California Law Update – August 2016

September 18, 2016Law Updates

August case law of interest refer to a variety of legal issues involving: Offers to Compromise, Jurisdiction, Application of MICRA Statutes, Expert Witness Qualification and Anti-SLAPP motions.

At least one of the reported cases is worthy of special mention:

In Ignacio v. Caracciolo (California Court of Appeal, Second District), the court ruled that a defendant’s statutory offer to compromise pursuant to California Code of Civil Procedure section 998 offer was invalid if it required plaintiff to execute a release of claims beyond those pertaining to the action in which the 998 offer was made.

The seminal case of Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899 allowed a 998 offer to shift costs though the offer required a California Civil Code section 1542 waiver and a release of unknown claims arising from the incident giving rise to the suit. In Ignacio, the 998 offer also required a release of all claims the plaintiff might have whether or not connected with the incident giving rise to the suit. Accordingly, the trial court properly held the 998 offer invalid and refused to shift costs even though the plaintiff recovered less by judgment than the monetary amount of the 998 offer.

  1. (Anti-SLAPP) Anti-SLAPP motion applied to ‘mixed’ causes of action containing allegations of both protected and unprotected activity. Baral v. Schnitt. (No. S225090, Ct. App. 2/1 B253620, Los Angeles County Super. Ct. No. BC475350, California Supreme Court, August 1, 2016).
  2. (Offers to Compromise) Defendant may not recover costs under Code of Civil Procedure Section 998’s cost-shifting provision because her pretrial Section 998 settlement offer was invalid. Ignacio v. Caracciolo. (No. B266930, Los Angeles County Super. Ct. No. BC511878, California Courts of Appeals, Second Appellate District, Division Eight, August 3, 2016).
  3. (MICRA) MICRA does not apply to negligence action filed against paramedic supervisor who was involved in a collision while in route to injured victim. Aldana v. Sillwagon. (2d Civil No. B259538, Super. Ct. No. 56-2013-00440994-CU-PA-VTA, California Courts of Appeal, Second Appellate District, Division Six, Ventura County, August 3, 2016).
  4. (Expert Witnesses) Summary judgment in favor of doctor reversed where court abuses discretion in excluding declaration of plaintiff’s expert witness because he did not practice medicine in the United States. Borrayo v. Avery. (No. A143765, San Francisco County Super. Ct. No. CGC12525769, California Court of Appeal, First Appellate District, Division One, August 10, 2016).
  5. (Hospital Transfers) Care provider required to readmit resident upon first availability of open bed under 42 Fed. Code of Regulations Section 483.12 despite hospital transfer order from contracted physician. St. John of God Retirement & Care Center v. Department of Health Care Services (Woods). (No. B265488, Los Angeles County Super. Ct. No. BS148766, California Court of Appeals, Second Appellate District, Division Four, August 17, 2016).
  6. (Jurisdiction) Bristol-Myers’ substantive operations in California sufficient to confer specific jurisdiction, allowing nonresidents to pursue products liability claims involving the drug Plavix. Bristol-Myers Squibb, Co. v. Superior Court (Anderson). (No. S221038, Ct. App. 1/2 A140035, San Francisco County Super. Ct. JCCO No. 4748, Supreme Court of California, August 29, 2016).

The above referenced matters have come to our attention during the last month. We thought you might be interested in a brief summary of these matters. Please let us know if you would like to receive a copy of any of these recently reported court decisions.

  1. (Anti-SLAPP) Anti-SLAPP motion applied to ‘mixed’ causes of action containing allegations of both protected and unprotected activity. Baral v. Schnitt. (No. S225090, Ct. App. 2/1 B253620, Los Angeles County Super. Ct. No. BC475350, California Supreme Court, August 1, 2016).
  2. Plaintiff brought suit against defendant for breach of fiduciary duty, constructive fraud, negligent misrepresentation, and declaratory relief regarding actions taken during the selling of a company they had owned and managed together. Plaintiff alleged that defendant had excluded him from an accounting investigation charged with determining whether any of the company’s assets had been misappropriated. Plaintiff also alleged that the defendant gave the accounting firm false information about him. Defendant filed an anti-SLAPP motion to strike all references to the accounting audit. The trial court denied the motion because the motion pertained only to the isolated allegations, not to the entire cause of action. The Court of Appeal upheld the ruling.

    The California Supreme Court reversed and remanded the matter to the trial court.

