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Posts Tagged ‘California Court of Appeals’

Sidewalk Trip & Falls – Business Beware

Posted on: November 6th, 2020

By: Robert Bazzo

Recently the California Court of Appeal, Second Appellate District (Division Two) heard the case of Jose Luis Lopez, Jr. v. City of Los Angeles and Wally’s Wine & Spirits, Et Al. (B288396.) The case involves a pedestrian (Plaintiff Lopez) who stepped on what looked like a puddle, but which ended up being a four-inch-deep pothole. As a result, he dislocated his ankle, tore three ligaments, and fractured two bones; repairing the damage necessitated two rounds of surgery.

The pothole was located where the street gutter meets the lip of a driveway in front of  the business known as Wally’s Wine & Spirits in the City of Los Angeles. The pothole was caused by deterioration of the asphalt due to regular use of the driveway by vehicles and due to water flowing in the gutter.

Plaintiff filed suit against the City of Los Angeles and Wally’s Wine & Spirits for negligence and premise liability.  In general terms, the owner or occupier of private property has a “duty” to exercise reasonable care “to maintain [its property] . . . in a reasonably safe condition” (Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 674, but that duty does not generally extend to the publicly owned sidewalks and streets abutting the property unless the owner or occupier has “exercise[d] control over [that publicly owned] property” (Alcaraz v. Vece (1997) 14 Cal.4th 1149, 1157-1158; Martinovich v. Wooley (1900) 128 Cal. 141, 143.

So, when does the owner or occupier of private property exert control of abutting, publicly owned property?

As a threshold matter, the owner or occupier must take some “affirmative” or “positive” action toward the abutting, publicly owned property. (Selger v. Steven Bros. (1990) 222 Cal.App.3d 1585, 1590-1591.)  Thus far, courts have identified two situations in which an owner or occupier of private land has engaged in affirmative or positive action sufficient to hold them liable for a hazard located on abutting, publicly owned property: (1) when the owner or occupier has created that hazard (Carson v. Facilities Development Co. (1984) 36 Cal.3d 830), i.e. the re-configuration is done (a) for the owner or occupier’s own “special benefit” and (b) in a manner that causes the public property to “serve a use independent of and apart from the ordinary and accustomed use for which [that property (e.g., a sidewalk) was] designed.”  The second affirmative or positive action is (2) treating property as its own.  Thus, even if a hazard located on publicly owned property is created by a third party, an abutting owner or occupier of private property will be held liable for injuries caused by that hazard if the owner or occupier has “dramati[cally] assert[ed]” any of the “right[s] normally associated with ownership or . . . possession” by undertaking affirmative acts that are consistent with being the owner or occupier of the property and that go beyond the “minimal, neighborly maintenance of property owned by another.” (Contreras v. Anderson (1997) 59 Cal.App.4th 188, 200.)  

At trial, there was no substantial evidence to support a finding that Wally’s created the pothole. There was no evidence presented at trial that the driveway apron or gutter were “constructed” or “altered” by Wally’s, by any of its predecessors in interest, or by the City at its (or their) behest. There was also no evidence that the sloped driveway or the gutter “serve[d] a[ny] use independent of and apart from the ordinary and accustomed use for which [driveways and gutters] are designed.”  Moreover, there was no evidence that the sloped driveway in this case deviated in any way from the standard construction of driveways and no evidence that Wally’s used the driveway for vehicles other than ordinary cars and vans.  There was also no evidence that the gutter running in front of Wally’s did anything beyond its “ordinary and accustomed use” of carrying away water, for which gutters are designed, and no evidence that Wally’s deposited more water into the gutters than any other property owner along the subject street.

Based on all of the above, the Court of Appeal held that the commercial business leasing the property and the driveway services did not exercise control over the location of the pothole (so as to create a duty of care to passersby) when the business has done no more than put the driveway and gutter to their “ordinary and accustomed” uses. Therefore, the trial court was correct in granting judgment notwithstanding the verdict to overturn a jury verdict that found the business partially liable for the pedestrian’s injury.

If you have questions or would like more information, please contact Robert Bazzo at [email protected].

