Employees in California are protected by the Workers’ Compensation Act (WCA) which governs “compensation given to California employees for injuries incurred in the course and scope of their employment.” Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 810. All employers except the state must secure the payments of compensation by either carrying workers’ compensation insurance or self-insuring. In a recent case, the San Mountain Empire School District was self-insured, but had also contracted for excess policy insurance. In the case of the Mountain Empire School District, its excess insurer ran out of money.

California law also provides for protection to both “insured and the public” through a system called the California Insurance Guarantee Association (CIGA). Fireman’s Fund Ins. Co. v. Workers Comp. Appeals Bd. (2010) 189 Cal.App.4th 101, 111-112. CIGA pays only: 1) covered claims and 2) claims for which neither a solvent insurer or self-insured employer is jointly and severally liable.

 By: Julia M. Wei and Josue Uribe Fonseca

In a purchase and sale context, California law requires the seller of residential real estate to disclose material facts affecting the value or desirability of the property, “if it is known that such facts are not known to or within the reach of the diligent attention and observation of a buyer.” Calemine v. Samuelson, 171 Cal. App. 4th 153, 161-62 (2009). A fact is material if it has an effect on the value or desirability of the property. Alfaro v. Cmty. Hous. Improvement Sys. & Planning Ass'n, Inc., 171 Cal. App. 4th 1356, 1382 (2009).

However, as a residential landlord, the disclosure requirements to tenants are less broad and largely controlled by state law with mandated disclosures such as the Mold Addendum and the Bedbug Addendum.

There is very little law on point for landlord’s duties to disclose in a residential leasing context. This is likely due to the fact that the California Civil Code provides numerous protections for the residential tenant, such as their right to repair and deduct.

Recently in the news we have seen articles about people traveling with their miniature horses or their pigs. Perhaps you may be wondering why is the airline permitting the miniature horse on the plane? The answer breaks down like this: if it is a miniature horse, it is likely a service animal and if it is a pig, it is likely an emotional support animal.

Here is what the ADA says about Miniature Horses:

“In addition to the provisions about service dogs, the Department’s revised ADA regulations have a new, separate provision about miniature horses that have been individually trained to do work or perform tasks for people with disabilities. (Miniature horses generally range in height from 24 inches to 34 inches measured to the shoulders and generally weigh between 70 and 100 pounds.) Entities covered by the ADA must modify their policies to permit miniature horses where reasonable. The regulations set out four assessment factors to assist entities in determining whether miniature horses can be accommodated in their facility. The assessment factors are (1) whether the miniature horse is housebroken; (2) whether the miniature horse is under the owner’s control; (3) whether the facility can accommodate the miniature horse’s type, size, and weight; and (4) whether the miniature horse’s presence will not compromise legitimate safety requirements necessary for safe operation of the facility.”

In California, a landowner has no enforceable property rights to an unobstructed view. That means, you can’t force your downhill neighbor to trim their trees. However, I have seen the occasional CC&R’s from planned communities that restrict heights of trees, plantings, and structures to ensure that the homeowners can enjoy their view.In those circumstances, the restrictive covenants are strictly construed against the person seeking to enforce them. American jurisprudence favors alienability and free use of land so that will be the default legal view.

In the recent case of Eisen v. Tavangarian, the appellate court evaluated the CC&R language governing lots in the posh Marquez Knolls area in Pacific Palisades, California. The properties are nestled in the hills in this exclusive community overlooking Los Angeles and the Pacific Ocean. The homes are likely valued in excess of $4 million and accordingly the view of the ocean no doubt has some impact on the high property values.

In a recent opinion, the California Court of Appeal found that after foreclosure, all of the borrower’s leases (and its waivers) were assigned to the lender, and therefore unavailable as a defense to the former owner against a creditor. Therefore, the judgment creditor was successfully able to add two new parties to the judgment as the limitation the lease no longer shielded them.

