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California Law Update – September 2021

By September 30, 2021December 29th, 2021Law Updates
  1. (Expert Testimony) An expert’s declaration that purportedly contradicted his earlier deposition should have been considered on summary judgment because the declaration did not prejudice the opposing party. 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 September 2, 2021)
  2. (Privette Doctrine) A party who fully and effectively delegates work to a contractor owes no tort duty to that contractor’s workers. Jose M. Sandoval v. Qualcomm Incorporated (California Supreme Court, NO. S252796, Case Fully Briefed Sept. 4, 2019)
  3. (Offers to Compromise) Written offers that merely reference Code of Civil Procedure Section 998 without providing specific acceptance instructions are invalid. Kimberly Finlan v. Michael Chase (No. D078410 Super. Ct. No. 37-2014-00036134-CU-PO-NC California Courts of Appeal Fourth Appellate District Division One Filed September 15, 2021)
  4. (Cumis Counsel) Because plaintiffs failed to allege that an actual conflict of interest existed between them and their insurer-appointed counsel, plaintiffs were not entitled to independent counsel. Nede MGMT., Inc. v. Aspen American Insurance Company (No. B307470 Los Angeles County Super. Ct. No. 19STCV05442 California Courts of Appeal Second Appellate District Division Eight Filed September 20, 2021)
  5. (Expert Testimony) An expert witness’ opinion that relied on both inadmissible hearsay and general knowledge in the expert’s field was improperly disregarded. Jo Ann Strobel v. Johnson & Johnson (No. A159609 Solano County Super Ct. No FCS052548 California Courts of Appeal First Appellate District Division Four Filed September 21, 2021)
  6. (Government Claims Act) A claim submitted without plaintiff’s knowledge did not cause the statute of limitations period to run. Ashleigh Cavey v. Policarpio Tacas Tualla, Jr. (No. F080153 Super. Ct. No. 18CECG01104 California Courts of Appeal Fifth Appellate District Filed September 24, 2021)
  7. (Unruh Civil Right Act) A plaintiff must possess a bona fide intent to make use of a business’ services to prevail under the Unruh Civil Rights Act. (No. E074098 Super. Ct. No. CIVDS1620291 California Courts of Appeal Fourth Appellate District Division Two Filed September 23, 2021)
  8. (In-House Counsel) Regardless of attorney’s status as in-house counsel, oral agreements with employer for litigation bonuses are contingency agreements that must be in writing and signed by both counsel and employer. Craig Missakian v. Amusement Industry, Inc. (No. B296749 Los Angeles County Super. Ct. No. BC616089 California Courts of Appeal Second Appellate District Division Five Filed September 29, 2021)
  9. (Administrative Agencies) Under Code of Civil Procedure Section 1094.5, a trial court does not need to account for the original standard of proof when exercising its independent judgment in reviewing administrative decisions. Quinn Li v. The Superior Court (Medical Board of California) (No. C092584 Super. Ct. No. 34202080003396 California Courts of Appeal Third Appellate District Filed September 30, 2021)
  10. (Medi-Cal Lien) California Department of Health Care Services in entitled to recover the portion of Medi-Cal beneficiary’s settlement attributed to past medical care paid through the Medi-Cal programs. L.Q. v. California Hospital Medical Center (No. B305723 Los Angeles County Super. Ct. No. BC608973 California Courts of Appeal Second Appellate District Division Three Filed September 30, 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. (Expert Testimony) An expert’s declaration that purportedly contradicted his earlier deposition should have been considered on summary judgment because the declaration did not prejudice the opposing party. 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 September 2, 2021)

In this asbestos case, plaintiffs appealed from a trial court’s granting of summary judgment in favor defendant Engineering Company. The appeals court reversed concluding that the trial court erred in its evaluation of an expert declaration submitted by the plaintiffs in opposition to the defendant’s motion and that there were triable issues of fact as to whether the decedent’s work on a Naval ship exposed the decedent to asbestos.

