessful in challenge to overturn negligence finding and damages award following rape and assault in its restroom. Janice H. v. 696 North Robertson, LLC. (No. B256913, Los Angeles County Super. Ct. No. SC111853, California Appellate District, Division Three, July 14, 2016).

The above referenced matters have come to our attention during the last two months. We thought you might be interested in a brief summary of these matters. Please let us know if you would like to receive a copy of any of these recently reported court decisions.

1. (Arbitration) Trial court errs in compelling parties to arbitrate certain tort claims that did not arise from the parties’ operation agreement. Rice v. Downs. (No. B264964, Los Angeles County Super. Ct. No. BC507050, California Courts of Appeal, Second Appellate District, Division One, June 1, 2016).

Plaintiff sued its attorney for legal malpractice, breach fiduciary duty, and breach of written agreement. The trial court ordered the plaintiff to arbitrate all of the claims pursuant to an arbitration provision in a written agreement between the plaintiff and defendant attorney. After arbitration, both plaintiff and defendant appealed raising various contentions, including plaintiff’s contention that the arbitration provision did not encompass his tort claims.

The appeals court held that the trial erred by compelling arbitration of those tort claims. The appeals court concluded that while the arbitration provision encompassed contractual terms, and maybe even the tort claims that arose from the agreement, the tort claims that were based upon violation of an independent duty will right a rising outside of the agreement (such as a breach of fiduciary duty) did not arise from the agreement and, therefore, fell outside the scope of the arbitration provision. Accordingly, the appeals court found that the trial court erred in compelling arbitration of the plaintiff’s legal malpractice claim as well as the related breach of fiduciary and rescission claims.

2. (Assumption of Risk) Summary judgment properly granted in defendant’s favor where wrongful death suit barred by doctrine of primary assumption of risk. Bertsch v. Mammoth Community Water District. (No. C076872, Super Ct. Number CV120094, California Courts of Appeal, Third Appellate District, Mono, June 1, 2016).

Plaintiff family members brought a wrongful death action related to the loss of the decedent secondary to a skateboarding accident. The decedent was traveling downhill at a “pretty fast” speed when the front wheels of his skateboard hit a small gap between the paved road and a cement collar surrounding a manhole cover, stopping the wheels and ejecting the decedent from the board. The impact of the decedent’s skull with the pavement resulted in a traumatic brain injury and ultimately death. The plaintiffs brought a wrongful death action against various defendants responsible for inspecting and maintaining the manhole cover as well as the owner of the road where the accident occurred. The trial court granted summary judgment in favor of the defendants, concluding the doctrine of primary assumption of risk barred plaintiff’s lawsuit as a matter of law. The plaintiffs appealed. The appeals court concluded that the summary judgment motions were properly granted and affirmed the judgment.

The appeals court found that the decedent’s activity was subject to the doctrine of primary assumption of the risk. Moreover, the defendants owned no duty to use due care not to increase of skateboarding because there was no organized relationship between the defendants and the decedent regarding the skateboarding activity.

3. (Online Reviews) Erroneous evidentiary ruling that resulted in disposition of defamation claim warrants reversal of verdict in favor of landlord accused of posting negative Yelp reviews about tenant. Kinda v. Carpenter. (No. H040316, Santa Cruz County Super. Ct. No. CV171252, California Courts of Appeal, Sixth Appellate District, June 6, 2016).

Plaintiffs, commercial tenants sought a temporary restraining order and preliminary injunction against their landlord defendant. Plaintiffs alleged several contract related causes of action based on their lease. After plaintiffs obtained a temporary restraining order, three consumer reviews criticized the plaintiffs on the internet site “Yelp.com” (Yelp) posted from different online aliases. Plaintiffs suspect the defendant was responsible for the reviews and they amended the complaint to allege defamation. Plaintiffs also obtained via subpoena information purporting to identify the internet subscriber accounts linked to the Yelp reviews.

The defendant moved in limine to exclude the evidence related to the Yelp reviews as hearsay and on authenticity grounds. The trial court granted defendant’s motion and later granted a directed verdict for defendant on the defamation cause of action. A jury returned a unanimous defense verdict on the contract causes of action, which included the special verdict that although the defendant had reached the lease agreement, no damages resulted. The trial court deemed defendant the prevailing party and granted his request for attorney’s fees.

