November 2019 Update
Business and Professions Code §7071.17 was amended by Stats 2018, ch 925, revising the authorization to post a cash deposit in lieu of a bond to prohibit, among other things, certificates of deposit, and instead requires the contractor to deposit the appropriate amount of lawful money or a cashier’s check with the registrar under specified statutes. See §§1.12–1.13.
In ACCO Engineered Sys., Inc. v Contractors’ State License Bd. (2018) 30 CA5th 80, the court held that the use of the term “willful” in Bus & P C §7110 (willful disregard of certain state or local building codes) only requires a showing of general intent. The word “willfully” implies simply a purpose or willingness to commit the act, or make the omission referred to. It does not require any intent to violate law, or to injure another, or to acquire any advantage. Pen C §7(1). See §1.51.
In Sheppard, Mullin, Richter & Hampton, LLP v J-M Mfg. Co. (2018) 6 C5th 59, the California Supreme Court held that the legality of contracts that contain arbitration agreements and those that do not are to be judged by the same standards, and only contracts that are illegal in whole constitute grounds for vacating an arbitral award. See §§1.95B, 7.129.
Effective January 1, 2019, if a home inspector observes any shade of yellow corrugated stainless steel tubing during a home inspection, the home inspector is required to include that observation and a specified notification in the home inspection report. Bus & P C §7196.2. Home inspectors are also required to perform an irrigation system inspection report. Bus & P C §7195.5. See §2.102.
Effective January 1, 2019, Bus & P C §17577.3 authorizes the delivery and installation of a water treatment device, or any other materials that are the subject of a home solicitation contract, during the home solicitation contract rescission period. See §2.118.
Effective January 1, 2019, retail sellers and Investor-Owned Utilities are required to procure 50 percent of sales from renewable energy sources by 2026 and 60 percent by 2030. Pub Util C §399.11. Publicly owned municipal utilities are also required to establish procurement requirements based on the following interim goals: 33 percent by the period ending in 2020, 44 percent by 2024, 52 percent by 2027, and 60 percent by 2030. Pub Util C §399.30. See §4.26G.
In Centex Homes v R-Help Constr. Co., Inc. (2019) 32 CA5th 1230, the court held that when the plaintiff’s complaint alleges facts embraced by the indemnity agreement, the indemnitor has a duty to defend throughout the underlying tort action unless it can conclusively show by undisputed facts that plaintiff’s action is not covered by the agreement. See §5.112A.
In a case in which a party only partially prevailes on its claims, if the claims are legally and factually related and, despite the trial court’s denial of some of the requested relief, there is no adverse effect on the merits of the claims, the trial court can conclude the attorneys expended all requested hours. See Sweetwater Union High Sch. Dist. v Julian Union Elementary Sch. Dist. (2019) 36 CA5th 970. See §5.123.
In J.B.B. Inv. Partners Ltd. v Fair (2019) 37 CA5th 1 the court held that a court may enforce oral settlement agreement that is not memorialized in writing, as long as the objective criteria of mutual consent are met. Whether or not the parties plan to follow up with a formal written agreement does not preclude the existence of an earlier valid agreement. See §5.146.
Effective January 1, 2019, unregistered contractors and subcontractors on a public works project who perform work must pay any employee affected by a work stoppage the employee’s regular hourly prevailing wage rate for any hours the employee would have worked but for the work stoppage, up to 10 days of pay. Lab C §1771.1(j)(4). See §6.14A.
Effective January 1, 2019, under Lab C §1771.2, joint labor-management committees monitoring prevailing wage compliance may sue an employer that has failed to produce certified payroll recrods as required under Lab C §1776. See §6.14B.
In Synergy Project Mgmt., Inc. v City & County of San Francisco (2019) 33 CA5th 21, the court found that Pub Cont C §4107(a)(7) allows an awarding authority to consent to substitution when it, or its duly authorized officer, determines that the work performed by the listed subcontractor is substantially unsatisfactory and not in substantial accordance with the plans and specifications, or that the subcontractor is substantially delaying or disrupting the progress of the work. The court held that permitting the awarding authority to initiate the substitution of a subcontractor substantially complied with the procedures under Pub Cont C §4107 and was in accord with the objectives of the statute to prevent bid shopping and peddling, of which there was no risk under the circumstances. Moreover, prohibiting the awarding authority from initiating substitution would, in effect, leave an awarding authority with no expedient means of having another entity perform the work in a case where a sucontractor was failing to adequately perform. See §§6.37, 9.30.
In JMS Air Conditioning & Appliance Serv., Inc. v Santa Monica Community College Dist. (2018) 30 CA5th 945, the court held that the Subletting and Subcontracting Fair Practices Act permits an awarding authority’s agent to conduct a substitution hearing and does not confer fundamental vested rights to a subcontractor. Instead, a subcontractor has only limited, ancillary rights protecting against substitution which arise as a consequence of the statute’s primary purpose of preventing bid shopping and peddling. See §6.37.
In Juen v Alain Pinel Realtors, Inc. (2019) 32 CA5th 972, a broker failed to prove the existence of an enforceable arbitration clause because the original document was destroyed, the defendant could not find a version of the agreement intialed by the broker, and the defendant could not prove the agreement was initialed by the broker via habit or custom evidence. The court found the arbitration agreement was not enforceable. Whether assent could be shown through conduct other than initialing the arbitration clause or by habit and custom evidence was not decided by the court. See §7.25.
