February 19, 2013
The following is our summary of the Supreme Court’s actions on petitions for review in civil cases from the Court’s conference on Wednesday, February 13, 2013. The summary includes those civil cases in which (1) review has been granted, (2) review has been denied but one or more justices has voted for review, or (3) the Court has ordered depublished an opinion of the Court of Appeal.
Tuolumne Jobs & Small Business Alliance v. Superior Court, S207173—Review Granted—February 13, 2013
The question presented is whether CEQA review is necessary when a city adopts an initiative petition, signed by at least 15 percent of the voters, as an ordinance under Elections Code section 9214 subdivision (a), rather than submitting the petition to a vote under subdivision (b) of the same section.
The Court of Appeal, Fifth District, held in a published opinion, Tuolumne Jobs & Small Business Alliance v. Superior Court (2012) 210 Cal.App.4th 1006 (Tuolumne Jobs), that CEQA review may not be avoided if a city adopts an initiative as an ordinance. The Fifth District explicitly created a split and declined to follow the holding of the Fourth District, Division Three, in Native American Sacred Site and Environmental Protection Association v. City of San Juan Capistrano (2004) 120 Cal.App.4th 961 (Native American Sacred Site).
Native American Sacred Site held that the ability of a city to adopt a voter initiative and thereby avoid CEQA review was consistent with the state’s strong policy in favor of voter initiatives. Additionally, the city’s decision whether to adopt the voter initiative or put it on the ballot was mandatory and ministerial, and therefore was exempt from CEQA review under the ministerial exception. In contrast, Tuolumne Jobs held that the city council’s adoption of the voter initiative actually frustrated the voting process by allowing only 15 percent of the voters and the city council to approve the initiative, rather than a majority of the electorate. Additionally, the city council’s adoption of the initiative was not subject to CEQA’s ministerial exception as the city council had to choose between adoption of the initiative, or submission of the initiative to a vote.
Richey v. AutoNation, Inc., S207536—Review Granted—February 13, 2013
The question presented is whether it is clear legal error for an arbitrator to allow an employer to use the “honest belief” defense to defeat an employee’s claim that the employer denied the employee reinstatement in violation of the Moore–Brown–Roberti Family Rights Act (CFRA).
The Court of Appeal, Second District, Division Seven, held in a published opinion, Richey v. AutoNation, Inc. (2012) 210 Cal.App.4th 1516, that the arbitrator committed clear legal error by allowing the employer to use the honest belief defense to defeat the employee’s claims, and therefore vacatur of the award was necessary.
Hartford Casualty Insurance Company v. Swift Distribution, Inc., S207172—Review Granted—February 13, 2013
The question presented is whether an insurance policy provision for “advertising injury” requires an insurance company to provide a defense to the insured company insured when it is claimed that the insured’s advertisement has disparaged another company’s product, but the advertisement did not identify the product and no disparagement occurred.
The Court of Appeal, Second District, Division Three, held in a published opinion, Hartford Casualty Insurance Company v. Swift Distribution, Inc. (2012) 210 Cal.App.4th 915, that the insurance company had no duty to defend under the “advertising injury” portion of the policy because the insured did not establish the potential for coverage.
Monarrez v. Automobile Club of Southern California, S207726—Review Granted and Held—February 13, 2013
The question presented is whether a tow truck company is an independent contractor or an agent of a roadside assistance service. The Court of Appeal, Second District, Division Two, held in a published opinion, Monarrez v. Automobile Club of Southern California (2012) 211 Cal.App.4th 177, that there were triable issues of material fact as to whether the tow truck company was an agent or an independent contractor. The Court has granted review and held the matter pending consideration and disposition of a similar issue of vicarious liability in Patterson v. Domino’s Pizza, LLC, S204543.
Franco v. Arakelian Enterprises, Inc., S207760—Review Granted and Held—February 13, 2013
The question presented is whether a class action waiver previously ruled unenforceable under Gentry v. Superior Court (2007) 42 Cal.4th 443 (Gentry), was still unenforceable in light of the United States Supreme Court’s holdings in Stolt–Nielsen S.A. v. AnimalFeeds International Corp. (2010) 559 U.S. ––––, 130 S.Ct. 1758, 176 L.Ed.2d 605 and AT & T Mobility LLC v. Concepcion (2011) 563 U.S. ––––, 131 S.Ct. 1740, 179 L.Ed.2d 742.
The Court of Appeal, Second District, Division One, held in a published opinion, Franco v. Arakelian Enterprises, Inc. (2012) 211 Cal.App.4th 314, that Gentry was still good law because it established several factors to determine on a case-by-case basis whether a class action waiver prevents employees from vindicating their statutory rights, and when the waiver is unenforceable, requires employees to litigate their claims in court. Further review in this case is held pending the Supreme Court’s resolution of a similar issue in Iskanian v. CLS Transportation of Los Angeles, S204032.
Review Denied (with dissenting justices)
Knispel v. Transnation Title Insurance Company, S207073—Review Denied [Kennard, J., voting for review]—February 13, 2013
The question presented was whether a plaintiff has an insurance bad faith claim against a title insurer if a parcel of land that was not part of the initial purchase agreement was erroneously included in the preliminary title report for the transaction, the warranty deed, and the title insurance policy.
The Court of Appeal, Second District, Division One, held in an unpublished opinion that plaintiff’s bad faith claim failed as a matter of law because the plaintiff did not hold an insurable interest in the erroneously included parcel. Thus, the defendant did not breach the contract by failing to provide benefits with respect to the plaintiff’s claim to that parcel.