The plaintiffs appealed contending that the trial court erred in excluding the Yelp evidence and eliminating their defamation cause of action. Plaintiffs also contended that had the Yelp evidence been admitted, they would have established presumed damages, which would have altered both the jury’s special verdict on the contract based causes of action and the court’s prevailing party determination for the attorney’s fees award.

The appeals court found that the exclusion of the Yelp evidence and the resulting disposition of the defamation cause of action was error.

The appeals court found that the trial court did not apply the restrictive standard of a nonsuit when it granted defendant’s motion in limine to dispose of the defamation cause of action. The restrictive standard of a nonsuit involves interpretation of the evidence most favorably by plaintiffs’ case by resolving all presumptions, inferences, and doubts in plaintiffs’ favor. Here, plaintiffs linked the defendant to the negative Yelp reviews, which the defendant did not dispute. Though the issue presented to the trial court was the authenticity of the proffered records, the issue it ultimately decided was sufficiency of the evidence implicating the defendant. The court ignored the positive inferences that should have been inferred to plaintiff and resolve doubts in favor of the defendant. In so doing, it failed to apply the proper standard. Consequently, the directed verdict on the defamation cause of action was improper given that the publication element of defamation may be proven with indirect evidence such as those the plaintiff proffered.

4. (Online Reviews) Yelp, a nonparty defendant suit, must abide by injunction ordering removal of defamatory reviews penned by aggrieved client against former attorney. Hassell v. Bird. (No. A143233, San Francisco City & County Super. Ct. No. CGC-13-530525, California Court of Appeal, First Appellate District, Division Four, June 7, 2016).

Plaintiff obtained a judgment holding defendant liable for defamation in requiring her to remove defamatory reviews she posted on Yelp.com (Yelp). The judgment also contained an order requiring Yelp to remove the defendant’s defamatory reviews from its website (the removal order). Yelp was not a party in the defamation action, and filed a motion to vacate a judgment which the trial court denied.

On appeal, the parties raised numerous issues related to the judgment against the defendant and the subsequent removal order. As to those issues, the appeals court concluded that (1) Yelp was not “aggrieved” by the defamation judgment entered against the defendant, but it is “aggrieved” by the removal order; (2) Yelp’s trial court motion to vacate was not cognizable under Code of Civil Procedure section 663; (3) Yelp has standing to challenge the validity of the removal order as an “aggrieved party,” having brought a nonstatutory motion to vacate that order; (4) Yelp’s due process rights were not violated because of its lack of prior notice and a hearing on the removal order request; (5) the removal order did not violate Yelp’s First Amendment rights to the extent that it required Yelp to remove defendant’s defamatory reviews; (6) to the extent it purports to cover statements other than defendant’s defamatory reviews, the removal order is an overbroad unconstitutional prior restraint on speech; and (7) Yelp’s immunity from suit under the Communications Decency Act of 1996 (the CDA) does not extend to the removal order.

Therefore, the appeals court, although affirming the order denying Yelp’s motion to vacate the judgment, did remand the case so that the trial court could narrow the terms of the removal order in a manner consistent with the decision. The appeals court noted that the trial court could properly enforce an injunctive order against Yelp (to remove information from the website) even if it was not a party to the underlying litigation. The constitutional bar against prior restraint of speech, does not apply to an order issued after a trial prohibiting the defendant from repeating specific statements found at trial to be defamatory. Here, the trial court determined that the defendant had defamed the plaintiff and so prohibiting Yelp from repeating the defamatory statements did not constitute prior restraint.

5. (Land Owner Liability) Location of church’s overflow lot, not location of injury, is dispositive in determining whether church may be held liable in tort for churchgoer’s injuries. Vasilenko v. Grace Family Church. (No. C074801, Super. Ct. No. 34-2011-00097580, California Courts of Appeal, Third Appellate District, Sacramento, June 17, 2016).

Plaintiff was hit by a car while crossing a street. At the time, he was crossing a busy five-lane road on his way from an overflow parking lot controlled and staffed by a church to a function at the church. Plaintiff and his wife sued the church and others for, among other causes of action, negligence and loss of consortium, alleging that the church acted negligently in locating its overflow parking lot in a place that required invitees like the plaintiff to cross a busy street where they might be hit by a car and by failing to protect him from that risk. The trial court granted the defendants motion for summary judgment on the grounds the church owed no duty to the plaintiff because it did not own, possess, or control the public street where the plaintiff was injured. The plaintiff appealed from the judgment of dismissal entered in the church’s favor following the grant of its motion for summary judgment, contending that the location of his injury was not dispositive, and that the church failed to satisfy its burden of negating the general duty of ordinary care set forth in Civil Code section 1714.

