August 2019 Update
In PG&E v Superior Court (Butte Fire Cases) (2018) 24 CA5th 1150, the court held as a matter of law that the utility could not have acted with the requisite malice in connection with the 2015 wildfire caused by a tree contacting overhead power lines. See §§1.50, 12.87B.
Fraud and Nondisclosure
Proof of the scope of a broker’s duty (or a breach of that duty) does not necessarily need to be established by expert testimony if knowledge of such duty generally rests within the common knowledge of laypersons. Ryan v Real Estate of the Pac. (2019) 32 CA5th 637. See §§3.15, 3.32, 3.63.
Civil Code §2079.21 was amended to provide that a dual agent may not, without express permission of the seller, disclose to the buyer any confidential information obtained from the seller. Likewise, a dual agent may not, without express permission of the buyer, disclose to the seller any confidential information obtained from the buyer. “Confidential information” includes facts relating to a client’s financial position, motivations, bargaining position, or other personal information that may impact price, such as whether a seller is willing to accept a price lower than the listing price or whether a buyer is willing to pay more than the price offered. CC §2079.21(c), (d). See §§3.32D, 12.43.
When both sides obtain affirmative relief such that there are “mixed results,” a court may find that neither side has prevailed for purposes of recovering attorney fees and costs. Marina Pacifica Homeowners Ass’n v Southern Cal. Fin. Corp. (2018) 20 CA5th 191. See §§3.32D.
In Hansen v Sandridge Partners, L.P. (2018) 22 CA5th 1020 the court explained that a judgment quieting title due to adverse possession establishes an “estate” in land whereas a quiet title judgment for prescriptive easement only establishes a right to “use” land. The necessary evidence for establishing a successful claim for adverse possession is similar to that for prescriptive easement, but an adverse possession claimant must prove payment of all property taxes for a 5-year period. Due to an inability to prove payment of property taxes, some claimants have sought to obtain prescriptive easements that provide them with exclusive rights to the use of property (which would for all practical purposes be the same as receiving title based on adverse possession). The determining factor in whether a claim is for adverse possession or prescriptive easement is not determined by the name used in the cause of action but rather by whether the claimant seeks relief similar to an “estate” instead of an easement that amounts to a mere use of property. If a claimant seeks relief similar to an “estate” then that claimant will be required to meet all of the requirements for adverse possession even if the claim is designated as one for prescriptive easement. See §§7.4E, 7.9.
In Summers v Superior Court (2018) 24 CA5th 138, the court held that when the ownership interests of the parties are in dispute, the court must determine those interests before ordering partition. A court cannot properly enter an interlocury judgment for partition first and thereafter adjudicate the parties’ respective interests in the property. See §§8.67, 8.68.
In Integrated Lender Servs., Inc. v County of Los Angeles (2018) 22 CA5th 867, the court held that if a county has a restitution order against a criminal defendant but does not have an order levying against a particular piece of real property, then the county’s lis pendens is not effective to gain rights to surplus proceeds following a foreclosure by a senior encumbrancer. See §13.18.
Alternative Dispute Resolution
In McMillin Albany LLC v Superior Court (2018) 4 C5th 241, the court held that the procedures provided by the Right to Repair Act (CC §§895–945.5), also known as SB 800, are not the exclusive methods for addressing all construction defects; SB 800 expressly excludes from its requirements claims arising out of fraud or breach of contract. It also excludes claims for personal injury arising out of construction defects. But excepting these limited exclusions, claims seeking recovery for construction defect damages are subject to the Act’s prelitigation procedures regardless of how they are pled. Before the adoption of SB 800, no common law cause of action existed for purely economic loss due to construction defects. In adopting SB 800, the legislature provided a new statutory basis for recovery of economic loss damages due to construction defects. The legislature retained the status quo with respect to recovery for personal injuries caused by construction defects, and the legislature replaced common law methods of recovery arising from property damage due to construction defects with the new statutory scheme. See §14.4B.
The law which requires disputes be submitted to binding arbitration upon agreement of the parties may be unavailable if a party cannot prove the party’s own assent to a binding arbitration provision. In Juen v Alain Pinel Realtors, Inc. (2019) 32 CA5th 972, a broker moved to compel arbitration by producing a copy of the listing agreement in which the seller (but not the broker) had initialed the binding arbitration provisions of the contract. The original listing agreement had been destroyed after 5 years under the broker’s document retention policy. Even though the broker testified that the arbitration clause would have been initialed, the court ruled such testimony insufficient to prove that the arbitration clause actually had been initialed and the court denied the broker’s motion to compel arbitration. See §14.11.
A contractual right to compel arbitration will be subject to the same requirements as other contractual rights; a contractual right to compel arbitration will not be enforced if the contract which includes it is unenforceable because it violates public policy. In Sheppard, Mullin, Richter & Hampton, LLP v J-M Mfg. Co. (2018) 6 C5th 59, a large law firm, in violation of the professional rules of conduct, simultaneously represented, in unrelated matters, two clients who were adverse to each other. The California Supreme Court held that even though both clients had signed broad conflict waivers, those waivers were ineffective because the firm had failed to disclose a known conflict. As a result, the firm’s engagement letter (which contained a binding arbitration provision) was unenforceable and the firm lacked the ability to compel arbitration of its fee dispute with one of the client. See §14.40.
In Henry Schein, Inc. v Archer & White Sales, Inc. (2019) __ US __, 139 S Ct 524, the U.S. Supreme Court ruled that under the Federal Arbitration Act the issue of whether a dispute is subject to binding arbitration is to be decided by the arbitrator and not the courts when the parties have agreed that the issue of arbitrability is to be decided by the arbitrator, even when there are no grounds to support the claim that the dispute falls within the types of claims that are subject to the binding arbitration agreement. See §14.42H.
Legislation was adopted requiring legal counsel to provide each client with a printed disclosure about mediation confidentiality as soon as reasonably possible before the mediation. Senate Rules Committee Analysis of SB 954 (Aug. 21, 2018). The required disclosure (provided in Evid C §1129(d)) must be printed in 12-point type on a page that is not attached to any other documents provided to the client and must be signed by both the client and the attorney. Evid C §1129(c). This disclosure ensures that the client understands that the mediation proceeding is confidential and that no statements made at mediation may be used or relied on in any subsequent legal proceedings. The disclosure is not made inadmissible or protected from disclosure by Evid C §1119. Evid C §1122(a)(3). See §14.57A.
In Mesa RHF Partners, L.P. v City of Los Angeles (2019) 33 CA5th 913, the court held that three statutory requirements must be satisfied before a court will enforce a settlement agreement under CCP §664.6. The parties must have requested during the pendency of the case that the court retain jurisdiction (and not after the case has been dismissed), the parties themselves must have requested that the court retain jurisdiction, and the request must be made in a writing signed by the parties or made by the parties orally before the court. See §14.88.