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Case Summaries

Contracts

[03/17] Willbros RPI, Inc. v. Continental Cas. Co.
In an action against an insurer seeking a declaratory judgment that defendant was required to provide defense and indemnity, partial summary judgment for plaintiff is affirmed where: 1) conduct that clearly fell outside of the professional services exclusion provides an independent "but for" cause of the injury; and 2) indemnity issues must await resolution of the underlying suit. However, the order is reversed in part where defendant-insurers' "Other Insurance" provisions conflicted and liability for defense of the underlying suit should thus be apportioned on a pro rata basis.

[03/17] Chandler v. State Farm Mut. Auto. Ins. Co.
In an action seeking car rental costs from an insurer arising out of an auto accident, dismissal of the complaint is affirmed where, under California law, an insurer is permitted to recoup a payout from a third-party tortfeasor's insurance company before the insured has sued the third-party tortfeasor, and without first making the insured whole.

[03/17] Buck v. Thomas M. Cooley Law Sch.
In plaintiff's lawsuit against her former law school claiming violation of the ADA and breach of various implied contracts, arising from her dismissal from the law school for falling below the required minimum G.P.A. of 2.0, dismissal of the lawsuit is affirmed where plaintiff is precluded by res judicata from raising the claims at issue as she should have supplemented her complaint in state court with claims that arose during the pendency of that suit.

[03/16] Pendergest-Holt v. Certain Underwriters at Lloyd's
In an action by various insureds, including R. Allen Stanford, each faced with civil and criminal allegations that they engaged in a massive Ponzi scheme, seeking reimbursement of defense costs under a directors' and officers' liability policy from the policy's underwriters, an injunction prohibiting defendant-insurers from withholding defense funds is affirmed with modifications and remanded, and the underwriters are enjoined from refusing to advance defense costs as provided for in the D&O Policy unless and until a court "determine[s] in fact" by clear and convincing evidence "that the alleged act or alleged acts [of Money Laundering] did in fact occur."

[03/15] Catlin Syndicate Ltd. v. Imperial Palace of Miss., Inc.
In a declaratory judgment action by an insurer seeking a declaration that the policy did not cover certain Hurricane Katrina-related losses, summary judgment for plaintiff is affirmed where the proper method for determining loss under the business-interruption provision was to look at sales before the interruption rather than sales after the interruption.

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Family Law

[03/17] Stewart v. Dep't of Servs. for Children, Youth & Their Families
In a consolidated appeal from a family court order terminating petitioner's parental rights and denying petitioner's aunt and mother's respective petitions for guardianship of petitioner's children, the order is affirmed where: 1) the family court did not abuse its discretion in finding that the expert testimony of court-appointed psychiatrists proved, by clear and convincing evidence, that petitioner was mentally incompetent; 2) the state made reasonable efforts to reunite the family; and 3) the family court's decision to deny the guardianship petitioners was supported by petitioners' mental health history and lack of financial resources.

[03/15] In re S.A.
Juvenile court's order declaring petitioner's daughter a dependent of the court under Welfare and Institutions Code section 300(d), following the court's true finding by clear and convincing evidence on the sexual molestation allegation by petitioner, is affirmed where: 1) petitioner's ineffective assistance of counsel claim fails as he lacks standing to assert the child's statutory right to be represented by competent counsel when that right is personal to the child; and 2) the petitioner's remaining contentions lack merit.

[03/11] Schaar v. Lehigh Valley Health Servs., Inc.
In plaintiff's suit against her former employer for violation of the FMLA, summary judgment in favor employer is vacated and remanded as an employee may satisfy her burden of proving three days of incapacitation through a combination of expert medical and lay testimony. Here, when expert medical opinion of a doctor that plaintiff was incapacitated for two days because of her illness is combined with plaintiff's lay testimony that she was incapacitated for two additional days, it necessarily follows that a material issue of fact exists as to whether plaintiff suffered from a serious health condition.

[03/11] A.H. v. Sup. Ct.
A father's writ of mandate seeking relief from a juvenile court order terminating his family reunification services and setting a permanency hearing is denied as the court correctly weighed and considered all relevant factors under all three code provisions, including the father's incarceration, in making its decision and the court's reasoning was logical and amply supported by the record.

[03/05] People v. Warwick
Conviction of defendant of child abuse and neglect and jury's true finding on the enhancement that she personally inflicted great bodily injury on her child is affirmed as, when she gave birth to her son in her bedroom and concealed the birth causing severe injuries, defendant inflicted great bodily injury on her child.