The appeals court concluded that the location of the overflow lot, which required defendants’ invitees who parked there to cross a busy thoroughfare in an area that lacked a marked crosswalk or traffic signal in order to reach the church, exposed those invitees to an unreasonable risk of injury offsite, thus giving rise to a duty on the part of defendant church. Accordingly, the appeals court reversed the trial court’s order.

6. (Medical Arbitration) California Code of Civil Procedure requirement for 30-day rescission period for medical arbitration contracts preempted by Federal Arbitration Act. Scott v. Yoho. (No. B265641, Los Angeles County Super. Ct. No. BC556129, California Courts of Appeal, Second Appellate District, Division Five, June 22, 2016).

Defendant physician appealed from an order denying its motion to compel arbitration. Defendants sought to enforce three arbitration agreements signed by the decedent against the plaintiffs who are her relatives. The defendant argued that the three arbitration agreements are enforceable under the Federal Arbitration Act. The appeals court concluded that the three arbitration agreements are subject to limited preemptive effect of the Federal Arbitration Act; the 30-day rescission right in Code of Civil Procedure section 1295, subdivision (c) is preempted by the Federal Arbitration Act; and thus the motions to compel arbitration should have been granted. The appeals court reversed the order of the trial court denying the motions to compel arbitration.

Plaintiffs had argued that because the patient was not alerted to her right of a 30-day rescission period, the arbitration agreements were unenforceable under California Code of Civil Procedure section 1295, subdivision (c) which established the 30-day rescission period for contracts for medical services which contain provisions for arbitration.

The appellate court found that the subject provision was preempted by the Federal Arbitration Act making the arbitration acts in this case enforceable.

7. (Conservatorship) Conservatorship over man who was strongly aware of his mental health issues overturned where friend’s commitment could help him survive safely without involuntary detention. Public Guardian of Mendocino County v. Jesse G. (No. A145749, Mendocino County Super. Ct. No. SCUKLPSQ15-1789, California Courts of Appeal, First Appellate District, Division Two, June 23, 2016).

The appellant appealed from a trial court’s order appointing a conservator over his person and estate pursuant to Welfare & Institutions Code section 5350 of the Lanterman-Petris-Short Act (LPS Act).

The appellant contended that there was substantial evidence which did not support the court’s finding that he was gravely disabled under the LPS Act, or its imposition of the special disability denying him the right to refuse treatment related to his grave disability. The appeals court agreed and reversed the order appointing a conservator.

“Gravely disabled” is defined as a condition in which a person as a result of a mental health disorder, is unable to provide for his or her basic personal needs for food, clothing, or shelter. A person is not gravely disabled if that person can survive safely without involuntary detention with the help of responsible family, friends, or others who are both willing and able to help provide for the person’s basic needs.

In this case, the appellant’s friend was willing to make a commitment to ensure that the appellant complied with his medication’s treatment and that others would enable the appellant to “survive safely” pursuant to the LPS Act provisions. Moreover, despite the appellant’s recent Welfare & Institutions Code section 5150 hospitalization (involuntary hold), the only evidence regarding suicide threats was the appellant’s own testimony that he was not going to do so. The appeals court found that there was insufficient evidence to support the trial court’s finding of a grave disability warranting a reversal of the conservatorship.

8. (Health Plan Liability) Health plan and service provider are not liable for one another’s acts and omissions under enterprise theory of liability. Gopal v. Kaiser Foundation etc. Plan. (No. B259808, Los Angeles County Super. Ct. No. VC059950, California Courts of Appeal, Second Appellate District, Division One, June 23, 2016).

In this wrongful death action, the decedent was admitted to the emergency room at defendant’s hospital and died after she was transferred to another hospital. She was not a member of the hospital’s health plan. The plaintiffs’ sued the hospital as well as the health plan alleging violation of California law in that the health plan treated the patient/decedent differently than they would have had the decedent been a health plan member and that the different treatment caused her death.

The appeals court only being concerned with the liability of the health plan reviewed whether the trial court’s granting of summary judgment on the health plan was in error.

On appeal, the plaintiffs challenged the trial courts/rejection of plaintiff’s enterprise theory of liability. Under the enterprise theory, the health plan, hospital and the medical group performed as a single enterprise and thus the health plan could be held liable for any breach of duty by the hospitals or the medical group.