In Ramos v Superior Court (2018) 28 CA5th 1042, a wrongful termination case, a partner’s ability to pursue unwaivable statutory claims was inhibited by unconscionable terms in the partnership’s arbitration clause. The court held that the provisions requiring the partner to pay half the costs of arbitration, to pay her own attorney fees, restricting the ability of the panel of arbitrators to “override” or “substitute its judgment” for that of the parternship, and the confidentiality clause, were all unconscionable. See §7.26.
In Nunez v Nevell Group, Inc. (2019) 35 CA5th 838, the court held that advising the trial court in writing that the party would not file a motion to compel was an explicit waiver of the right to compel arbitration. Further, allowing two court-ordered deadlines to pass, by which the party was supposed to file motions, and engaging in significant litigation activities, constituted an implied waiver of the right to compel arbitration. See §7.28.
In Von Becelaere Ventures, LLC v Zenovic (2018) 24 CA5th 243, a contractor waived its contractual right to arbitrate by filing an action to enforce a mechanics lien without satisfying the requirements of CCP §1281.5(a). See §7.29.
In Jones v Sorenson (2018) 25 CA5th 933, the court held that a property owner was liable for his gardener’s negligence, whereas if gardener had been nurseryman, requiring licensure, liability would have been imputed to nurseryman. See §10.4.
In Mercury Cas. Co. v City of Pasadena (2017) 14 CA5th 917, the court held that a city tree constitutes work of public improvement for purposes of inverse condemnation liability if the tree is deliberately planted by or at direction of a government entity as part of planned project or design serving public purpose or use, such as to enhance appearance of public road. However, the government entity was not liable despite downstream damage because its maintenance plan was adequate and better than most cities’. See §§10.7, 10.8.
In Strouse v Webcor Constr. (review granted July 10, 2019, S256136; superseded opinion at 34 CA5th 703), the court held that the hirer of a contractor sufficiently contributed to a worker’s injury where it affirmatively prohibited subcontractors from maintaining or repairing safety covers, retained control over safety in general access area and conducted daily inspections, reasonably inducing subcontractors and their employees to rely on presumed adequacy of safety covers in work area. See §10.16.
The litigation privilege under CC §47(a) may only be activiated by the “publication” involved in litigation once the litigation has ripened into reality; the privilege may not be activated by a mere potential for litigation. Strawn v Morris, Polich & Purdy, LLP (2019) 30 CA5th 1087. See §10.26.
In Berkeley Cement, Inc. v Regents of Univ. of Cal. (2019) 30 CA5th 1133, the court held that mediation fees may be awarded as costs as reasonably necessary to the conduct of litigation. See §§11.5, 14.50.
In Kohler Co. v Superior Court (2018) 29 CA5th 55, the court held that the Right to Repair Act does not permit class action claims except when those claims address solely the incorporation into the home of a defective component other than a product that is completely manufactured offsite. See §§11.19, 15.15, 15.89.
In Air & Liquid Sys. Corp. v Devries (2019) __ US__, 139 S Ct 986, the Supreme Court found that, for maritime torts only (and not as a general common law tort rule), “a product manufacturer has a duty to warn when (i) its product requires incorporation of a part, (ii) the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses, and (iii) the manufacturer has no reason to believe that the product's users will realize that danger.” See §11.35.
In Kim v Toyota Motor Corp. (2018) 6 C5th 21, the court noted that even though evidence of industry custom and practice cannot be dispositive of whether there is a design defect, it may nevertheless be relevant to the strict products liability inquiry, including the jury’s evaluation of whether the product is as safely designed as it should be. See §11.40.
When an insured is sued for negligently hiring, retaining, and/or supervising an employee who intentionally injured a third party, even though the hiring, retention and supervision of the employee may have been “deliberate acts” by the insured, the intentional tort of the employee can be considered an “additional, unexpected, independent and unforeseen happening” that produced the injury, and thus, potentially an “accident” from the standpoint of the insured. Liberty Surplus Ins. Corp. v Ledesma & Meyer Constr. Co. (2018) 5 C5th 216. See §§12.31, 12.34.
In McMillin Homes Constr., Inc. v National Fire & Marine Ins. Co. (2019) 35 CA5th 1042, the care, custody, or control exclusion in a roofing subcontractor’s liability policy did not apply because the general contractor and roofing subcontractor shared control over the roofing work. See §12.56.
In Centex Homes v R-Help Constr. Co., Inc. (2019) 32 CA5th 1230, 1237, the court held that the duty to defend issue is one of law for the court to decide. The court also held that where the plaintiff’s complaint alleges facts embraced by the indemnity agreement, the indemnitor has a duty to defend throughout the underlying tort action unless it can conclusively show by undisputed facts that plaintiff’s action is not covered by the agreement. See §12.113.
In Martinez v OGA Charters, LLC (In re Charters, LLC) (5th Cir 2018) 901 F3d 599, the bankruptcy estate was subject to siege of tort claims exceeding the policy limits thereby threatening debtor’s estate and proceeds of the insurance policy were classified as property of estate. The court acknowledged special circumstances—over $400 million in mass tort claims arising from an accident killing nine chartered bus passengers and injuring 40 others—that gave rise to an “equitable interest” of the debtor in having the insurance proceeds applied to satisfy as many claims as possible. See §13.6.