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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The Need To Remove Concrete To Replace Inadequate Tie Hooks Is Not "Property Damage"
Regional Steel Corporation v. Liberty Surplus Insurance Corporation
(Cal. Ct. of App., 2d Dist.), filed May 16, 2014

Regional Steel was to provide reinforcing steel on a high rise construction project. A building inspector issued a correction notice regarding certain Regional Steel work. This delayed completion of the project. The owner sued Regional Steel for damage resulting from the delay in completion of the project. Regional Steel tendered the defense to its liability insurer, Liberty. In the ensuing coverage litigation, the court held that the owner’s claims against Regional Steel were not for “property damage” as defined by the policy and California law.

A Major Retailer Had No Duty To Keep An Automatic External Defibrillator On Hand To Respond To Possible Customer Medical Emergencies
Verdugo v. Target Corporation
(Cal. Sup. Ct.), filed June 23, 2014

The California Supreme Court held that under California law, the common law duty of reasonable care that a business like Target Corporation owes to its business customers does not include an obligation to obtain and make available on its business premises an automated (or automatic) external defibrillator (AED) for use in a medical emergency.

No Liability When 17-Year Old Steals Vodka From A Home Bar And Dies From Alcohol Poisoning
Allen v. Liberman
(Cal. Ct. of App., 3d Dist.), filed June 18, 2014

17-year-old Shelby Allen went for a sleepover at the home of her 16-year-old friend Kayli Liberman. After Kayli’s parents went to bed, Shelby got vodka from the Libermans’ bar, drank 15 shots, started vomiting and passed out. Shelby died of acute ethanol intoxication. Shelby’s parents sued the Libermans, but the trial court granted the Libermans’ motion for summary judgment based on a statute that provides “no social host who furnishes alcoholic beverages to any person may be held legally accountable for damages suffered by that person...resulting from the consumption of those beverages.” The Court of Appeal affirmed, saying: “although the Libermans could have done more to protect, supervise or aid Shelby, they are not liable for furnishing alcohol, making alcohol accessible, or failing to supervise Shelby. Kayli’s parents had a special relationship with Shelby because she was an invited guest in their home, but that special relationship, by itself, does not negate the specific statutory social host immunity applicable to these facts.”


Federal Law On Arbitration May Trump State Law
Iskanian v. CLS Transportation Los Angeles, LLC
(Cal. Sup. Ct.), filed June 23, 2014

Arshavir Iskanian sought to bring a class action lawsuit on behalf of himself and similarly situated employees for his employer’s alleged failure to compensate its employees for, among other things, overtime and meal and rest periods. In seeking employment, Iskanian had entered into an arbitration agreement that waived the right to class proceedings. The California Supreme Court held that Federal law preempts state law that would refuse to enforce such a waiver on grounds of public policy or unconscionability. 

The Arbitrator Had To Decide If Arbitration Agreement Was Valid
Malone v. Superior Court
(Cal. Ct. of App., 2d Dist.), filed June 17, 2014

Keeya Malone filed a wage and hour action against her former employer, California Bank & Trust (“CB&T”). CB&T moved to compel arbitration, based on a clause in its employee handbook. Malone opposed the motion arguing the arbitration agreement was unconscionable. CB&T responded that issues relating to the enforceability of the arbitration agreement had to be resolved by the arbitrator. The Court of Appeal held that based on recent developments in the case law, it was for the arbitrator to decide if the agreement was valid.

Demand Letter Referencing Possible Referral To U.S. Attorney Is Not Protected Speech For Anti-SLAPP Purposes
Stenehjem v. Sareen
(Cal. Ct. of App., 6th Dist.), filed June 13, 2014

Jerome Stenehjem sued his former employer, Akon, Inc., and Surya Sareen, Akon’s president and chief executive officer. However before doing so, he sent a letter demanding they settle. In it, he mentioned a potential qui tam suit; alluded to accounting documents created by Stenehjem at Sareen’s specific direction, and referred to potential involvement of the United States Attorney General, Department of Justice, and Department of Defense. Sareen countersued for civil extortion. The Court of Appeal held the demand constituted civil extortion and was not protected under the anti-SLAPP laws.

Merely Allowing Asbestos To Adhere To A Workers Clothing Does Not Mean Employer Has A Duty To The Employee’s Family
Haver v. BNSF Railway Co.
(Cal. Ct. of App., 2d Dist.), filed June 3, 2014

Lynn Haver contracted mesothelioma from asbestos that adhered to her former husband’s clothing while he worked for BNSF Railway Company. Her heirs sued BNSF on the theory that it negligently maintained its premises in such a way that asbestos fibers were brought home on the Haver’s husband’s clothing. The court held that under Campbell v. Ford Motor Co., 206 Cal.App.4th 15 (2012), they could not state a viable claim against BNSF. The court distinguished the recent case of Kesner v. Superior Court, -- Cal.App.3d -- (2014) [addressed in Key Decisions for June 2014], because there the defendant had manufactured the brake linings that contained the asbestos.


Component Parts Doctrine Did Not Apply To Silica Sand
Uriarte v. Scott Sales Co.
(Cal. Ct. of App., 2d Dist.), filed June 13, 2014

J.R. Simplot Company and Scott Sales Co. supplied silica sand to Francisco Uriarte’s employer, for use as sandblasting media. Uriarte sued Simplot and Scott, alleging that the airborne toxins produced by sandblasting with their silica sand caused him to develop interstitial pulmonary fibrosis and other illnesses. The Court of Appeal held that the component parts doctrine, which provides that “the manufacturer of a component part is not liable for injuries caused by the finished product into which the component has been incorporated unless the component itself was defective and caused harm," did not apply.


Failure To Disclose Allegations Warranted Sanctions Where Evidence Revealed Plantiff’s Actual Notice Of “Undisclosed” Condition
Peake v. Underwood
(Cal. Ct. of App., 4th Dist.), filed June 25, 2014

A home buyer sued the seller’s broker for failing to disclose defective subfloors in the home. The broker sought sanctions against the buyer and her attorney under Code of Civil Procedure, section 128.7, for bringing an action that was factually and legally frivolous. The broker argued the buyer’s claims were factually and legally frivolous because the undisputed evidence showed he had fulfilled his statutory and common law disclosure duties, and the buyer had actual notice of facts disclosing prior problems with the subfloors. The trial court granted the motion. The Court of Appeal affirmed. A claim is factually frivolous if it is “not well grounded in fact” and it is legally frivolous if it is “not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.”


If Your New Car’s Sunroof Opens And Closes Randomly, On Its Own,You Might Have A Lemon
Brand v. Hyundai Motor America
(Cal. Ct. of App., 4th Dist.), filed June 17, 2014

Ilan Brand leased a new Hyundai automobile. While driving it home, the sunroof started to open and close randomly on its own. He took the car back to the dealer, which, during the course of the next week, tried to repair it. After a week, Brand told the dealer he wanted to rescind the deal. When the dealer refused, Brand sued. The trial court agreed that the sunroof was defective, but granted a nonsuit in favor of Hyundai. It reasoned the defect did not amount to a breach of the implied warranty of merchantability under the Song-Beverly Consumer Warranty Act. The Court of Appeal reversed. It concluded a jury could reasonably conclude it was a breach.



Our Dedicated Key Decisions Team! 

Lance LaBelle
Orange County

David Ezra
Orange County

Ann Johnston
S. F. Bay Area

Roberta Winston
San Diego



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