The Judicial Council of California, (JCC) entered into a contract with Jacobs Facilities, a wholly owned subsidiary of Jacobs. Performance of the contract required a license under the Contractors’ State License Law. Facilities was properly licensed when it commenced work. Later, Jacobs, as part of a corporate reorganization, transferred the employees responsible for the JCC contract to another subsidiary and caused the new subsidiary to obtain a contractor’s license, while permitting the Facilities license to expire. Facilities remained the signatory on the JCC contract until a year later, when the parties entered into an assignment to the new, licensed subsidiary. JCC sued under Bus. & Prof. Code 7031(b), which requires an unlicensed contractor to disgorge its compensation. Defendants contended that Facilities had “internally” assigned the contract to the new subsidiary prior to expiration of its license; JCC ratified the internal assignment when it consented to the assignment to the new subsidiary; and Facilities had “substantially complied” with the law. After the jury found for defendants on the other defenses, the substantial compliance issue was not decidedd. The court of appeal reversed, concluding Facilities violated the statute when it continued to act as the contracting party after its license expired, and remanded for a hearing on substantial compliance. View "Judicial Council of Cal. v. Jacobs Facilities, Inc." on Justia Law

Rocio Trujillo's home loan was secured by a deed of trust encumbering the home. She defaulted, and Northwest Trustee Services Inc. (NWTS), the successor trustee, sent a notice of default and scheduled a trustee's sale of her property. NWTS had a beneficiary declaration from Wells Fargo Bank. RCW 61.24.030(7)(a) (part of the Deeds of Trust Act) required that a trustee not initiate such a nonjudicial foreclosure without "proof that the beneficiary [of the deed of trust] is the owner of any promissory note ... secured by the deed of trust," and must include "[a] declaration by the beneficiary made under the penalty of perjury stating that the beneficiary is the actual holder of the promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this subsection." NTWS' declaration did not contain that specific statutory language. Instead, it stated under penalty of perjury, "Wells Fargo Bank, NA is the actual holder of the promissory note . . . or has requisite authority under RCW 62A.3-301 to enforce said [note]" (This declaration language differed from the language of RCW 61.24.030(7)(a), by adding the "or" alternative). Following the Washington Supreme Court's decision in "Lyons v. U.S. Bank National Ass 'n," (336 P.3d 1142 (2014)), the Court held in this case that a trustee could not rely on a beneficiary declaration containing such ambiguous alternative language. The Court found that Trujillo alleged facts sufficient to show that NWTS breached the DTA and also to show that that breach could support the elements of a Consumer Protection Act (CPA) claim. However, her allegations did not support a claim for intentional infliction of emotional distress or criminal profiteering. The Court therefore reversed in part and remanded for trial. View "Trujillo v. Nw. Tr. Servs., Inc." on Justia Law

Insurer issued an automobile policy to Philip Laboy as the named insured. The policy provided that Insurer would pay “any negotiated reduced rate accepted by a medical provider.” Three members of Laboy’s family, also insureds under the policy, were involved in an automobile accident. The Laboys submitted some of their medical bills both to Insurer and to their health-insurance provider. The Laboys later reached a settlement with the third-party tortfeasor. When Insurer exercised its contractual right to subrogation against the Laboys, the Laboys objected, arguing that Insurer had overpaid the medical providers. As evidence, the Laboys showed that Insurer had paid discounted rates to medical providers totaling $1,441 in medical expenses but that their own health insurer paid only $648 for those same medical expenses. The Laboys filed a class-action lawsuit against Insurer, alleging claims for breach of contract and breach of good faith and fair dealing. The trial court entered summary judgment for Insurer. The Supreme Court agreed with the trial court’s judgment, holding that the only reasonable interpretation of the policy is that “any negotiated reduced rate accepted by a medical provider” means a negotiated reduced rate that Insurer was contractually entitled to pay and does not include the reduced rates negotiated by the Laboys’ health-insurance provider. View "Laboy v. Grange Indem. Ins. Co." on Justia Law