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Labor & Employment Law

[03/18] Bath Iron Works Corp. v. Fields
In plaintiff-employee's claim for disability benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA), petition for review of the Benefits Review Board's decision affirming an award of the plaintiff's disability benefits based on section 20(a) of the LHWCA, which provides that certain disabilities are presumed to be work-related in the absence of substantial evidence to the contrary, is denied as the Board correctly concluded that defendant had not produced "substantial evidence" to rebut the presumption of causation between plaintiff's working conditions and his pain.

[03/17] Service Employees Int'l. Union v. US
In an appeal of the IRS's assessment of penalties for the late filing of a return, a district court's order reducing the assessed penalty is reversed where penalties on tax exempt organizations for late filing of informational returns may not be reduced by district courts as a matter of discretion.

[03/17] Calvao v. Town of Framingham
In police officers' putative class action suit against a town claiming that the town failed to pay them sufficient overtime in violation of the FLSA, district court's grant of partial summary judgment holding that the town met the eligibility requirements for the public safety exception is affirmed where: 1) plaintiffs' argument that the town was required to notify affected employees before establishing a valid work period under section 207(k) is rejected; 2) the text of the statute, as well as caselaw, confirm that a public employer need only establish a section 207(k) compliant work period to claim the exemption's benefits without explicitly giving notice to affected employees, and here, the town has done so and is entitled to judgment; and 3) plaintiffs' claim that the district court abused its discretion by denying their motion to strike certain evidence is rejected.

[03/16] Acevedo v. Allsup's Convenience Stores, Inc.
In a class action against defendant-employer, seeking payment of unpaid wages and overtime under the Fair Labor Standards Act, the district court's ruling that plaintiffs' claims were improperly joined is affirmed where district courts have considerable discretion to deny joinder when it would not facilitate judicial economy and when different witnesses and documentary proof would be required for plaintiffs' claims. However, dismissal of the action is reversed where misjoinder was not an appropriate ground for dismissal.

[03/16] Schexnayder v. Hartford Life & Accident Ins. Co.
In an ERISA action claiming that defendant-insurer wrongly denied plaintiff disability benefits, summary judgment on the merits for plaintiff is affirmed where defendant's decision was procedurally unreasonable because the Social Security Administration (SSA) determined that plaintiff was fully disabled and unable to perform any work, but defendant did not address the SSA award in any of its denial letters. However, the district court's order granting plaintiff attorney's fees is reversed where the legal questions in this case were much closer than the district court credited, and the district court therefore abused its discretion in assessing attorneys' fees against defendant.

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Tax Law

[03/17] Service Employees Int'l. Union v. US
In an appeal of the IRS's assessment of penalties for the late filing of a return, a district court's order reducing the assessed penalty is reversed where penalties on tax exempt organizations for late filing of informational returns may not be reduced by district courts as a matter of discretion.

[03/17] US v. St. Pierre
Conviction of defendant for tax evasion and obstruction is affirmed where: 1) district court properly invoked the Rule 403 to exclude defendant's attempt to introduce expert testimony as to the standard of care owed to her by her accountants; and 2) defendant was not unduly limited in cross-examining government witnesses against her.

[03/17] Vainisi v. Comm'r of Internal Revenue
The Tax Court's holding that the petitioners were entitled to deduct only 80 percent of the expense that their QSub bank had incurred in borrowing money with which to buy qualified tax-exempt obligations is reversed where, for firms that have been S corporations for at least three years and so escape the "except" clause of section 291, the zero percent rule and the 80 percent rule are replaced by a 100 percent rule and all the interest expense incurred in acquiring qualified tax-exempt obligations is deductible. Here, petitioners' subchapter S holding company and QSub bank are such S entities, and the earlier of the two taxable years at issue in this case - 2003 - was six years after the petitioners' holding company converted from C to S corporate status.

[03/15] Grothenhuis v. County of Santa Barbara
Following a county's denial of trustee-plaintiff's appeal for an assessment reduction and tax refund, the trial court's tax refund judgment in favor of the trustee is reversed as the corporate alter ego theory, which is generally used to prevent a fraud and impute liability, like "only in narrowly defined circumstances and only when the ends of justice so require," and here, plaintiff cites no authority that the corporate alter ego theory may be invoked to gain a tax advantage in violation of section 69.5.

