Berger Kahn's monthly e-publication 
The most important court decisions of the month
Welcome to Berger Kahn's monthly e-publication summarizing the most important California state and federal court decisions.

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An Insured’s Stipulated Judgment Was Not Binding On The Insurer
21st Century Ins. v. Superior Court
(Ct. App. 4th Dist., 2d Div.), filed September 10, 2015

Cy Tapia was in a car accident that severely injured and ultimately killed his passenger, Cory Driscoll. Driscoll and his mother sued Tapia. At the time of the accident, Tapia was driving his grandfather’s car, which was insured under his sister’s policy with 21st Century Insurance. Though 21st Century offered to settle the case for the $100,000 policy limit, Discroll believed Tapia might also be covered under his aunt's and grandma’s policies (also with 21st Century) -- each with $25,000 per person limits. Driscoll demanded $150,000 and 21st Century initially rejected the demand. Later, 21st Century offered $150,000. Driscoll did not accept the offer, and instead served a statutory offer to compromise for $3 million for Driscoll, and $1.15 million for his mother. After the offer expired, 21st Century warned Tapia it would not agree to be bound if Tapia accepted the offer. Tapia, however, agreed to the entry of a stipulated judgment in the above amounts. Tapia then assigned any rights he had against 21st Century to Driscoll in exchange for a covenant not to execute against his personal assets. A bad faith action followed. 21st Century moved for summary judgment. 21st Century argued: (1) because it was defending carrier and Tapia settled without its consent, under Hamilton v Maryland Casualty, 27 Cal. 4th 718 (2002), there could be no liability for the stipulated judgment; and (2) 21st Century did not have any obligation to offer more than the $100,000 limit. Driscoll argued that because 21st Century refused to defend Tapia under his aunt or grandma’s policy, he was free to enter into a stipulated judgment that would bind 21st Century. The trial court denied 21st Century’s summary judgment motion. The Court of Appeal reversed. The Court found that 21st Century was justified in refusing to defend Tapia under his grandma’s or aunt’s policies because those policies did not cover vehicles available for Tapia’s regular use. The Court also held that since Tapia agreed to the stipulated judgment without a trial to determine liability and damages, the use of the stipulated judgment could not be used to prove damages. Distinguishing several cases where a policyholder received a defense under a policy with low limits but not under higher limit policy, the Court held that the “critical factor . . . is that 21st Century simply did not have a duty to defend” under the two $25,000 policies.”

Anti-Slapp Motion Granted Because Caretaker Could Not Show Likelihood Of Prevailing On Defamation Claim
Barker v. Fox & Associates
(Ct. App. 1st Dist., Div. 2), filed September 10, 2015

Allison McBride suffered from dementia. She had a team of dedicated caretakers and supervisors, which included Alexander Barker as caregiver, Deborah Wagner as McBride’s estate conservator to supervise McBride’s care, and Cheryl Fox, CEO of Fox & Associates, to be McBride’s case manager. Fox & Associates employees began sharing in the responsibility to care for McBride. On one occasion, McBride became combative and injured a Fox employee. An email regarding the incident was circulated, noting that Baker had not properly oriented the Fox employee to McBride’s needs. E-mails flew back and forth. Finally, Wagner placed Barker on a 3-day probation. The following week, Barker quit. Barker filed a complaint for damages against Wagner, Fox, and Fox & Associates (“defendants”) for defamation, intentional infliction of emotional distress, and negligent infliction of emotional distress. The complaint focused on what Barker alleged to be “false and defamatory” e-mails. But throughout his complaint, Barker did not allege what he claimed to be specific defamatory communications. The defendants filed an anti-SLAPP motion arguing that (1) the statements were privileged, (2) the statements constituted a protected activity, and (3) there was no probability that Barker would prevail. In response, Barker argued that the statements were malicious, and not protected. He also argued that even if statements could be privileged, the publication went beyond the group’s interest. The trial court denied the anti-SLAPP, finding that it was unclear that the statements were privileged and that there was a probability of success. But the Court of Appeal reversed. It found that there was very little evidence of the claimed “slander,” since it was limited to a few sentences in e-mails and the single sentence that Wagner wanted to talk to Barker about the incident. The Court emphasized that malice could not be inferred “from the mere fact of the communication.” Barker’s emotional distress claims also failed since the conduct must be beyond “mere insults, indignities, threats, hurt feelings or bad manners that a reasonable person is expected to endure.”

