2022 was a banner year for appointments and elevations to California’s Courts of Appeal. The State’s new Chief Justice and newest Associate Justice of the California Supreme Court led the news, but Governor Newsom also filled a large number of vacancies on the intermediate appellate courts. With all this change, it seemed a good time to take a quick look at the newest justices who will be shaping California jurisprudence in the coming years.
Appellate Court Issues Groundbreaking COVID Insurance Coverage Opinion in Favor of Policyholders
In an opinion that is the first of its kind in the California appellate courts, the Second District Court of Appeal, Division 7, has ruled that certain COVID-19-related business losses may be covered by business-interruption insurance (BII) policy provisions. Marina Pacific Hotels & Suites, LLC v. Fireman’s Fund Ins., No. B316501, 2022 WL 2711886 (Cal. Ct. App. July 13, 2022) (slip op.), available at https://www.courts.ca.gov/opinions/documents/B316501.PDF.
The groundbreaking opinion gives a leg up to policyholders struggling with pandemic-era debt and business losses. The decision may also inspire the California Supreme Court, other California Courts of Appeal, and the U.S. Court of Appeals for the Ninth Circuit (among other reviewing courts nationwide) to give policyholders the opportunity to prove BII coverage in the context of the pandemic.
Sanctions for Partially Frivolous Appeals in California
Sometimes in an appeal, the appellant takes a “kitchen sink” approach to briefing by advancing a number of baseless claims. Appellant has the burden of showing the lower court erred and may believe if it hurls enough contentions, maybe one will stick. Even though some of appellant’s arguments may have merit, that type of shotgun approach to appellate litigation can be frustrating and costly for a respondent tasked with investigating and responding to all of the arguments.
But, in California, a respondent facing such a scenario may—in the right kind of case—be able to recover a portion of its attorney fees for a “partially frivolous” appeal.
LAW OF THE CASE: Application in California Courts
There are a handful of legal doctrines that can be difficult to comprehend, but the law of the case doctrine shouldn’t be one of them. Yet, time and again, the doctrine seems to perplex litigants, especially when deciding whether it is binding or discretionary, and whether it has any application to a trial court’s own prior rulings. The answers to both of these questions are important to understand before asking a court to revisit a prior ruling.
The basic rule is this: a ruling or holding stated in an appellate court opinion is binding on all inferior courts in all subsequent proceedings related to the same parties in the same action. (Morohoshi v. Pacific Home (2004) 34 Cal.4th 482, 491.)
Attorneys, Clients, Constructive Knowledge, and Malicious Prosecution
The recent Court of Appeal decision in Roche v. Hyde, Nos. A150459, A1500462 (filed 6/30/20), though unpublished, presents a cautionary tale for lawyers and clients. The case arises out of sale of a winery in Sonoma County by Roche (“Seller”) to Ram’s Gate, LLC (“Buyer”). The focus of the fraud and misrepresentation claims by the Buyer was Seller’s failure to disclose a seismic report that showed an active fault line under a building pad. Seller maintained the report had been delivered to the attorney for a predecessor entity of Buyer (these entities had common ownership and the same attorney, Hyde), in a previous attempt to buy the winery.
After discovering the seismic issues impacting Buyer’s construction plans, Buyer sued for breach of contract, fraud and negligence, alleging the non-disclosure of the seismic fault. After protracted discovery to obtain Buyer’s files and those of its attorney Hyde to prove prior knowledge of the seismic facts, resulting in multiple court orders to produce requested documents, Buyer dismissed its case without prejudice to avoid court ordered discovery sanctions and also agreed to pay Seller’s attorney’s fees and costs. End of story?
Summary Judgment & Hearsay Objections: Viable Since Sweetwater?
In Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, the California Supreme Court examined evidence burdens in the context of the anti-SLAPP statute. Despite resolving anti-SLAPP issues, the opinion has serious implications for summary judgment motions that may not be obvious.
In resolving anti-SLAPP issues, Sweetwater analogized to summary judgment motions. In the anti-SLAPP context, once protected activity has been demonstrated, courts are to accept the opposing party’s evidence as true, and see whether the moving party has nonetheless defeated the opposing party’s showing “as a matter of law.” It doesn’t just sound like summary judgment, the Sweetwater Court expressly described the minimal merit prong of an anti-SLAPP motion as a “summary-judgment-like procedure.”