At deposition, plaintiff’s expert testified that the decedent would not have been exposed if he was not present when the work was done. Thereafter, the defendant moved for summary judgment on the issue of exposure. Defendant argued its motion should be granted because plaintiff’s expert testified he did not see anyone working the boilers and that plaintiffs’ expert testified that he would not have been exposed to asbestos if he was not present when the work was done. In a responding declaration, plaintiff’s expert testified that the decedent could have been exposed through residual asbestos fibers in the air after the work was done. The defendant responded, arguing that the declaration had to be disregarded because it contradicted his deposition testimony.

The appeals court noted that although the trial court relied on a rule prohibiting an expert from contradicting his deposition at trial, this rule only applied if the opposing party had no notice of new testimony or would otherwise be prejudiced at trial. Such testimony is admissible unless a determination is made that admission would be prejudicial. Because the theory of residual fibers created a genuine issue of material fact, even if the fact-finder might ultimately find the theory insufficient at trial, it was therefore improper to grant the motion for summary judgment.

  1. (Privette Doctrine) A party who fully and effectively delegates work to a contractor owes no tort duty to that contractor’s workers. Jose M. Sandoval v. Qualcomm Incorporated (California Supreme Court, NO. S252796, Case Fully Briefed Sept. 4, 2019)

In this case, an electrical parts specialist sustained third degree burns to one third of the surface area of his body after he triggered an arc flash from a circuit he did not realize was “live” with flowing electricity. The contractor for whom the plaintiff had been working had removed the protective cover on that live circuit while work was underway. The jury concluded that the contractor acted negligently and was liable for the injuries. The California Supreme Court was asked to determine if further liability arises for the company that hired the contractor, owned the premises, and operated the electrical equipment. The court decided that the answer was no.

It found that strong public policy considerations readily acknowledged in past decisions support a straightforward presumption about the responsibilities of hirers and contractors for worker injuries in situations like this where a person or entity hiring an independent contractor ordinarily delegates to that independent contractor all responsibility for the safety of the contractor’s workers. This presumption is rooted in hirers’ reasons for employing contractors in the first place, a society’s need for clear rules about who’s responsible for avoiding harms to workers when contractors are hired. California law has generally avoided subjecting hirers to tort liability for those workers’ injuries. That presumption gives way to two recognized exceptions: where the hirer either withholds critical information regarding a concealed hazard or retains control of the contractor’s work and actually exercises that control in a way that affirmatively contributes to the worker’s injury. The parties disputed how this presumption of delegation and its two exceptions applied here. The appellate court affirmed the jury verdict finding the hirer liable under a retained control theory of liability.

The California Supreme Court ruled otherwise and concluded that the defendant, the hirer in this case, owed no tort duty to plaintiff at the time of the incident. Although the hirer performed the partial power-down process that preceded the contractor’s work and resulted in the presence of the live electrical circuit, the California Supreme Court concluded on the record that the hirer neither failed to sufficiently disclose that hazard, nor affirmatively contributed to the injury. Therefore, it concluded that the jury instructions used in this case CACI No. 1009B, does not adequately capture the elements of a claim. The California Supreme Court reversed the Court of Appeal and remanded the case to the appellate court to instruct the trial court to enter judgment notwithstanding the verdict on behalf of the hirer.

  1. (Offers to Compromise) Written offers that merely reference Code of Civil Procedure Section 998 without providing specific acceptance instructions are invalid. Kimberly Finlan v. Michael Chase (No. D078410 Super. Ct. No. 37-2014-00036134-CU-PO-NC California Courts of Appeal Fourth Appellate District Division One Filed September 15, 2021)

In this case, an appellate court considered whether a simple reference to Section 998 of the California Code of Civil Procedure concerning an offer to compromise satisfied the acceptance provision requirement. The appellate division concluded it did not, based on settled case law. It further determined that a valid acceptance provision required more than mere reference to a judgment; section 998 offers must provide some kind of instruction or indication as to how they can be accepted, utilizing a written acceptance that includes a signature from the offeree’s counsel or the unrepresented offeree. Accordingly, the section 998 offers in this case were not statutorily valid. Here, a reference to offeree allowing judgment to be entered in a letter proposing a settlement was not the same thing as providing instructions that offerees can follow if they wish to accept such an offer. There was no acceptance provisions in the letters identifying a purported section 998 offer and as a result, the court reversed parts of the trial court’s order that were predicated on the rejection of a valid Section 998 offer.