The appeals court found that the trial court correctly rejected the enterprise theory of liability and the appeals court affirmed the summary judgment ruling.

The appeals court noted that one condition of the theory of enterprise liability is that inequity results of the acts or omissions are treated as those of one component of the enterprise alone. Here, there was nothing inequitable in requiring the plaintiffs to look to the hospitals for compensation for their claims. The appellants were not without recourse or remedy. The fact that the providers were subject to MICRA damage caps was not an inequitable result, but a public policy determination made by the legislature.

9. (Defamation) Candidate who lost election cannot maintain defamation action against rival who ran negative television ad characterizing him as an ‘unscrupulous lawyer’. Reed v. Gallagher. (No. C079432, Super. Ct. No. 163486, California Courts of Appeal, Third Appellate District, Butte, June 29, 2016).

Plaintiff appealed from a judgment entered in favor of defendants after the trial court granted the defendant’s special motion to strike pursuant to California Code of Civil Procedure section 425.16, the anti-SLAPP statute. Plaintiff and defendant were rival candidates for the California Assembly. During the final weeks of the campaign, the defendant ran a 30 second television ad characterizing the plaintiff as an “unscrupulous lawyer.” After losing the election, plaintiff sued the defendant for defamation based on the statements made in the ad. Defendant responded with a demurrer and special motions strike under section 425.16. The trial court sustained the demurrer and granted the special motion to strike finding. The trial court found that with respect to the latter motion, the alleged defamatory statements arose from protected activity and plaintiff failed to demonstrate a probability of prevailing on its claim. The appeals court affirmed the trial court’s ruling.

The appeals court noted that to state of defamation claim that survives the first amendment challenge, party must present evidence of a statement of fact that is “provably false.” Here, the plaintiff conceded that the anti-SLAPP statute ordinarily applied to statements made during the course of a political campaign, and nevertheless argued that the defendant’s conduct was illegal as a matter of law because it violated Penal Code section 115.2. However, the assertion was rejected because defendant neither had the requisite mental state (actual knowledge and intent to deceive) as required under the statute. Moreover, the disputed statement “legal records show that [plaintiff] is an unscrupulous lawyer,” neither declared nor implied a provably false statement of fact and was, therefore, not defamatory.

10. (Attorney Investigation – Privileged) Investigatory harassment report written for city by hired attorney is privileged despite attorney not providing legal counsel after report’s completion. The City of Petaluma v. The Superior Court of Sonoma County. (No. A145437, Sonoma County Super. Ct. No. SCV 256309, California Courts of Appeal, First Appellate District, Division Three, June 30, 2016)

Plaintiff, a former city firefighter had filed a charge with the Equal Employment Opportunity Commission (EEOC) against the city alleging sexual harassment and retaliation. The city hired outside counsel to conduct an impartial and confidential factual investigation and to report its findings and conclusions to facilitate the rendering of legal services and advice by the city attorney to the city. The trial court held that the attorney-client privilege did not protect the confidential communications between the outside counsel and the city during the course of the attorney-client relationship because the attorney did not give legal advice despite recognizing that the attorney’s services involved professional evaluation and interpretation of law and fact. The Court of Appeal reversed the trial court’s ruling and found that the city’s pre-litigation factual investigation performed by outside counsel was protected by the attorney-client privilege when the dominant purpose of its investigation was to provide legal services to the city in anticipation of litigation. Significantly, the court found that counsel was not required to give legal advice as to what course of action to pursue in order for the attorney-client privilege to apply. The appeals court relied on the California Supreme Court’s decision in Costco Wholesale Corp. v. Superior Court 47 Cal. 4^th 725, 739-40 (209), wherein the court identified the “dominant purpose of the relationship” between the attorney and the client and not on the purpose served by a particular communication as the test to trigger the attorney client privilege. If the dominant purpose is to render legal services or advice, the privilege applies. Even though the attorney’s engagement agreement with the city expressly stated that it would not provide legal advice, the attorney was retained to act as an attorney and apply her legal expertise and skills to assist the city in responding to the employee’s EEOC charge and anticipated lawsuit. The court’s analysis also supported the application of the Attorney Work-product Doctrine to the attorney’s investigation.

11. (Statute of Limitations – Prisoners) Judgment in favor of defendant hospital that treated prisoner reversed where court fails to apply special tolling provision relating to prisoners. Brooks v. Mercy Hospital. (No. F071884, Super Ct. No. CV-283100, California Courts of Appeal, Fifth Appellate District, July 1, 2016).

