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Posts Tagged ‘California’

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].

Serving That Whiskey Might Be Risky – Liability Of Social Hosts In DUI Accidents

Posted on: February 15th, 2019

By: Stacey Bavafa

Under California Civil Code Section 1714, social hosts and other third parties may be held to be partially liable in the event of a drunk driving accident depending on the circumstances that led up to the accident. Under Sec. 1714, everyone is responsible for the result of his or her willful acts, but also for injuries sustained by another by a want of ordinary care or skill in the management of his or her property or person.

California courts have held that the furnishing of alcoholic beverages is not the proximate cause of injuries resulting from intoxication, but rather that the consumption of alcoholic beverages is the proximate cause of injuries inflicted upon another by an intoxicated person. Vesley v. Sager (1971) 6 Cal.3d 153; Bernhard v. Harrah’s Club (1976) 16 Cal.3d 313; and Coulter v. Superior Court (1978) 21 Cal.3d 144.

Therefore, social hosts who provide alcoholic beverages to a person may not be held legally accountable for damages suffered by the intoxicated person, or for damages the intoxicated person inflicts on another person resulting from the consumption of alcoholic beverages. In other words, if John Doe had 5 glasses of whiskey at a bar and ends up swerving in and out of his lane due to his inebriated state, and hits another vehicle causing injury to a third person, the bar who provided John Doe the 5 glasses of whiskey will not be required to pay for damages sustained by the third party.

There are however, two exceptions to the rule outlined above:

If an adult, including a parent or guardian, who knowingly serves alcoholic beverages at his or her residence to a person whom he or she knows, or should have known, to be under 21 years of age, the adult may be held liable for actions the minor takes as a result of the consumption of alcohol.

Further, if a business sells alcohol to an obviously intoxicated minor, in such that a reasonable person would be able to tell the minor was intoxicated, the business may face liability for harm arising out of the minor’s actions.

In the case of the underaged drinker, both the underaged drinker and the person who was harmed by the actions of the underaged drinker can file a civil claim against the social host or business to obtain recovery of his or her medical bills, property damage, pain and suffering, loss of income, and legal fees.

If you have any questions or would like more information, please contact Stacey Bavafa at (213) 615-7026 or [email protected].

Best Practices for HOA Elections

Posted on: February 13th, 2019

By: Charles McCurdy

In California, as communities with HOAs have proliferated, so has the thicket of statutes, rules and regulations that apply to their operations. For example, just holding an election for an HOA’s Board of Directors implicates California’s Civil Code, its Corporations Code and an HOA’s governing documents, including its bylaws and CC&Rs. Additionally, since 2006, HOAs must have separate documents setting forth their voting rules. As HOA elections frequently morph into contentious affairs, it is often a good idea to provide as much clarity as possible on the standards and procedures to be used in advance of the election. This can help elections run more smoothly and may enable HOAs to avoid disputes and even costly litigation about the results.

To further this goal of more agreeable elections with more definite outcomes, HOAs should update their governing documents, particularly bylaws and voting rules. The Civil Code (§ § 5105 – 5130) relating to HOA elections has changed twice in the somewhat recent past (2006 and 2013), while many HOA’s governing documents date from their founding. In many instances, amended statutes may supersede outdated governing documents. This can sow confusion when members rely on governing documents that no longer control to understand how the election will be run, who are eligible candidates, and other important election-related considerations. Once governing documents comport with current statutes, HOAs should distribute them to their members in the lead up to elections. For example, HOAs can include these documents as part of an election package that may also include ballots, candidate information and other instructions or regulations. HOAs should also remember the law mandates equal access to association media (such as newsletters) and meeting space for campaigning.

While HOA elections may not always bring out the best in their members, a bit of anticipatory drafting and information sharing can go a long way to avoiding litigation over their results.

If you have any questions or would like more information, please contact Charles McCurdy at (415) 352-6416 or [email protected].

