Almanor Lakeside Villas HOA v. Carson

Click here for opinion

Almanor Lakeside Villas reconfirms the power of an HOA under the Davis-Stirling Act, provides a solid outline of the discretion of the court to award attorneys fees, and reaffirms the inefficiencies of the civil litigation system.

The owner of a lodge within an HOA disputed certain fines assessed by the association.  At trial, the HOA estimated that the owner owed $54,000.00 in dues, fees, fines, and interest.  The judge in a court trial awarded the HOA $6,620.00.  Both sides moved for attorney’s fees.  The court concluded that the HOA prevailed and awarded the HOA $101,803.50 in attorney’s fees and costs.

The opinion provides a good summary of when courts do and do not have discretion to award fees and what goes into a determination of which side is the prevailing party.  It recognizes, however, that the Davis-Stirling Act (California Civil Code 4000-6150) requires an award of attorney’s fees to the prevailing party.

The owner successfully whittled the claim down by almost 90%, but he ends up having to pay almost twice the amount claimed by the HOA, in addition to his own fees and costs.  Sometimes, a good result yields a bad outcome for cases where attorney’s fees, as opposed to the merits, drive a lawsuit.

 

I thought I was reading the Onion….

I should feel better about increasing employment opportunities for lawyers. . . But this is sad.  Pats fans everywhere should be ashamed. 

Law360, New York (April 5, 2016, 3:53 PM ET) — A group of New England Patriots fans asked a Massachusetts federal court on Monday to issue a temporary restraining order that would save a first-round draft pick revoked by the NFL in connection to the Deflategate scandal, saying the punishment is unfair and discriminates against Pats fans.
The fans filed a complaint and expedited motion for a temporary restraining order and preliminary injunction that would prevent the league from revoking the Patriots’ pick ahead of the NFL draft scheduled to begin April 28. 

U.S. top court rules for DirecTV in arbitration case | Reuters

This is a big deal.  California courts have been fighting for years to carve out exceptions to the general rule upholding arbitration agreements, especially those in consumer agreements.  This new case provides some clarity that if you sign a contract that includes an agreement to arbitrate, then you will arbitrate and you will not be able to file a lawsuit.

The U.S. Supreme Court on Monday ruled for DirecTV Inc, backing the satellite television provider’s efforts to enforce arbitration agreements signed by its customers in California.

Source: U.S. top court rules for DirecTV in arbitration case | Reuters

Ninth Circuit Blesses Iskanian re: Arbitration of PAGA Claims | The National Law Review

PAGA Claims | The National Law Review

The Ninth Circuit inched California closer to clarity on the the scope of preemption of state law by the Federal Arbitration Act.  While AT&T Mobility v. Concepcion, 563 U.S. 321 cast a wide net of preemption in favor of arbitration clauses, the width of that net has resulted in a struggle between California courts seeking to apply their state laws and federal courts seeking to apply theirs.

On September 28, 2015, the Ninth Circuit Court of Appeals issued a 2-1 decision in the long-awaited case of Sakkab v. Luxottica Retail North America, Inc. (No. 13-55184, D.C. No. 3:12-cv-00436-GPC-KSC).  Sakkab held that a waiver of class actions in an employment agreement was unenforceable to the extent that it preempted state court claims under the California Private Attorney General Act (“PAGA”), affirming the California Supreme Court case of Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014) (“Iskanian”), which held that employees could not waive their right to bring representative claims under PAGA.

McGill v. Citibank- The California Supreme Court Will Review

McGill v. Citibank docket information.

On December 22, 2014, I posted an article on McGill v. Citibank.  Click here for prior post.

On April 1, 2015, the California Supreme Court granted a petition for review, putting the issue of arbitrability in flux once again.   The District Court of Appeal opinion in McGill distinguished Iskanian v. CLS Transportation Los Angeles (2014) 59 Cal. 4th 348, holding that a true Private Attorney General Action is properly a “state” action, while the injunctive claims of Ms. McGill were not, even though they intend to help people similarly situated.  The California Supreme Court will undoubtedly examine that distinction.

Stay tuned!

 

Why law school?

Which 10 law schools have the most indebted grads?.

Why would anyone take on $172,000 of debt; incur additional expenses for housing, food, and incidental;  and lose three years of earning potential to get less than a 40% chance of a job?  This article exposes a real problem with the legal industry and with the student loan industry.

Belasco v. Wells- If You Sign It, Then It Will Apply

Click here for PDF of opinion

A buyer of a new home built in 2004 filed a claim against the contractor in 2006.  They settled for $25,000.00.  In exchange for the money, the buyer signed a general release of all claims, known and unknown, related to the construction of the home.

In 2011, the buyer found problems with the roof and filed another action.  The trial court granted summary judgment to the contractor because the 2006 release applied to any issues related to the construction, known or unknown.