[03/10] Duffie v. US
In an action seeking a tax refund, summary judgment for the government is affirmed for the reasons stated by the district court, namely, that: 1) while a taxpayer's subjective business purpose or profit motive may be relevant to the sham transaction inquiry, the lack of a subjective profit motive is not required to assess interest at the enhanced rate under 26 U.S.C. section 6621(c); and 2) a partner may not relitigate the tax court's determination that the partnership transactions resulting in the adjustments were factual or economic shams, that is, tax-motivated transactions as defined in section 6621(c).

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Commercial Law

[03/18] Desert Outdoor Adver., Inc. v. Oakland
In an action claiming that the city of Oakland's billboard ordinances violated the First Amendment, denial of plaintiff's motion to clarify the district court's prior declaratory judgment partially invalidating the ordinances is affirmed where, contrary to plaintiff's assertions, the declaratory judgment could not reasonably be understood to have struck down the entire scheme of sign-regulation.

[03/15] Kim v. Carter's Inc.
In plaintiffs' suit against a children's clothing retailer for damages under Illinois contract and consumer protection law, claiming they were victims of deceptive pricing, dismissal of the complaint is affirmed where: 1) with respect to plaintiffs' breach of contract claim, defendant has fulfilled its obligations under the straightforward, everyday sales contract described in the complaint; and 2) plaintiffs' allegations fail to establish the actual damages element of their Illinois Consumer Fraud and Deceptive Business Practice Act (ICFA) claim.

[03/11] Coyote Publishing, Inc. v. Miller
In a facial First Amendment challenge to restrictions on advertising by legal brothels, summary judgment for plaintiffs is reversed where the advertising restrictions targeted pure commercial speech, and there were strong reasons why the sale of sexual services, in particular, ought to be treated differently than other advertising bans on "vice" activities.

[03/10] American Signature, Inc. v. US
In proceedings involving an importer of furniture that is subject to a 2005 antidumping duty order on certain entries of wooden bedroom furniture from China, a decision of the Court of International Trade denying plaintiff's motion for a preliminary injunction is reversed as plaintiff has satisfied the requirements for a preliminary injunction, and therefore, the Court of International Trade is directed to grant the preliminary injunction prohibiting Customs or Commerce from taking any action to liquidate or reliquidate import entries that are the subject of this action.

[03/10] Citigroup Global Markets, Inc. v. VCG Special Opportunities Master Fund Ltd.
In an appeal from a district court's order granting plaintiff's motion for a preliminary injunction and enjoining defendant from proceeding with an arbitration initiated against plaintiff before the Financial Industry Regulatory Authority, the order is affirmed where the "serious questions" standard for assessing a movant's likelihood of success on the merits remains valid in the wake of recent Supreme Court cases, and neither the district court's assessment of the facts nor its application of the law supported a finding of abuse of discretion.

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Corporation & Enterprise Law

[03/18] In re: Condor Ins. Ltd.
In an action by persons appointed Joint Official Liquidators of a Nevis corporation in a Nevis bankruptcy proceeding, alleging Nevis law claims against a related U.S. entity, the district court's affirmance of the bankruptcy court's order dismissing the complaint is reversed where a bankruptcy court has jurisdiction to offer avoidance relief under foreign law in a Chapter 15 bankruptcy proceeding.

[03/17] Vainisi v. Comm'r of Internal Revenue
The Tax Court's holding that the petitioners were entitled to deduct only 80 percent of the expense that their QSub bank had incurred in borrowing money with which to buy qualified tax-exempt obligations is reversed where, for firms that have been S corporations for at least three years and so escape the "except" clause of section 291, the zero percent rule and the 80 percent rule are replaced by a 100 percent rule and all the interest expense incurred in acquiring qualified tax-exempt obligations is deductible. Here, petitioners' subchapter S holding company and QSub bank are such S entities, and the earlier of the two taxable years at issue in this case - 2003 - was six years after the petitioners' holding company converted from C to S corporate status.

[03/15] Service Employees Int'l Union v. Nat'l Union of Healthcare Workers
In an action by a parent and local affiliate union seeking injunctive relief to obtain restoration of properties it alleged were illegally taken by the former officers and leaders of the local union, who formed a rival union, the district court's grant of a temporary restraining order (TRO) is affirmed where: 1) the TRO was an appealable order and thus the court of appeals had jurisdiction to review it; 2) in its subsequent preliminary injunction, the district court explicitly preserved a portion of the TRO as still effective after issuance of the injunction, so the appeal was not moot; and 3) the district court's jurisdiction was proper under 29 U.S.C. section 185(a) because providing a federal forum for injunctive relief against the former officers and leaders of the union promoted the stability of the parent-local relationship and the representation of rank-and-file members.