    The decision by the California Supreme Court resolved a highly contested issue within the appellate courts involving whether a “mixed” cause of action (i.e. one that alleges both protected and non-protected activity) is subject to an anti-SLAPP motion.

    The California Supreme Court concluded that it did. The California Supreme Court found that the Mann v. Quality Old Time Service, Inc., which held that a cause of action that arose from both protected and unprotected activity would lead to a denial of an anti-SLAPP motion if plaintiff could show a probability of prevailing on any part of its claim. The California Supreme Court found that the Mann decision was contrary to the underlying purpose of the anti-SLAPP motion, that is, to screen out meritless claims that arise from protected activity. Thus, the defendant’s motion should not have been denied on the basis that it arose from individual allegations within the cause of action.

  3. (Offers to Compromise) Defendant may not recover costs under Code of Civil Procedure Section 998’s cost-shifting provision because her pretrial Section 998 settlement offer was invalid. Ignacio v. Caracciolo. (No. B266930, Los Angeles County Super. Ct. No. BC511878, California Courts of Appeals, Second Appellate District, Division Eight, August 3, 2016).
  4. Plaintiff in an underlying person injury action was offered monies by the defendant to settle the action under terms, that included a condition that the plaintiff execute a release. The plaintiff rejected the offer, and subsequently obtained a judgment against the defendant for a sum less than the amount offered by the defendant. Defendant sought to tax plaintiff’s cost, and obtain its own costs, pursuant to California Code of Civil Procedure, Section 998. The trial court concluded defendant’s settlement offer was invalid under Section 998, and denied her the cost-shifting benefits of that statute. The defendant then appealed.

    The appellate court affirmed. Because the release defendant submitted to plaintiff as part of her settlement offer sought to release defendant and others from claims outside the scope of the current personal injury action, it rendered the offer invalid under Section 998. The appeals court noted that it is well established that a purported Section 998 offer “requiring the release of claims and parties not involved in litigation is invalid…” because it renders the offer incapable of valuation. Such was the case here, wherein, the release submitted by defendant with the offer to compromise was overly broad and encompassed not only the claims that arose from the subject incident, but to “any and all claims” the plaintiff may have had against the defendant and others.

  5. (MICRA) MICRA does not apply to negligence action filed against paramedic supervisor who was involved in a collision while in route to injured victim. Aldana v. Sillwagon. (2d Civil No. B259538, Super. Ct. No. 56-2013-00440994-CU-PA-VTA, California Courts of Appeal, Second Appellate District, Division Six, Ventura County, August 3, 2016).
  6. Defendant, a paramedic supervisor, was driving employer’s pickup truck. He was in route to the location of an injured fall victim to supervise the responding emergency medical technicians (EMTs) and, if necessary, provide assistance. At an intersection he collided with a vehicle being driven by the plaintiff. A year and a half later, plaintiff sued the defendant for negligence. The trial court found that the plaintiff’s lawsuit was subject to the Medical Injury Compensation Reform Act (MICRA) which limits the time to file suit against a healthcare provider for professional negligence to one year from the date the injury is discoverable. The trial court found that the lawsuit was subject to MICRA’s one year statute of limitations rather than the two year limitations for negligence (California Code of Civil Procedure, Section 335.1), and therefore was time-barred.

    Plaintiff appealed and contended that the trial court erred in applying MICRA because the defendant had no connection to the professional services being rendered and because the defendant was not rendering professional services at the time of the accident. The appeals court agreed with the latter contention. While defendant’s status as a paramedic may have demonstrated that he was a medical professional, the automobile collision remained a “garden-variety” accident not resulting from the violation of a professional obligation but from a failure to exercise reasonable care in the operation of a motor vehicle. The obligation was one that he owed to the general public by virtue of being a driver and not one that he owed to a patient by virtue of being a paramedic. Therefore, the appeals court reversed the trial court’s granting of the summary judgment by defendant.

  7. (Expert Witnesses) Summary judgment in favor of doctor reversed where court abuses discretion in excluding declaration of plaintiff’s expert witness because he did not practice medicine in the United States. Borrayo v. Avery. (No. A143765, San Francisco County Super. Ct. No. CGC12525769, California Court of Appeal, First Appellate District, Division One, August 10, 2016).
  8. Plaintiff sued defendant physician alleging that had engaged in medical malpractice during the course of treating her for a condition known as thoracic outlet syndrome. Defendant moved for summary judgment, which the trial court granted after sustain his objection to plaintiff’s sole expert witness’s declaration. On appeal, plaintiff argued that this expert witness, a physical licensed to practice medicine in Mexico, was qualified to provide an opinion about the standard of care to which defendant was held.