  1. (Cumis Counsel) Because plaintiffs failed to allege that an actual conflict of interest existed between them and their insurer-appointed counsel, plaintiffs were not entitled to independent counsel. Nede MGMT., Inc. v. Aspen American Insurance Company (No. B307470 Los Angeles County Super. Ct. No. 19STCV05442 California Courts of Appeal Second Appellate District Division Eight Filed September 20, 2021)

Plaintiff’s company controlled a property where a fire occurred, killing one person and injuring others. The victims sued. The plaintiff’s insurer and managing underwriter defended the action, which ultimately settled without any out-of-pocket payment from the plaintiffs. The plaintiff nevertheless sued the managing underwriter and insurer, alleging a single claim for declaratory relief. They sought that a declaration that a conflict of interest existed in the underlying case between plaintiff and the managing underwriter and insurance company, so they were entitled to so-called “Cumis” counsel pursuant to Civil Code section 2860 (section 2860).

The trial court sustained a demurrer without leave to amend and entered a judgment for the managing underwriter and the insurer, holding no conflict existed as a matter of law. On appeal, the appellate court concluded a demurrer was the incorrect procedural vehicle to resolve the plaintiff’s declaratory judgment claim against the managing underwriter and insurer. However, the plaintiff suffered no prejudice because the second amended complaint did not allege a conflict of interest entitling them to independent counsel pursuant to section 2860 as a matter of law. Section 2860 provides that if the provision of a policy of insurance imposes a duty to defend upon an insurer and a conflict of interest arises which creates a duty on the part of the insurer to provide independent counsel to the insured, the insurer shall provide independent counsel to represent the insured. In this case, the appeals court noted that the plaintiffs did not allege a conflict of interest entitling them to independent counsel. The court stated that the conflicts of interest contemplated by Section 2860 do not include an insured’s mere dissatisfaction with the performance of insurer-appointed counsel. Rather, Section 2860 springs from the ethical duty of an attorney to avoid representing conflicting interests. Thus, because the plaintiffs did not allege that the appointed law firm was thrusted in to any ethical conflict of interest in its representation of them and the insurer and managing agent, the court modified the judgment to declare no conflict of interest existed entitling the plaintiffs to independent counsel.

  1. (Expert Testimony) An expert witness’ opinion that relied on both inadmissible hearsay and general knowledge in the expert’s field was improperly disregarded. Jo Ann Strobel v. Johnson & Johnson (No. A159609 Solano County Super Ct. No FCS052548 California Courts of Appeal First Appellate District Division Four Filed September 21, 2021)

Plaintiff’s decedent was diagnosed with malignant mesothelioma and passed away shortly after the diagnoses. Before decedent’s death, plaintiff sued the manufacturer for damages under product liability, negligence and fraud theories, alleging that continuous exposure to asbestos in baby powder, a product he used regularly for some sixty years, was a substantial contributing cause of the mesothelioma.

The trial court granted summary judgment for the defendant manufacturer pointing to the declaration of the defendant’s expert, who swore that defendant’s baby powder was at all relevant times asbestos-free. The court ruled that the plaintiffs failed to present evidence creating a triable issue of legal causation. The plaintiffs filed declarations from five experts, all contradicting the defendant’s expert on that point.

The court sustained defendant’s hearsay objections to much of the plaintiff’s experts proffered expert testimony under People v. Sanchez (2016) 63 Cal. 4th 665 (Sanchez) and for lack of foundation. It then concluded that, after the exclusion of this testimony, the plaintiffs could not bear their burden of proof on legal causation because what was left were opinions by the plaintiff’s experts confirming the presence of asbestos in the talcum used to manufacture the baby powder, but not in the baby powder offered for sale as a finished product during the years the decedent used it. Without relying on case-specific hearsay about which these experts had no personal knowledge, the court ruled, they could only speculate about the presence of asbestos in the product during the exposure. An appeal followed the entry of judgment for the defendant. The appeals court reversed the decision of the trial court. The appeals court noted that while the trial court correctly ruled that the plaintiff experts related the specifics of testing data from another expert resulted is inadmissible hearsay. However, the trial court erred in ruling that the conclusions were entirely inadmissible. Many of the third-party documents qualified as general knowledge, both independently and because the defendant’s expert relied on the same documents, implicitly confirming their reliability. Therefore, plaintiff’s expert conclusions should not have been disregarded entirely, and those conclusions created a triable issue of legal causation. The court noted that an expert witness, per Sanchez may only convey hearsay as the basis of his opinion if it is general knowledge in the expert’s field, or if it is independently provable by admissible evidence.