[03/15] Grothenhuis v. County of Santa Barbara
Following a county's denial of trustee-plaintiff's appeal for an assessment reduction and tax refund, the trial court's tax refund judgment in favor of the trustee is reversed as the corporate alter ego theory, which is generally used to prevent a fraud and impute liability, like "only in narrowly defined circumstances and only when the ends of justice so require," and here, plaintiff cites no authority that the corporate alter ego theory may be invoked to gain a tax advantage in violation of section 69.5.

[03/10] Sec. & Exch. Comm'n v. Tambone
In SEC's action against executives of a registered broker-dealer for allegedly allowing certain preferred customers to engage in market timing, district court's dismissal of the SEC's Rule 10b-5(b) claim is affirmed as the SEC's expansive interpretation of "make" as used in Rule 10b-5(b) is inconsistent with the text of the rule and with the ordinary meanings of the phrase "to make a statement," inconsistent with the structure of the rule and relevant statutes, and in considerable tension with Supreme Court precedent. (En Banc opinion)

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Probate Trusts

[02/25] Conservatorship of John L.
In a petition to establish a conservatorship of a person pursuant to the Lanterman-Petris-Short Act, the judgment of the court of appeal is affirmed where: 1) the superior court did not violate the LPS Act when it excused the individual's production and proceeded without him in attendance at a hearing to establish a conservatorship of his person; and 2) the superior court did not violate his due process rights.

[02/25] Donahue v. Donahue
Trial court's order, charging a trust with some $5 million in past and ongoing attorney fees incurred on behalf of a former trustee in defending against the beneficiary's allegations of self-dealing and conflict of interest is reversed as it cannot be determined from the trial court's order whether the fee awards are consistent with applicable legal principles. Long-established principles of trust law impose a double-barreled reasonableness requirement where: 1) the fee award must be reasonable in amount and reasonably necessary to the conduct of litigation; and 2) it also must be reasonable and appropriate for the benefit of the trust.

[02/11] Estate of Tolman
Denial of a granddaughter's petition to determine persons entitled to distribution from her grandmother's estate is affirmed as the exclusion of unmentioned heirs or relatives from the will's dispositions, or an intent to disinherit those who contest those dispositions, does not sufficiently express or manifest an intent to arrest the operation of the anti-lapse law following a legatee's death.

[01/29] Estate of Artall v. Comm'r. of Int'l. Rev.
In the taxpayer's appeal from the tax court's approval of the IRS Commissioner's disallowance of a "qualified family-owned business interest" estate tax deduction to the taxpayer estate, the tax court's order is affirmed where the "qualified family-owned business interest" deduction of 26 U.S.C. section 2057 is available for an estate's qualifying equity or ownership interests but not for debt interests such as loans receivable.

[01/15] Carroll v. Carroll
In an action seeking to remove a trustee of an irrevocable trust, the judgment of the court of appeals is reversed and the judgment of the county court vacated as the county court at law had no jurisdiction to grant the relief sought and the judgment it rendered was void because the Texas Property Code vests exclusive jurisdiction over the claims in the case in the district court.

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Property Law & Real Estate

[03/17] Holmes v. Kimco Realty Corp.
In plaintiff's negligence suit against a retailer for injuries he sustained when he fell on ice/snow in the parking lot, summary judgment in favor of the defendant is affirmed as the state of New Jersey would not impose a duty on an individual tenant for snow removal from the common areas of a multi-tenant parking lot when the landlord has retained and exercised that responsibility.

[03/16] Quigley v. Winter
In a sexual harassment action against plaintiff's landlord under the Fair Housing Act, judgment for plaintiff is affirmed in part where: 1) defendant could not show "a complete absence of probative facts" supporting the jury's verdict and that no reasonable jury could have found in plaintiff's favor; 2) the jury could reasonably infer that defendant was telling plaintiff the return of her deposit was conditioned upon defendant seeing more of plaintiff's body or even receiving a sexual favor; and 3) even if the admission of evidence regarding a government investigation of defendant was an error, any possible prejudice was cured by the district court's instruction. However, the judgment is reversed in part where the district court erred in the degree to which it reduced the jury's punitive damage award failed to conduct a proper analysis of plaintiff's entitlement to attorney fees.