Plaintiff appealed from a judgment dismissal entered in favor of defendant hospital that the trial court sustained defendant’s demurrer to the plaintiff’s complaint on statute of limitations grounds. Plaintiff argued the trial court erred because it failed to apply the tolling provisions set forth at Code of Civil Procedure section 352.1 which grants a two-year tolling of the statute of limitations to persons who are imprisoned “for a term less than for life.” Plaintiff contended that under the longstanding judicial construction of this provision, the phrase “for a term less than for life” includes a life sentence where there is a possibility of parole. The appeals court concluded that section 352.1 tolling should have been applied to plaintiff, which means the trial court erred in concluding that the statute of limitations expired. Accordingly, the appeals court reversed the judgment appealed from, with instructions that the court enter a new order overruling defendant’s demurrer to the plaintiff’s complaint.

12. (Psychotherapist – Patient Privilege) Psychiatrist properly invoked psychotherapist-patient privilege in wake of subpoena seeking patient’s treatment records, resulting in writ of mandate to vacate order compelling disclosure. Gerner v. Superior Court (Department of Consumer Affairs. (No. B268621, Los Angeles County Super. Ct. No. BS157033, California Courts of Appeal, Second Appellate District, Division One, July 8, 2016).

Petitioner sought review of its compliance with an investigational administrative subpoena of the Department of Consumer Affairs, acting on behalf of the Medical Board of California (the Board), seeking patient records. The patient had made a complaint against the petitioner, but then withdrew the complaint and directed the petitioner not to disclose his treatment records, which include medical histories, treatment notes, lab data, and communications with the patient.

The court issued a stay and an order requiring the court to show cause why it should not be ordered to vacate and reverse its order compelling compliance with the Board’s subpoena. Granting the petition, the appeals court held that the Board failed to establish any exception to the patient’s invocation of the psychotherapist-patient privilege provided by Evidence Code section 1014, which precludes the subpoena enforcement.

Section 1014 provides that the confidential communications between a psychotherapist and patient are privileged from a disclosure, absent a valid waiver or exception.

13. (Arbitration – Governing Law) Hastily-signed contract with arbitration clause requiring California signatories to participate in proceedings in Indiana ruled unconscionable. Mango et al. v. The College Network, Inc. (No. D067687, Super Ct. No. 37-2014-00003057 CU-FR-CTL, California Courts of Appeal, Fourth Appellate District, Division One, July 8, 2016).

Defendant appealed from an order denying its motion to compel arbitration of a consumer fraud and breach of contract action brought by the plaintiffs. The defendant argued the arbitration provision in the plaintiff’s purchase agreement was valid and enforceable and contended the trial court erred when it ruled the provision unconscionable. Alternative, the defendant argued that if the forum selection clause was unconscionable, the court abused its discretion in voiding the arbitration provision altogether rather than severing the objectionable provisions and enforcing the remainder.

The appeals court concluded that the trial court correctly determined the arbitration provision to be procedurally and substantially unconscionable and did not abuse its discretion in voiding it in its entirety. The facts of this case involved three licensed vocational nurses who resided in San Diego County. In 2012, a sales representative of the defendant visited them at their homes encouraging them to enroll in a long distance program through Indiana State University. The program would allow them to obtain a bachelor’s of science in nursing online and to receive clinical training at California State University. Urged to purchase immediately, they enrolled, signing contracts which had small print clauses on the back establishing that any disputes would be adjudicated through arbitration in Indiana. The salesman did not explicitly mention the clause, nor did they make the women initial next to the clause. When the three women found that they were not eligible for admission at Indiana State University, they sued the defendant.

In affirming the trial court’s denial of the motion to compel arbitration, the appeals court noted that because the women were rushed, told to sign the contract without having time to read it in detail, had no power to negotiate, and struggled to understand the legal terms within, the court found that the circumstances passed the procedural element for unconscionability. Moreover, the contract required the young, college-aged students to participate in arbitration proceedings in Indiana, unreasonably favoring the defendant. Although they could participate by phone or video, they would forego the ability to testify in person, which the defendant participated in proceeding in its “own backyard,” meeting the substantive element of unconscionability.

14. (Res Judicata) Second complaint filed in superior court for same cause of action previously filed in federal court appropriately barred by doctrine of res judicata. Franceschi v. Franchise Tax Board. (No. B267719, Los Angeles County Super. Ct. No. BS154331, California Courts of Appeal, Division One, July 8, 2016).