  1. (Government Claims Act) A claim submitted without plaintiff’s knowledge did not cause the statute of limitations period to run. Ashleigh Cavey v. Policarpio Tacas Tualla, Jr. (No. F080153 Super. Ct. No. 18CECG01104 California Courts of Appeal Fifth Appellate District Filed September 24, 2021)

Plaintiff filed a personal injury action for injuries sustained in a traffic accident involving a vehicle driven by an employee of a School District (District). The District filed a demurrer, contending the lawsuit was time-barred by the six-month statute of limitations prescribed in Government Code section 945.6, subdivision (a)(1). The trial court sustained the demurrer without leave to amend and entered a judgment of dismissal. The plaintiff appealed. The appeals court reversed the judgement of dismissal.

The appeals court noted that the District’s theory of untimeliness was based upon a notice rejecting a claim presented without plaintiff’s authorization by a chiropractic firm that was treating her injuries. The District contended that rejection notice started the statute of limitations and, as a result, the six-month period expired well before plaintiff filed her complaint. Plaintiff alleged the claim submitted by the chiropractic firm was not authorized by her and, based on that allegation, argues the claim was not presented “by a person acting on her behalf” for purposes of Government Code section 910. In plaintiff’s view, when someone who is not acting on the claimant’s behalf presents a claim, that claim has no effect and, moreover, a notice of rejection of that claim does not start the six-month limitations. Under plaintiff’s approach, the limitations period did not begin to run until the authorized claim submitted by her attorneys, which was deemed rejected by the District. Based upon same, the plaintiff contended her complaint was timely filed under the six-month statute limitations. Alternatively, plaintiff also contended the District’s notice of rejection was mailed to the wrong address and, as a result, the two-year statute of limitations in section 945.6, subdivision (a)(2) applied.

The appeals court agreed with both contentions and concluded that the demurrer asserting that the lawsuit was untimely should have been overruled.

  1. (Unruh Civil Right Act) A plaintiff must possess a bona fide intent to make use of a business’ services to prevail under the Unruh Civil Rights Act. (No. E074098 Super. Ct. No. CIVDS1620291 California Courts of Appeal Fourth Appellate District Division Two Filed September 23, 2021)

Plaintiff is blind and used a screen reader software to access the Internet and read website content. Defendant, a Hotel Management Company maintains the website and operates restaurants, hotels and resorts. Plaintiff initiated this action against the defendant, alleging that its website was not fully accessible by the blind and the visually impaired, in violation of the Unruh Civil Rights Act; Civil Code, 51 et seq. By way of the special verdict, the jury rejected the plaintiff’s claim and found that she never intended to make a hotel reservation or ascertain defendant’s prices and accommodations for the purpose of making hotel reservation.

On appeal, plaintiff contended the trial court erred as a matter of law by instructing the jury that her claim required a finding that she intended to make a hotel reservation, and by including the word “purpose” in the special verdict form, which caused the jury to make a “factual finding as to her motivation for using or attempting to use defendant’s website.” The appeals court affirmed the trial court’s verdict and actions.

The appeals court noted that although the plaintiff had standing to assert an Unruh Act claim against the defendant, she still needed to present evidence that she had a bona fide intent to use defendant’s services. The plaintiff cannot sue for discrimination under the Unruh Act in the abstract but must actually suffer the discriminatory conduct. For online businesses, a plaintiff must demonstrate that she visited the businesses website, encountered discriminatory obstacles, and intended to make use of the business’s services. Thus, the trial court did not err in instructing the jury regarding the plaintiff’s claim.