    The appellate court reversed, agreeing with the plaintiff’s contention. The court noted that the standard of care in medical malpractice cases use to require that the physician “have the degree of learning and skill ordinarily possessed by practitioners of the medical profession in the same locality.” (Emphasis added).

    The California Supreme Court more recently “formulated the standard of care as that of physicians in similar circumstances rather than similar locations.” As such, the locality factor was not controlling when considering medical expert testimony at summary judgment. The focus should be on whether the expert possesses the requisite skill or experience “such that his testimony will assist the jury in the search for the truth.” Here, the expert’s declaration showed that he was so qualified and as such the trial court abused its discretion in sustaining the defendant’s locality objection.

  9. (Hospital Transfers) Care provider required to readmit resident upon first availability of open bed under 42 Fed. Code of Regulations Section 483.12 despite hospital transfer order from contracted physician. St. John of God Retirement & Care Center v. Department of Health Care Services (Woods). (No. B265488, Los Angeles County Super. Ct. No. BS148766, California Court of Appeals, Second Appellate District, Division Four, August 17, 2016).
  10. Intervener and respondent was a patient/resident of plaintiff’s skilled nursing facility, who elected hospice care through a provider under contract to the facility. When the patient experienced a psychotic episode, the hospice provider directed that she be transferred from the plaintiff’s facility to an acute care hospital for evaluation and treatment. When her treatment was concluded, the plaintiff refused to readmit her to the first available bed under 42 Federal Code of Regulations. Section 483.12, which govern the requirements for a skill nursing facility’s involuntary transfer or discharge of a resident. After an administrative hearing, the Department of Health Care Services (DHCS) ordered the plaintiff to readmit the patient. The court denied plaintiff’s petition for writ of administrative mandate seeking to vacate the order, and plaintiff, a skilled nursing, facility appealed.

    The appeals court concluded that in light developments during the pendency of the appeal, the order requiring the patient’s readmission was now moot. However, because there was a separate civil lawsuit between the parties in which the issue was likely to arise again, the appeals court exercised its discretion to decide whether Section 483.12 exempts a skilled nursing facility from the readmission requirement when a transfer to acute care hospital from which the patient was returning was ordered by the patient’s hospice care provider rather than the facility itself. The appeals court concluded that Section 483.12 contained no such exemption. Thus, to the extent plaintiff contended that its refusal to readmit the patient did not constitute an involuntary transfer because she was returning from an acute care hosp’italization ordered by her hospice care provider, and that therefore plaintiff was not bound by the involuntary transfer requirements, plaintiff was mistaken. The court also rejected plaintiff’s contention that readmitting the patient and thereafter discharging her after complying with Section 483.12’s requirement would have subjected the plaintiff to liability under Health and Safety Code, Section 1432.

  11. (Civil Procedure) Bristol-Myers’ substantive operations in California sufficient to confer specific jurisdiction, allowing nonresidents to pursue products liability claims involving the drug Plavix. Bristol-Myers Squibb, Co. v. Superior Court (Anderson). (No. S221038, Ct. App. 1/2 A140035, San Francisco County Super. Ct. JCCO No. 4748, Supreme Court of California, August 29, 2016).
  12. Several lawsuits were filed by plaintiffs in California against the defendant drug manufacturer which was incorporated in Delaware and headquartered in New York. The drug manufacturer moved to quash service of process on jurisdictional grounds. The trial court found that the drug manufacturer had “substantial operations” in California, sufficient to confer general jurisdiction. The appeals court denied the drug manufacturer’s writ petition challenging the court’s jurisdiction over the drug manufacturer.

    The California Supreme Court, relying on California Code of Civil Procedure, Section 410.10, allows California courts to exercise jurisdiction on any basis not inconsistent with the State and Federal Constitutions. The Federal Constitution allows a court to exercise jurisdiction over a non-resident defendant as long as the defendant has “minimum contacts” and the exercising jurisdiction does not violate “traditional notions of fair play and substantial justice.” The California Supreme Court ultimately upheld the appellate court’s finding of specific jurisdiction and found the court’s exercising specific jurisdiction reasonable under the circumstances.

    Should you have any questions concerning these court decisions or desire a copy of any of them, please do not hesitate to contact our office.