CALIFORNIA COURTS OF APPEAL 

Arbitration

Castelo v. Xceed Financial Credit Union (2023) _ Cal.App.5th _ , 2023 WL 3515225: The Court of Appeal affirmed the trial court’s order denying a motion to vacate the arbitration award and it’s judgment confirming the arbitration award. Plaintiff sued her former employer for wrongful termination and age discrimination in violation of the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.) The case was submitted to binding arbitration pursuant to the stipulation of the parties. The arbitrator granted defendant’s motion for summary judgment on the basis that plaintiff’s claims were barred by a release in her separation agreement. The Court of Appeal concluded that the arbitrator correctly ruled the release did not violate Civil Code section 1668. Plaintiff signed the separation agreement after she was informed of the decision to terminate her but before her last day on the job. At the time she signed, she already believed that the decision to terminate her was based on age discrimination and that she had a valid claim for wrongful termination. The alleged violation of FEHA had already occurred, even though the claim had not yet fully accrued. Accordingly, the release did not violate section 1668 because it was not a release of liability for future unknown claims. (C.A. 2nd, May 18, 2023.) 

Attorney Fees

The Kennedy Com. v. City of Huntington Beach (2023) _ Cal.App.5th _ , 2023 WL 3372378: The Court of Appeal affirmed the trial court’s award attorney fees of $3,531,201.10 in favor of petitioner/plaintiff for litigation it filed and pursued pertaining to defendant’s housing element plan under California’s Housing Element Law (Gov. Code, § 65580 et seq.). Plaintiff’s writ petition alleged that changes that respondent made to its housing element violated respondent’s Regional Housing Needs Allocation (RHNA) of lower-income housing mandated by California. The parties engaged in protracted litigation and appeals. Petitioner ultimately filed a first amended writ petition and complaint for declaratory relief, and respondent then adopted amendments to its housing element to meet its RHNA. The parties then stipulated to dismissal of the action but agreed that petitioner could pursue attorney fees. The trial court properly awarded attorney fees under Code of Civil Procedure section 1021.5, awarding $2,522,286.50 in fees and included a 1.4 multiplier, for a total award of $3,531,201.10. (C.A. 4th, May 11, 2023.)

Civil Code

Shetty v. HSBC Bank USA, N.A. (2023) _ Cal.App.5th _ , 2023 WL 3521861: The Court of Appeal affirmed in part, and reversed in part, the trial court’s order sustaining defendants’ demurrer, without leave to amend, to plaintiff’s action alleging wrongful foreclosure. Plaintiff purchased a home that had been foreclosed upon by a homeowners association, but it was also still subject to a defaulted mortgage and deed of trust between the bank and the original borrower. Defendants, the bank and mortgage servicer, recorded a notice of default and scheduled a foreclosure sale. Plaintiff sought to cure the default and resume regular payments on the loan but defendants refused, insisting that, as a stranger to the loan, plaintiff was not entitled to reinstate it. The trial court sustained the demurrer on the basis that plaintiff did not have standing under Civil Code section 2924c. The Court of Appeal disagreed, concluding that plaintiff did have standing under section 2924c. However, because plaintiff agreed on appeal that defendant Mortgage Electronic Registration Services, Inc. (MERS) did not have any liability, the Court of Appeal affirmed the judgment as to MERS. (C.A. 4th, May 18, 2023.)

Civil Procedure

Madrigal v. Hyundai Motor America (2023) _ Cal.App.5th _ , 2023 WL 2883009: The Court of Appeal reversed the trial court’s order denying defendant’s motion to strike or tax plaintiff’s costs, denying defendant’s opposition to plaintiff’s motion for attorney fees, and awarding plaintiff $81,142.50 in attorney fees and $17,681.05 in costs and expenses. Defendant served two Code of Civil Procedure section 998 offers to plaintiff, and both were rejected by plaintiff. Early in the trial, the parties’ attorneys agreed to recite the terms of the stipulated settlement on the record pursuant to section 664.6, explaining that these recitals would be the entirety of the settlement release in terms of the agreement, and the trial court confirmed the settlement. When plaintiff requested fees and costs, defendant opposed this request on the basis that the stipulated settlement was for less than defendant’s second 998 offer to plaintiff. Ruling on an issue of first impression, the Court of Appeal concluded that the terms of the stipulated settlement under section 664.6 constituted a judgment within the meaning of Code of Civil Procedure section 998(c) and that the trial court should have examined the parties’ entitlement to costs and attorney fees through the lens of that statute. (C.A. 3rd, April 11, 2023.)

Torts

Bidari v. Kelk (2023) _ Cal.App.5th _ , 2023 WL 3113583: The Court of Appeal affirmed the trial court’s order granting defendant’s motion for judgment on the pleadings as to plaintiffs’ complaint for malicious prosecution. The operative complaint alleged that defendant falsely reported to law enforcement that plaintiffs had attacked her, that police arrested plaintiff Yousseff Mikhail (Mikhail) on this basis, and that Mikhail had to post bail to be released. It further alleged that defendant’s false reports led to a law enforcement investigation, at the conclusion of which the district attorney declined to press charges. The trial court properly concluded that the operative complaint did not sufficiently allege a malicious prosecution claim because such a claim requires an adjudicative proceeding. The Court of Appeal concluded that plaintiffs were not entitled to amend their complaint to add causes of action they had voluntarily dismissed earlier in the litigation because they offered no explanation for their years-long delay in seeking to do so, nor were plaintiffs entitled to add an abuse of process claim they had not previously alleged, because that claim was time-barred and did not relate back to the sole cause of action in the operative complaint. (C.A. 2nd, April 27, 2023.) n