Yolanda’s Inc. owns and operates restaurants. Yolanda entered into a lease to operate a restaurant at the Seabridge shopping center in Oxnard, California. The landlord K&G and Rocklin and its real estate broker KGCRE failed to inform the tenant that they were in negotiations to lease another space in the shopping center to the gym. The gym’s customers used all the parking spaces, resulting in loss of business for Yolanda’s. Yolanda’s prevailed in its lawsuit against the landlord, alleging among other causes of action, fraud and breach of lease. Yolanda obtained a judgment in the amount of almost 2 million dollars, plus another nearly half a million dollars in attorneys’ fees and costs.

In the recent case of Southern California Edison Company v. Severns, the written easement described a 4 foot wide easement for the placement of five electrical power poles. The instrument went on further to provide that the grantee should have “free access” to maintain the electrical equipment. This created dispute between the grantor and the utility company because of the unspecified routes the utility company would take on the grantor’s property to access the easement. The court determined that the easement was in fact a “floating easement”.

California’s Fourth Appellate District came down with an unsurprising opinion that because a real estate broker has a duty to their principal to share information he or she possesses that will adversely affect the value of her property, an expert opinion is not required to establish breach of that duty.

The Ryans listed their La Jolla California property with Sotheby’s. During one of the open houses, the listing agent learned from the neighbor that a major remodel was planned on the neighboring property that would obstruct the Ryan’s ocean view. The Ryan’s agent failed to inform the Ryans and subsequently when the Ryan’s sold the property the listing agent failed to inform the buyers. When the buyers learned that the $3.86 million home that they had just purchased was about to lose its ocean view and be subject to two years of construction next door, they unsurprisingly sought rescission of the purchase. 

Continuing the trend in California caselaw, an appellate court concluded that no, the trustee does not have duties beyond the deed of trust itself and the governing statutes.

California property developer citrus El Dorado LLC owed its lenders over $20 million in late 2014. Unsurprisingly, its lender Stearns Bank instructed the trustee, Chicago Title Company, to conduct a nonjudicial foreclosure sale of the real property secured by the deed of trust.

It is well-settled California law that land owners are required to maintain land in their possession and control in a reasonably safe condition. California courts look to what are called the “Rowland factors” to evaluate if a duty is owed beyond the principles of Civil Code section 1714:

• the foreseeability of harm to the plaintiff
• the degree of certainty that the plaintiff suffered injury
• the closeness of the connection between the defendant’s conduct and injury suffered
• the moral blame attached to the defendant’s conduct
• the policy of preventing future harm
• the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved.[1]

In the recent case of Williams v. Fremont Corners Inc., The Sixth Appellate District found that the defendant shopping center had no duty to take affirmative measures beyond those already found in the record to discover criminal activity on the premises.

In the recent case of RANCH AT THE FALLS, LLC v. Keith O’Neal et al., a ranch owner tried to establish prescriptive or equitable easement rights along private roads to reach her ranch. Ms. Hart prevailed at the trial court level but was not so fortunate on appeal. California’s second Appellate District concluded that Ms. Hart had failed to meet the hostility requirement to establish prescriptive easement.

Ms. Hart use the private roads from 2002 until 2012. However because Ms. Hart also owned several properties within the homeowners associations named in the lawsuit, she was personally entitled to use the private streets of the communities. The court cited Witkin, noting “Prescription cannot be gained if the use is permissive.”

The Ninth Circuit has expanded the scope of claims that are subject to arbitration clauses to include racial discrimination claims under 42 U.S.C. Section 1981. Lambert v. Tesla, 2019 U.S. App. LEXIS 14591.

In 2015, DeWitt Lambert, who is African American, began working as a production associate in Tesla’s Fremont, California factory. He claimed that during his employment other employees consistently harassed him and that he was not promoted because of his race. Lambert alleged that his complaints to human resources went nowhere.

One California Appellate Court Grants Marin County Neighbor Irrevocable Parol License But Denies Equitable Easement. Another Denies The Accommodation of a Trivial Expense.

by Julia M. Wei, Esq. and Alexander J. Lewicki, Esq.

Neighbor disputes over shared boundaries can arise over a misplaced fence, a shared driveway, or water rights. These claims are heavily fact-based and often the accuracy of the modern survey can only be overcome with meeting the elements for adverse possession or prescriptive easement.

In recent decades California courts have fashioned various remedies instead, such as the equitable easement and even the “irrevocable parol license” over someone else’s property.