E-tailers Beware: California Court of Appeal Rules that Amazon Can be Sued for Products Sold by Third-Party Vendors on its Website

Posted on: August 21st, 2020

By: Anastasia Osbrink

A California Court of Appeal issued a ruling on August 13, 2020, holding that Amazon can be held strictly liable for products sold on its website by third-party sellers through its “Fulfilled by Amazon” (“FBA”) program. (Bolger v., LLC (Aug. 13, 2020, No. D075738) ___Cal.App.5th___ [2020 Cal. App. LEXIS 761].)This ruling now opens the door for consumers to sue Amazon for any defective products sold on its website regardless of whether those products are directly sold by Amazon.

The ruling arises out of a lawsuit filed by a woman, Angela Bolger, who purchased a computer battery through Amazon that was sold through third-party vendor Lenoge Technology (HK) Ltd., fictitiously named “E-Life” on Amazon (“Lenoge”). Bolger alleges that the battery exploded several months later, causing her severe burns. Bolger sued several defendants, including Lenoge and Amazon, alleging strict products liability, negligent products liability, breach of implied warranty, breach of express warranty, and “negligence/negligent undertaking.” Lenoge did not appear and default judgment was entered against it. Amazon moved for summary judgment, arguing that a theory of strict liability and other related torts could not apply to it because it did not distribute, manufacture, or sell the product in question. A San Diego Superior Court granted the motion for summary judgment, and Bolger appealed.

Now the Court of Appeal has overruled the Superior Court, holding that Amazon “placed itself between Lenoge and Bolger in the chain of distribution” by accepting possession of the battery, storing it, promoting its website, listing the battery for sale, receiving Bolger’s payment, and shipping the battery to Bolger. Amazon inserted itself into the relationship between Lenoge and Bolger and set the terms of its own relationship with Lenoge, including demanding indemnification and fees. The court held that whether Amazon is labeled as a “retailer,” “distributor,” or “facilitator,” “it was pivotal in bringing the product here to the consumer,” and therefore, can be held strictly liable for any defect with the product. (Id. at *3.)

This holding follows a similar ruling in Pennsylvania, which was appealed and is now pending. (Oberdorf v. Inc. (3d Cir. June 2, 2020, No. 18-1041) 2020 U.S. App. LEXIS 17974.) Should these rulings remain in effect, they likely will change how websites offering products through third-party sellers approach their roles in the chain of distribution and assess future potential liability. It may – and should – make online retailers such as Amazon more cautious about offering products that they have not vetted or tested.

If you have questions or would like more information, please contact Anastasia Osbrink at [email protected].

Plaintiffs’ Burden to Establish Punitive Damages: Farmers & Merchants Trust Co. v. Vanetik

Posted on: April 18th, 2019

By: Jennifer Weatherup

A recent decision from the California Court of Appeal has outlined the requirements for establishing a defendant’s financial condition as a prerequisite to an award of punitive damages, and has further emphasized that it is the plaintiff’s burden to provide a comprehensive picture of the defendant’s financial condition in support of a punitive damages award.

In Farmers & Merchants Trust Co. v. Vanetik, Plaintiff F&M Trust, who was the trustee and administrator of a pension plan, sued Defendants Yuri and Tony Vanetik[1] for breach of contract and fraud. F&M Trust claimed that the Vanetiks made several false statements and representations, which induced it to acquire stock in their company. At trial, the jury found the Vanetiks’ liable, and F&M Trust was awarded over $3 million dollars in punitive damages from the Vanetiks.

The Court of Appeal struck down this award because F&M Trust failed to present sufficient evidence of the Vanetiks’ financial condition. Because punitive damages are intended to punish wrongdoing and deter future misconduct, juries must consider three elements when determining an appropriate punitive damages award: (1) the wrongfulness of a defendant’s conduct, (2) the amount of compensatory damages, and (3) the defendant’s wealth. Wealth must be considered in order to determine whether a particular award is significant enough to punish that particular defendant.