  1. (In-House Counsel) Regardless of attorney’s status as in-house counsel, oral agreements with employer for litigation bonuses are contingency agreements that must be in writing and signed by both counsel and employer. Craig Missakian v. Amusement Industry, Inc. (No. B296749 Los Angeles County Super. Ct. No. BC616089 California Courts of Appeal Second Appellate District Division Five Filed September 29, 2021)

Plaintiff, a former in-house counsel filed a lawsuit against his former employer, based upon an oral promise to promise to pay a bonus and share of recovery from litigation. The jury issued a verdict in favor of the plaintiff on the claims brought against his former employer for breach of oral contract and promissory fraud. The defendant appealed from the judgment awarding damages for breach of oral contract. The defendant contended that the contract in question was void under Business and Professions Code section 6147, which requires a contingency fee agreement to be in writing. The appeals court agreed and held that regardless of the plaintiff status as in-house counsel, the plaintiff’s oral agreement with the defendant was a contingency fee agreement subject to section 6147 and was therefore unenforceable as matter of law. Just because the plaintiff was in-house counsel and an employee of defendant, it should not have been relieved of its statutory obligation as counsel if requiring it to meet the contingency fee requirement to Section 6147. By requiring all attorneys, including in-house counsel, to provide contingency fee agreements in writing ensures that the parties have mutually agreed to the contingency fee amounts and are aware of the services being provided.

  1. (Administrative Agencies) Under Code of Civil Procedure Section 1094.5, a trial court does not need to account for the original standard of proof when exercising its independent judgment in reviewing administrative decisions. Quinn Li v. The Superior Court (Medical Board of California) (No. C092584 Super. Ct. No. 34202080003396 California Courts of Appeal Third Appellate District Filed September 30, 2021)

In this matter a physician challenged the findings of the Medical Board of California regarding the petitioner’s medical license. The matter was heard by the trial court pursuant to a writ of mandamus requesting a stay of the Medical Board of California’s action. The issue in this case is whether the trial court in reviewing an administrative agencies findings (The Medical Board of California) must conduct an independent judgment standard of review, as noted within Code of Civil Procedures Section 1094.5 using a preponderance of the evidence standard versus a clear and convincing standard. The appeals court found that the trial court was correct in using a preponderance of the evidence standard upon which to evaluate the Medical Board of California’s decision in merits of the stay request. The appellate court noted after closely examining the statutory construction of Section 1094.5 that the preponderance of the evidence is standard of proof.

  1. (Medi-Cal Lien) California Department of Health Care Services in entitled to recover the portion of Medi-Cal beneficiary’s settlement attributed to past medical care paid through the Medi-Cal programs. L.Q. v. California Hospital Medical Center (No. B305723 Los Angeles County Super. Ct. No. BC608973 California Courts of Appeal Second Appellate District Division Three Filed September 30, 2021)

Plaintiff is a severely disabled child who suffered catastrophic injuries during her birth. She sued various medical providers for professional negligence, settling those actions for millions of dollars. The California Department of Health Care Services (hereafter, DHCS), through its director asserted a lien on plaintiff’s settlement to recover what DHCS paid for plaintiff’s medical care through the state’s Medi-Cal program. The trial court denied the lien, concluding that it was prohibited by the “anti-lien” provision of the federal Medicaid Act, 42 U.S.C. section 1396 et seq. (the Medicaid Act).

The appeals court concluded that the trial erred in denying DHCS’s lien. While the anti-lien provision of the Medicaid Act generally prohibits liens against the property of Medicaid beneficiaries’, other provisions of the Medicaid Act carve out exceptions for settlements or judgments recovered from third-party tortfeasors to the extent such settlements or judgments are attributable to payments made by the state for the beneficiaries’ medical care. The appeals court therefore reversed and remanded the matter to the trial court to determine what portion of the settlement properly is subject to the DHCS’s lien. The DHCS relied upon California Welfare and Institutions Code Section 14124.72, which allows recovery of the reasonable value of medical care costs it provided to the plaintiff. The federal Medicaid Act includes an assignment clause which requires Medicaid beneficiaries assigned to the state any rights that the beneficiaries have to third-party payments for the beneficiaries’ medical care. The court determined that the Medicaid Act did not preempt the state law permitting the DHCS’ lien.

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.