After the subprime meltdown, sweeping legislation was enacted in an effort to protect Californian homeowners. HBOR cases have since trickled in over the last seven years with a new one regarding fees for borrowers who successfully halt a foreclosure sale with a temporary restraining order.

1.  A Prevailing Borrower Is Entitled to Attorney’s Fees After Obtaining a Temporary Restraining Order.

After the Monterossa case in 2015 which held that HBOR provided for award of attorney fees and costs when a preliminary injunction issues, it was logical to then wonder if the same would apply after the borrower obtains a TRO. A TRO is an early court order, one that is obtained on a one day ex-parte notice. It is often difficult for a loan servicer or lender to mobilize in time to oppose a temporary restraining order.

Owners who take title via a foreclosure sale must perfect their title before beginning eviction proceedings. This may seem obvious, but the issue was unresolved in California until just a couple of weeks ago. 

What is perfection of title? In this case, it is the recording of the Trustee’s Deed. Just being the successful bidder at sale is not enough to run down the courthouse to file an unlawful detainer.

Why is this an issue? Because of the 15 day retroactive language in Civil Code Section 2924h(c) which states the trustee’s sale “shall be deemed perfected as of 8 a.m. on the actual date of the sale if the trustee’s deed is recorded within 15 calendar days after the sale…” 

California real estate brokers are required to have a written contract with their clients to list a property for sale. A real estate commission is usually a percentage of the transaction, and with multi-million dollar San Francisco Bay area real estate values, the commission is often five or six figures.

In California, real estate often has multiple owners due to investment structure or inheritance of family property.

Co-owners of California real estate can hold title to the property as joint tenants or as tenant-in-common.  These two types of ownership have different legal ramifications and tax treatment.  However, under the law, each co-owner has equal rights to the property regardless of co-ownership percentage.

After the subprime meltdown, California enacted the Homeowner’s Bill of rights (HBOR) to amend the non-judicial foreclosure processes. Among the changes were to bar “dual-tracking” and require a 30 day pre-foreclosure communication period. Those changes sunset in 2019. SB818 reinstates certain provisions of the HBOR and Governor Jerry Brown signed the bill a few weeks ago. Most of the bills signed will go into effect Jan. 1, 2019. [https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB818]
 

The Southern District of New York Court ruled against the employees claim that both the Franchisor and the independent Franchisees were liable in a class action wage and hour claim In Re Domino’s Pizza.

Although the In Re Domino’s Pizza case does not control California courts decisions in wage and hour cases, the case is important because it is the first court to squarely address the issue of whether both franchisors and franchisees can be liable. Additionally, the New York District Court is generally quite influential, and the decision itself is thorough, clearly setting out it’s thought process and the law underpinning that thought process.

California employers should consider the routine use of arbitration agreements for employees, to avoid the risk of class action litigation. The United State Supreme Court in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018) upheld class action waivers contained in arbitration agreements. Just a week ago the Ninth Circuit Court of Appeals overruled the Northern District Court of California, specifically finding that arbitration agreements containing class action waivers are valid. See, O’Connor v. Uber Technologies, Inc., Case No. 14-16078.

TAKEAWAY⇒California employers should update their procedures, and consider implementing arbitration agreements for all employees, containing a specific class action waiver, in the form and style used in the Epic Systems, and Uber Technologies, Inc. cases, in order to assist in limiting risk of class action lawsuits by employees such as wage and hour claims, and meal and rest break litigation.

Parents' creditors failed to reach tuition payments made directly to their child's university in the recently published case of Lo v. Lee (Jun 27, 2018). This case is one the first decisions analyzing the The Uniform Voidable Transactions Act (Civ. Code, § 3439 et seq.) (formerly the Uniform Fraudulent Transfer Act).

In 2006, the Lo family made a loan to David Lee. Lee defaulted on the judgment and in 2013, Lo obtained a judgment in excess of $1.1M against Lee. Immediately after the amended judgment issued, Lee paid over $104k in tuition to Northeastern University on behalf of his son.

The Lo family sued under the Uniform Voidable Transfer Act alleging that the tuition payments for Lee’s son were made with the intent to “hinder, delay, or defraud” his creditors.