In a construction defect case, it is important to take some care in drafting the release, especially if the construction is less than 10 years old, as latent defects may appear.  In Belasco, however, the court examined the release, found it to apply to the entire house, and affirmed summary judgment.  It could be, however, that no judge was going to be sympathetic to Mr. Belasco, since he was himself an attorney.

 

Richardson v. Franc- easements, licenses, and litigation

Click here for opinion

Richardson v. Franc is a case of once happy neighbors becoming less so.

There was peace for many years.  For their driveway, James Richardson and Lisa Donetti (“respondents”) had an access easement over their neighbors’ property.  The boundaries of the easement had beautiful landscaping and an expensive and  complicated irrigation and lighting system around and under the driveway.  The respondents and their predecessors maintained the easement with their neighbors for over 20 years.

The Francs bought the neighboring property in 2004.  For six years, they lived in harmony.  In late 2010, the discord began.  Mr. Franc cut the irrigation and electrical lines without notice and then had an attorney send a letter demanding the removal of all landscaping within five days.  Litigation ensued.

The trial court held that there was an irrevocable license to maintain the landscaping and supporting systems.  The Francs appealed.

The landscaping exceeded the defined purpose of the access easement.  The Francs’ predecessor permitted, however, if not encouraged, the landscaping, creating a revocable license.  A license is typically revocable, but can become irrevocable when the grantor knowingly allows acts that involve substantial amounts of money and improvement.  It would then be unfair to terminate the license, which becomes irrevocable.

Licenses and easements are creatures of equity and fairness.  The Francs lost their right to claim fairness when they cut the lines.  The court’s opinion did not say that bad people should not prevail, but I expect that the trial court judge and the appellate panel probably thought it.

Montano v. The Wet Seal- The Private Attorney General Doctrine Trumps The FAA

Recently, I commented on the McGill case, which affirmed a broad measure of federal preemption of state restrictions on the enforceability of arbitration agreements.  The prior article is:

McGill v Citibank- More Federal Preemption For Arbitration Agreements.

The Second District of the California Court of Appeals recently issued Montano v. The Wet Seal.  The opinion affirmed the liberal preemption scope of the Federal Arbitration Act, but, since this case involved an attempt to waive the protections afforded by the the California Labor Code and the Private Attorney General Act, returned to Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348.  The court held that Iskanian still controlled its narrow field of where California rules can require a court to void an arbitration agreement.

This new case does not break new ground or invite the United States Supreme Court to wield its hammer of preemption.  It does, however, provide some strengthening of Iskanian should the federal courts question the ability of California to reserve matters for its courts that could be suitable for prosecution by its Attorney General.

McGill v Citibank- More Federal Preemption For Arbitration Agreements

Click for McGill v Citibank opinion.

The fallout from Concepcion continues.  AT&T Mobility LLC v Concepcion (2011) 131 S Ct 1740 ruled generally that the Federal Arbitration Act (“FAA”) preempted state law. The opinion recognized, however, that the FAA “permits agreements to arbitrate to be invalidated by `generally applicable contract defenses, such as fraud, duress, or unconscionability,’ but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” Concepcion, 131 S. Ct. At 1746.

The California Supreme Court has tried to exclude a number of disputes from the FAA preemption. Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066 (Broughton) and Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303 (Cruz) combined to create the “Broughton-Cruz Rule” that deemed arbitration provisions unenforceable as contrary to public policy if they require arbitration of claims for injunctions under the California Unfair Competition Law, The California False Advertising Law, or the California Consumer Legal Remedies Act. Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 invalidated predispute waivers of an employee’s right to bring a representative action under the Labor Code Private Attorneys General Act of 2004.

In McGill v. Citibank, N.A., the Fourth District of the California Court of Appeals will likely give the California Supreme Court another opportunity to evaluate what disputes, if any, that California courts will except from federal preemption.

In McGill, an individual sued Citibank for unfair competition and false advertising in connection with a credit insurance plan. Citibank petitioned to compel arbitration under its account agreement with the plaintiff. The trial court granted the petition with respect to the monetary claims, but denied it with respect to the claims for injunctive relief, relying on the “Broughton-Cruz Rule.” The plaintiff relied on Iskanian, likening her claims to those of an individual making claims in lieu of the Attorney General.

The Fourth District Court of Appeals reversed, siding with federal court decisions that Concepcion preempted the “Broughton-Cruz Rule” and required all claims to be arbitrated. The opinion distinguished Iskanian, holding that a true Private Attorney General action is properly a “state” action, while the injunctive claims of Ms. McGill are not, even though they intend to help people similarly situated.

 

California has long tried to preserve the interests of individuals subject to the “small print” of arbitration agreements imposed upon them by people, businesses, and others with superior bargaining power. The federal courts, starting with Concepcion, seek to promote arbitration agreements. With McGill, at least one District Court of Appeal is thinking the same way. The extreme budget cuts facing many Superior Courts should encourage a policy favoring dispute resolution outside of the court system, but such a policy should not be so broad that it denies civil justice to the citizens of California. Iskanian could be the right balance, but the question remains as to whether McGill might tip the balance in the wrong direction.