Plaintiff, in pro per, petitioned the Superior Court for a writ directing that members of the California Franchise Tax Board (Board) stop publishing his name on the Board’s list of the state’s “Top 500” income tax debtors. In his petition, plaintiff argued that the publication of his name on the list violates his right of privacy. The Board members demurred to the petition arguing in the main that plaintiff did not state a legally viable cause of action because publication of his name on the list did not violate his right of privacy and even if he could state a viable privacy claim, the doctrine of res judicata barred his petition as plaintiff had previously sought redress in federal court for having his name placed on the list, but the district court dismissed the action with prejudice for failure to state a claim.

The trial court agreed on both grounds and sustained the demurrer. As plaintiff did not seek leave to amend his petition, the trial court dismissed the action with prejudice. In addition, because it found the action to be “frivolous and groundless” the trial court sanctioned the plaintiff in the amount of five thousand dollars.

On appeal, the plaintiff challenged both the dismissal of his petition and the sanctions. The appeals court help the petition was barred by the doctrine of res judicata. As that issue was determinative, they did not need to reach the issue of whether or not the plaintiff’s petition stated a claim for violation of privacy rights.

15. (Medical Board) Medical board commanded to set aside order revoking license of physician who misrepresented his employment status while collecting disability benefits because punishment is excessive. Pirouzian v. Superior Court (Medical Board of California. (No. B266015, Los Angeles County Super. Ct. No. BS148788, California Court of Appeal, Second Appellate District, Division One, July 11, 2016).

The Medical Board of California revoked the petitioner’s medical license. The petitioner filed a petition in the Superior Court for a writ of administrative mandamus to set aside the Board’s decision which the trial court denied.

The petitioner then filed a petition for writ of mandate with the appeals court.

The appeals court requested opposition and notified the parties of its intention to issue a peremptory writ. The appeals court thereafter granted the petition.

By way of background, the petitioner, a pediatric ophthalmologist, took leave of absence from his job due to depression and received disability insurances benefits. For practically three months, he made several affirmative misrepresentations regarding his employment status. Specifically, he failed to tell a psychiatrist and the employer that he had accepted a new job. He lied to his insurance carrier by telling it he was out of the country and collected insurances benefits even though he was working at a new job. He made similar misrepresentations to the California Employment Development Department. The petitioner pled guilty to a misdemeanor count of willfully delaying a public officer in the discharge of his official duties. The Medical Board of California revoked the petitioner’s medical license.

The appeals court noted that the Medical Board’s discretion in determining the discipline to impose unprofessional conduct “is subject to the Legislative mandate” and that the Board’s highest priority is protection of the public; and, secondarily, discipline should “aid in the rehabilitation of the licensee… Punishment is not a goal.”

The Medical Board’s revocation of the petitioner’s license, the maximum discipline possible was inconsistent with its priorities because it was not necessary to protect the public and did nothing to help make the petitioner a better physician. The discipline was found to be excessive; as such it was an abuse of discretion. Thus, the petition was granted.

16. (Premises Liability – Criminal Act) Dance club owner unsuccessful in challenge to overturn negligence finding and damages award following rape and assault in its restroom. Janice H. v. 696 North Robertson, LLC. (No. B256913, Los Angeles County Super. Ct. No. SC111853, California Appellate District, Division Three, July 14, 2016).

Defendant owned and operated a successful bar and dance club. It appealed from a judgment based on a jury’s award of over five million dollars in compensatory damages to the plaintiff for failing to use reasonable care to protect her from a sexual assault in the unisex bathroom stall. The defendant asserted it did not owe or breach a duty to the plaintiff and did not cause plaintiff’s injury. The defendant argued that the court abused its discretion by erroneously admitting irrelevant and prejudicial evidence. The defendant also contended that the jury’s non-economic damages award were excessive and punitive in nature.

The appeals court affirmed on all grounds.

The appeals court found that the defendant owed a duty to the plaintiff, as a patron to use reasonable care and security in the restrooms because the risk of sexual assault was reasonably foreseeable and safety could have been ensured by undertaking minimally burdensome security measures, such as having a security guard posted. It breached that duty by failing to have a guard. It was reasonable to conclude that had a guard been there, the attack would not have occurred. The substantial evidence supported the negligence finding. Because the non-economic damages award did not “shock the conscience,” it was affirmed.

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DUMMIT, BUCHHOLZ & TRAPP