Class Action Certification Improperly Denied Where Restitution Was Available On A Classwide Basis
Pulaski & Middleman LLC v. Google Inc.
(Ct. App. 9th Cir.), filed September 21, 2015

Google’s AdWords program was an-auction based program where Google served as the intermediary to place advertisements on websites based on the advertisers’ bids. Pulaski & Middleman filed a class action under California’s Unfair Competition and Fair Advertising Laws, claiming that Google misled them as to the types of websites where the ads would appear. Pulaski alleged that they had been charged for advertisements appearing on parked domain pages (undeveloped pages) or on error pages (unregistered web addresses). While the Pulaski had initially requested injunctive relief, Google changed some of AdWords’ features so that only the restitution claim remained. Pulaski moved for class certification, proposing three different damage methods that measured the difference between what advertisers actually paid and what they would have paid if Google had told them their ads would be placed on parked domain or error pages. The District Court denied the class certification motion, finding that common questions regarding restitution did not predominate. The District Court was concerned that there would be individual questions regarding each class members’ entitlement to restitution, and in the amount of restitution owed to the class. The Ninth Circuit reversed. The Court noted that “[e]ntitlement to restitution is a separate inquiry from the amount of restitution owed.” The Court noted that the District Court had conflated restitution calculation with a liability inquiry. Since restitution was only available on a class-wide basis after the class representative made a threshold showing of liability, the District Court erred in holding that individual questions would predominate. Also, the Ninth Circuit previously held that “damage calculations alone cannot defeat certification” and it was error to deny certification on that basis. Finally, the Ninth Circuit noted that the restitution calculation formula was not “arbitrary” since it measured the monetary loss from the particularly alleged injury.


Worker’s Compensation Exclusivity Bars Wrongful Death Asbestos Claim
Melendrez v. Ameron International Corp.
(Ct. App., 2d Dist., Div. 4), filed September 17, 2015

Lario Melendrez worked for Ameron International Corporation for 24 years, where he had been exposed to asbestos in manufacturing Amerson’s Bondstrand pipe products. Melendrez died from asbestos-related mesothelioma. His survivors filed a wrongful death lawsuit against Ameron. The lawsuit alleged that not only had Melendrez been exposed to asbestos on the job, but Ameron had also permitted Melendrez to take home the Bondstrand pipe he used at work (which was used to transport materials, and contained asbestos). Ameron moved for summary judgment arguing that Melendrez’ tort claims were barred by worker’s compensation exclusivity, and that the pipe had been given to Melendrez as a result of his employment. The trial court granted Ameron’s summary judgment motion. On appeal, Melendrez’ family argued that since Melendrez’ exposure to asbestos happened at home (and not at work), it was outside the scope of worker’s compensation exclusivity. But the Court of Appeal disagreed. The Court of Appeal noted that “if a substantial contributing cause of an injury arises out of and in the course of employment, the injury is covered by workers’ compensation, even if another, nonindustrial cause also substantially contributed to the injury.” Therefore, it found that Melendrez’ separate at-home exposure to asbestos did not create a separate injury outside of worker’s compensation coverage, and Melendrez’ mesothelioma was exclusively covered by worker’s compensation. 

Driver Liable For Costs Since He Had No Reasonable Basis To Deny Liability
Grace v. Mansourian
(Ct. App., 4th Dist., Div. 3), filed August 17, 2015

Defendant Levik Mansourian ran a red light in an intersection and hit a car Plaintiff Timothy Grace was driving. Grace filed a lawsuit for injuries to his ankle, back, and neck. Grace served requests for admissions, which included admissions on causation, negligence, and damages. Mansourian denied the requests. Mansourian’s medical expert examined Grace and agreed that Grace had fractured his ankle and needed surgery as a result of the accident. He agreed that Grace had also suffered injuries to his back and neck, but denied that these injuries were a result of the accident. To prepare for trial, Grace deposed a traffic collision investigator, an eyewitness, and four medical experts and retained an accident reconstruction expert. At trial, all the witnesses testified that Mansourian ran the red light. Mansourian testified that the light was yellow when he went through the intersection. The jury found Mansourian was negligent, awarding just over $410,000 in damages. Grace filed a motion to recover expenses he incurred in proving the facts Mansourian unreasonably denied in discovery. The trial court denied the motion because Mansourian “reasonably believed he could prevail based on his memory [that] he did not run a red light.” It also found that it was reasonable to deny the extent of Grace’s injuries, and the amounts Grace spent for medical treatment. On appeal, the Court emphasized that the question was not “whether defendant reasonably believed he did not run the red light but whether he reasonably believed he would prevail on that issue.” The Court held that in “light of the substantial evidence defendant was at fault, plus defendants’ apparent understanding of the weakness of their position, as evidenced in their opening statement, defendants’ sole reliance on [Mansourian’s] perception he entered the intersection on a yellow light was not a reasonable basis to believe they would prevail.” The case was remanded to the trial court to determine how much Grace would be entitled to recover.


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