Client advanced Attorney funds to cover attorney’s fees in litigation. After Client terminated the representation, Attorney refused to return the unearned attorney’s fees. Attorney demurred on the ground that the lawsuit was barred by Cal. Civ. Proc. Code 340.6(a), which sets forth a one-year limitations period for actions against an attorney for a “wrongful act or omission” arising in the performance of “professional services.” The trial court sustained the demurrer, concluding that section 340.6(a) applied to Client’s claims and that she filed her complaint more than one year after Attorney informed her that he would not return her money. The Court of Appeals reversed the trial court’s order sustaining Attorney’s demurrer. The Supreme Court affirmed, holding (1) section 340.6(a) applies to a claim when the merits of the claim will necessarily depend on proof that an attorney violated a professional obligation in the course of providing professional services; and (2) in this case, Client’s complaint could be construed to allege a claim for conversion whose ultimate proof at trial may not depend on the assertion that Attorney violated a professional obligation. View "Lee v. Hanley" on Justia Law

Castro-Cortes was working for Astro, a subcontractor of JRJ, when he fell through a hole on the jRJ property. He sued JRJ for personal injury in Illinois state court. After being served in that suit, JRJ’s two members, Panfil and Michelon, filed a report with Nautilus under a general commercial liability policy. Nautilus refused to defend, citing three grounds: that the underlying lawsuit was against JRJ, but the named insureds were Panfil and Michelon; the “Contractor-Subcontracted Work Endorsement;” and the “Employee Exclusion.” The JRJ parties filed a federal suit for breach of contract. On summary judgment, the district court determined that Nautilus breached its duty to defend because there was at least the potential for coverage of the underlying lawsuit. The Seventh Circuit affirmed, stating that it is a close case and that the bar to finding a duty to defend is low. The court construed the language of the exclusions in favor of JRJ, noting that the burden of proving that a claim falls within an exclusion rests on the insurer. View "Panfil v. Nautilus Ins. Co." on Justia Law

Keith Randall Sparkman filed a complaint against CONSOL Energy, Inc. (CONSOL) and CONSOL of Kentucky, Inc. (CKI), as well as certain individuals, for breach of contract and tortious interference with contract. The jury found in favor of Sparkman and awarded damages. CONSOL/CKI appealed, and Sparkman cross-appealed. The court of appeals disposed of the matter sua sponte based on a perceived lack of jurisdiction. Because the contracts at issue in this dispute were entered into by In-Depth Sanitary Service Group (Group), a sole proprietorship not named in the complaint, and because the judgment was in favor of Group, a “non-party,” the court of appeals reversed and remanded the cause to the circuit court for further proceedings and any “appropriate corrective action.” The Supreme Court reversed, holding (1) the trial court’s judgment identified the correct party because the parties mutually consented to the amendment of the complaint to reflect Keith Randall Sparkman d/b/a In-Depth Sanitary Service Group; and (2) the naming of the parties in the notice of cross-appeal was sufficient to transfer jurisdiction to the court of appeals. View "Sparkman v. Consol Energy, Inc." on Justia Law

Siouxland, a group practice of obstetrician-gynecologists, terminated Hagen, its President and an equity owner, invoking the for-cause termination provision in Hagen’s 1993, Employment Agreement, after an incident during which Hagen yelled at Dr. Eastman (another Siouxland doctor) and hospital staff, accusing them of neglecting a patient, resulting in a stillbirth. Hagen also reported the incident to hospital administration and told the Siouxland partners that he was considering reporting to the Iowa state medical board. Hagen advised the patient to sue for malpractice. Hagen filed suit, alleging wrongful retaliatory discharge in violation of Iowa public policy. The other doctors testified about Hagen’s history of workplace conflicts and outbursts and about concern that his suspension by the hospital would hurt the reputation of the practice. A jury awarded Hagen $1,051,814 in compensatory damages. The Eighth Circuit reversed, holding that Hagen failed to prove he was an at-will employee who may assert a tort claim for wrongful discharge in violation of public policy. The exclusive remedy of a medical professional practicing under Hagen’s Employment Agreement would be a breach of contract claim, which would permit inquiry into the professional conduct the district court found separately protected by the tort of wrongful termination in violation of public policy. View "Hagen v. Siouxland Obstetrics & Gynecology, PC" on Justia Law