Cancelling a Financed Policy: Reliance on a Power of Attorney

Posted on: February 8th, 2019

By: Eric Benedict

When a prospective insured is applying for and obtaining coverage, no matter the type of risk, the cost of the premiums is likely to be a foremost concern. To cover the cost of the premium, an insured may choose to seek financing from third-party entities known as premium financing companies. In exchange for agreed upon terms, premium financing companies will pay all or part of the premium due, with expectation that the insured will pay back the loan over time. In an effort to reduce the risk that the premium finance company will suffer a loss as a result of the insured’s default, premium financing companies often require that the insured grant the company a power of attorney to cancel the policy on the insured’s behalf and collect any returned premium in the event of a default. Both the terms of a policy and relevant legal authorities may set forth different requirements for cancellation when the policy is cancelled by the insured than when it is cancelled by the insurer.

As a result of the relationship established between the premium finance company and the insured, an insurer is often placed in the position of receiving a notice of cancellation from the premium finance company on behalf of the insured. In many states, premium finance companies are subject to regulation and some states have set forth specific procedures that a premium finance company must follow when exercising a power of attorney to cancel a policy on the insured’s behalf. To provide certainty to the insurer regardless of whether the premium finance company has complied with statutory or regulatory requirements prior to cancellation, some statutory schemes also provide insurers the ability to rely on representations and cancellations from premium finance companies. Many of the states which have adopted such schemes provide specific conditions under which an insurer is entitled to rely on a notice of cancellation from a premium finance company, thereby shielding the insurer from liability after it cancels a financed policy at the direction of the premium finance company. While many of these schemes contain similar language, the circumstances and conditions under which an insurer may properly rely varies by jurisdiction.

Ultimately, although an insured’s ability to finance an insurance premium may have the effect of widening access to coverage to those who require financing, it is imperative that both the premium finance company and the insured understand their rights and obligations under the relevant statutory scheme. Similarly, it is critical that insurers understand the relevant legal authorities concerning its rights and responsibilities when dealing with an insurance premium finance company which exercises its right to cancel a party on behalf of the insured.

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

District Court in California Certifies a Class of Five Million Against Walmart

Posted on: February 8th, 2019

By: Koty Newman

On January 17, 2019, a Federal District Court in California certified a class of five million Walmart applicants. The Class Representatives allege that Walmart failed to comply with the Fair Credit Reporting Act’s (“FCRA”) disclosure requirements by including extraneous information in its disclosure forms, thus violating disclosure and authorization requirements. The Class Representatives also allege that Walmart obtained investigative reports without informing the applicants of their right to request a written summary of their rights under the FCRA.

For a court to certify a class, the court must find that the proposed class satisfies the four requirements of Federal Rule of Civil Procedure 23(a): numerosity, typicality, commonality, and adequacy of representation. The facts of this case were tailor-made to meet these requirements. The Court noted that with the proposed class of five million applicants and employees, the class would be so numerous that joining all the members would be impracticable. The Court also found that the Class Representatives would adequately represent the class and vigorously prosecute the action on behalf of the class.

The requirements of typicality and commonality overlap to some degree, and the Court found that both were satisfied in this case. The Class Representatives, as applicants to Walmart, were found to be typical of the class because their interests align with those of the class. Finally, the case satisfied the commonality requirement given that every person in the class allegedly encountered similar confusing extraneous material in violation of the Fair Credit Reporting Act during their application process to Walmart. Each class member also allegedly was not informed of his or her right to request a written summary of his or her rights. The Court found these common issues would predominate the adjudication of the case, even though there may be small factual differences among individuals in the class. Thus, the Court held that it made practical sense to certify the class and resolve all of these individual’s problems in one case, rather than five million cases.

The Court also noted that this case presents more than a mere technical violation of the FCRA. The Class Representatives have, in essence, alleged that Walmart accessed their personal information in violation of their protected rights, a concrete harm.

This ongoing case serves as a warning to employers across the United States who conduct background investigations; comply with the FCRA, or you may face the prospect of having all those applicants come back to haunt you in a class action. If you have any questions or need help with an FCRA case, please contact one of our attorneys for guidance.

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