As the Vanetik Court observed, a plaintiff wishing to impose punitive damages on a defendant must present evidence that provides a “balanced overview” of their financial condition. Thus, a plaintiff cannot cherry pick details relating to a defendant’s assets while failing to present evidence of liabilities or encumbrances on their property. Because F&M Trust only presented circumstantial evidence of the Vanetiks’ income, failed to determine whether Tony Vanetik’s home was subject to a lien or even owned by Tony, and failed to consider the Vanetiks’ liabilities, the Court found that there was insufficient admissible evidence to support a punitive damages award.

The Court further rejected F&M Trust’s claim that they should be excused from their failure to present evidence of the Vanetiks’ financial conditions because Defendants did not produce that evidence. Prior caselaw does provide that punitive damages may be awarded without evidence of a financial condition if a plaintiff’s failure to produce evidence is the result of the defendant’s failure to comply with discovery obligations. However, the plaintiff bears the burden of showing that the lack of evidence was the defendant’s fault, and F&M Trust failed to satisfy this burden.

As the Court noted, F&M Trust never filed a motion for pretrial discovery into the Vanetiks’ financial condition, even though a plaintiff must obtain a court order before conducting discovery into a defendant’s financial condition. Similarly, the trial court did not order the Vanetiks’ financial condition before the punitive damages portion of the trial. Thus F&M Trust’s failure to produce sufficient evidence of the Vanetiks’ financial condition is not excused, and the punitive damages award must be stricken.

The Vanetik case provides useful authority for professionals and other defendants who are facing a substantial punitive damages award, as it demonstrates the extent to which plaintiffs bear the burden of establishing defendants’ financial condition, and emphasizes the need for plaintiffs to present a complete picture of defendants’ finances, rather than relying on selective, incomplete, or circumstantial evidence.

If you have any questions or would like more information, please contact Jennifer Weatherup at [email protected].

[1] Plaintiff also sued the Vanetiks’ attorney. The Court separately found that the attorney could not be found liable for conspiracy.

Cal. Attorney Sanctioned $50,000 for Reckless and Malicious Conduct at Deposition

Posted on: February 18th, 2019

By: Jenny Jin

A California Court of Appeal upheld a $50,000 sanction against an attorney based on conduct at a deposition.

On February 4, 2019, the Court of Appeal issued its opinion in the case Anna Anka v. Louis Yeager. This case involved a child custody dispute between Paul Anka’s ex-wife, Anna Anka, and her first husband, Louis Yeager. As part of this dispute, the trial court had ordered that a confidential child custody and evaluation report be performed. Mrs. Anka was then subsequently involved in a second child custody dispute with her second husband/now ex-husband, Paul Anka.

Mrs. Anka was represented by the same attorney in both custody disputes. Mrs. Anka’s attorney took Mr. Yeager’s deposition as part of Mrs. Anka’s second custody dispute. During the deposition, Mrs. Anka’s attorney asked Mr. Yeager a series of questions to attempt to elicit confidential information regarding the contents of the evaluation and report from the first child custody dispute. Mr. Yeager testified that he could not recall the information. However, the trial court still sanctioned Mrs. Anka and her attorney $50,000 jointly and severally for her attorney’s reckless and malicious line of questioning that was orchestrated to elicit confidential child custody information.

The Court of Appeal affirmed the $50,000 sanctions against the attorney, but reversed the sanctions award as to Mrs. Anka. The Court found that the disclosure of confidential information was due solely to the attorney’s reckless and malicious conduct during the deposition. The Court opined that “besides being an advocate to advance the interest of the client, the attorney is also an officer of the court” and further that “counsel’s zeal to protect and advance the interest of the client must be tempered by the professional and ethical constraints the legal profession demands.” The Court held that the attorney’s conduct in eliciting confidential information during the deposition was not only reckless, but was intentional and willful.

The takeaway from this case is that in both California and across all states, there are real ethical limitations to zealous representation during depositions. Attorneys must remember to balance their duty to zealously represent their client’s interests with their duty as officers of the court to conduct themselves with integrity, courtesy, and professionalism.

If you have any questions or would like more information, please contact Jenny Jin at (415) 352-6451 or [email protected].