Plaintiff, a real estate developer, alleged that WMATA signed a contractually binding Term Sheet preliminarily selecting plaintiff to develop property above a Metrorail station and giving plaintiff the exclusive right to negotiate a final development agreement. Plaintiff filed suit raising claims related to its allegation that one of WMATA's Board Members, Jim Graham, abused his position and his seat on the Council of the District of Columbia to work behind the scenes with one of plaintiff’s rival bidders to derail WMATA's negotiations with plaintiff. The court concluded that plaintiff adequately stated both contract claims for breach of the exclusivity provision and breach of the implied covenant of good faith and fair dealing. Further, plaintiff adequately stated its claim of tortious interference and conspiracy against plaintiff's rival bidder. The court reversed as to these claims. The court affirmed the district court’s dismissal of plaintiff’s claim for fraud against WMATA because it is barred by sovereign immunity. The court held that Graham failed to bear his burden to establish the scope of his official duties and to situate his conduct within its outer perimeter. Therefore, the court vacated the district court’s dismissal and remanded for the district court to consider in the first instance which of Graham’s other actions fell beyond the outer perimeter of his official duties and whether those actions that did fall beyond the outer perimeter, taken together, state claims against Graham for tortious interference and civil conspiracy. The court vacated the district court’s dismissal of plaintiff's claims against Graham and remanded for further consideration. View "Banneker Ventures, LLC v. Graham" on Justia Law

This case stemmed from alleged acts of pre-leasing housing discrimination that resulted in alleged emotional distress. At the relevant time, the defendants in the underlying case (“Insureds”) were covered under an umbrella insurance policy issued by Insurer. After Insureds settled the underlying case, Insureds sued Insurer for breach of contract for failing to defend Insureds pursuant to the umbrella policy. A federal trial court granted summary judgment in favor of Insurer on its duty to defend and indemnify Insureds under the umbrella policy. The federal court of appeals reversed. At issue before the Supreme Court was whether the umbrella policy’s intentional-acts exclusion - through application of the inferred-intent doctrine - obviated Insurer’s duty to defend in this case. The Supreme Court affirmed, holding (1) the umbrella policy at issue here arguably provides coverage for emotional-distress damages through its coverage for humiliation; and (2) emotional-distress damages are not inherent in a claim for discrimination, and therefore, the inferred-intent doctrine was inapplicable. View "Granger v. Auto-Owners Ins." on Justia Law

Bible defaulted on a loan under the Federal Family Education Loan Program, but entered into a rehabilitation agreement. She remains current on her reduced payments, but a guaranty agency assessed $4,500 in collection costs. Bible’s loan terms were governed by a Stafford Loan Master Promissory Note (MPN), approved by the Department of Education, incorporating the Higher Education Act, and providing for “reasonable collection fees and costs” in default, as defined by regulations promulgated under the Act. Bible sued, alleging breach of contract and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961, arguing that federal regulations prohibit assessment of collection costs and that the guaranty agency committed mail fraud and wire fraud in assessing collection costs despite its representations that her “current collection cost balance” and “current other charges” were zero. The court dismissed, finding both claims “preempted” by the Higher Education Act, which permits collection costs and that Bible had not shown “a scheme to defraud; commission of an act with intent to defraud; or the use of mails or interstate wires in furtherance of a fraudulent scheme.” The Seventh Circuit reversed. The contract claim does not conflict with federal law. The Secretary of Education interprets the regulations to provide that a guaranty agency may not impose collection costs on a borrower who is in default for the first time and has complied with an alternative repayment agreement. Bible’s RICO claim is not preempted. View "Bible v. United Student Aid Funds, Inc." on Justia Law