[03/15] MHC Fin. Ltd. P'ship Two v. City of Santee
In plaintiff's suit against a city concerning the city's mobilehome rent control ordinances, the judgment of the trial court is affirmed as the court properly ruled that plaintiff was not entitled to damages where: 1) plaintiff has not established that the trial court erred in ruling that plaintiff did not suffer any legally remediable injury due to the retroactive application of the ordinance at issue; and 2) trial court correctly ruled that plaintiff may not recover damages for the city's violation of its right to petition under the California Constitution.

[03/15] Grothenhuis v. County of Santa Barbara
Following a county's denial of trustee-plaintiff's appeal for an assessment reduction and tax refund, the trial court's tax refund judgment in favor of the trustee is reversed as the corporate alter ego theory, which is generally used to prevent a fraud and impute liability, like "only in narrowly defined circumstances and only when the ends of justice so require," and here, plaintiff cites no authority that the corporate alter ego theory may be invoked to gain a tax advantage in violation of section 69.5.

[03/15] In the Matter of Goldstein
In an attorney disciplinary proceeding, the Delaware Supreme Court finds that a public reprimand was the appropriate sanction for respondent-attorney where a lawyer's ethical duties under the Interpretive Guideline for Rule 1.16 of the Delaware Lawyers' Rules of Professional Conduct arise any time a lawyer is representing an interested party in a residential real estate transaction, and the borrower or mortgagor is not represented by counsel, and respondent violated Rule 1.16 by failing to provide timely written disclosure to the borrowers.

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Banking Law

[03/10] Anchor Sav. Bank, FSB v. US
In one of the last Winstar cases arising out of the savings and loan crisis of the late 1970s and early 1980s, involving a plaintiff's suit alleging that the adoption of the FIRREA and its implementing regulations breached the government's obligations under supervisory merger contracts, judgment of the trial court in favor of the plaintiff is affirmed in part and remanded in part where: 1) the trial court did not commit clear err in finding that it was foreseeable that the breach would result in lost profits to plaintiff in an amount commensurate with the ultimate award for lost profits; 2) the trial court did not err in finding of a causal connection between the government's breach of contract and plaintiff's sale of RFC (a mortgage banking company); 3) the trial court did not err in awarding lost profit damages attributable to plaintiff's forced sale of RFC; 4) the trial court permissibly concluded that NAMCO (mortgage company) was a reasonable commercial substitute for RFC, and its purchase thus qualified as mitigation for the loss of RFC; but 5) the case is remanded to allow the trial court to determine whether an error was made in offsetting plaintiff's mitigation costs by NAMCO's retained earnings through 1997 and, if so, how to correct the error.

[03/09] Martinez v. Wells Fargo Home Mortgage, Inc.
In an action under Section 8(b) of the Real Estate Settlement Procedures Act (RESPA), and California's Unfair Competition Law (UCL), claiming that a mortgage lender charged plaintiffs an illegal underwriting fee, dismissal of the complaint is affirmed where: 1) the clear and unambiguous language of RESPA Section 8(b) did not reach the practice of "overcharging"; and 2) the UCL claims alleging "unfair" and "fraudulent" conduct were preempted by the National Bank Act, and the allegations of "illegal" conduct failed to state a claim.

[03/02] Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc.
In an action against Merrill Lynch based on unauthorized transfers from plaintiff's investment account, summary judgment for defendant is affirmed where New York U.C.C. Section 4-A-505, which imposes a one-year statute of repose on certain claims based on electronic funds transfers, bars plaintiffs' common law claims, which had longer limitations periods.

[02/26] Williams v. Fleming
In plaintiff's suit against a bank, the US, and and an FDIC associate examiner, claiming that the associate examiner's racially motivated bias against plaintiff and other African-Americans was the reason he stopped receiving loans from the bank, dismissal of all claims including the Bivens suit against the associate examiner is affirmed where, because the dismissal of plaintiff's suit against the US was on the merits, and not for lack of subject matter jurisdiction, his remaining Bivens suit was properly barred by section 2676 of the FTCA.

[02/09] US v. Harris
Defendants' sentences for bank fraud and conspiracy to traffic in or use unauthorized access devices are affirmed in part where: 1) the district court did not clearly err in calculating one defendant's intended loss as being equal to the credit limits of the credit cards she compromised; and 2) a defendant's sentence may be enhanced where his crime recklessly jeopardizes property, even if that property survives the crime intact. However, one defendant's sentence is vacated in part where the district court erred by enhancing his sentence four levels based on its finding that his offense had involved fifty or more victims, because only eight of the sixty-three financial institutions identified as victims by the district court suffered an actual loss.

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