Business Law Journal

In Zackary Diamond v. Scott Schweitzer, et al., California Court of Appeal recently addressed whether a broad release and waiver of liability form, signed by a patron to a racing event as a prerequisite to gaining access to the pit area, released the racetrack’s owners from alleged negligence claims arising from an injury sustained as a result of a punch by a third party.  The Court of Appeal confirmed that the waiver and release protected the racetrack’s owners from such claims and affirmed summary judgment in their favor.

In Camden Systems, LLC v. 409 North Camden, LLC, a California Court of Appeal recently affirmed that a limited liability company (“LLC”) “shall have all the powers of a natural person in carrying out its business activities”, which included ratifying its prior acts. Moreover, the California Court of Appeal affirmed that a member does not have standing to challenge actions taken before it became a member of the LLC, of record or beneficially; and that LLC operating agreements may (with some limitations) deviate from and supersede statutory default provisions.

In VFLA Eventco, LLC v. William Morris Endeavor Entertainment, LLC, the California Court of Appeal recently affirmed the importance of drafting a contract with a clear understanding of every word and clause, and the effect each has on the contract as a whole.

Arbitration is a creature born of contract, and is favored as an expeditious and economical alternative to a civil lawsuit — in part due to the limited discovery available to parties in arbitration. Increasingly, however, arbitrations have increased in complexity, with discovery growing to proportions more typically seen in civil lawsuits (and likewise growing in cost). However, a California Court of Appeal has now explicitly enforced one of the limitations on discovery in arbitration, foreclosing discovery efforts from spilling over to nonparties to an arbitration unless the parties have otherwise agreed.

Three months since our last update on the impact of COVID-19 on commercial lease payment obligations (here), COVID-19 continues its onslaught throughout the United States with now more than 717,000 confirmed cases in California alone. The State of Emergency in California continues, and the Executive Order that previously granted local jurisdictions the authority to impose moratoriums on residential and commercial evictions has likewise been extended. This alert will address the continuing moratoriums on commercial evictions throughout various jurisdictions at the local level, and their impact on commercial lease payment obligations.

In MSY Trading Inc., et al. v. Saleen Automotive, Inc., the California Court of Appeal recently ruled on a question of first impression: whether a postjudgment, independent action to establish alter ego liability for a judgment on a contract is subject to an award of attorney fees (pursuant to the contract) for a prevailing party, even if the prevailing party had not signed that contract.  The Court of Appeal affirmed that any prevailing party, having prevailed in an action based on the contract, could properly seek attorney fees as allowed by the contract.  The Court of Appeal also noted that had such alter ego allegations been made in the prior breach of contract action, the prevailing party would most certainly have been entitled to recover its attorney’s fees —  therefore, the postjudgment, independent action to establish alter ego liability on that judgment must be considered an action based on the contract.

In Techno Lite, Inc. v. Emcod, LLC, the California Court of Appeal recently affirmed the finding that an employee can be liable for fraud when said employee violates his promise not to compete with his employer while still employed.  Though public policy in California places strict limitations on non-compete agreements after an employee has left employment, this shield was never meant to become a sword by which an employee could undermine his employer with impunity even before his employment ends.

In Magic Carpet Ride LLC, et al. v. Rugger Investment Group, LLC, the California Court of Appeal recently reversed a trial court’s decision to grant summary adjudication on a breach of contract claim where the defendant was eight days late in depositing a required lien release.   Even though the contract stated that “time is of the essence” and the late deposit violated the strict terms of the contract, the Court of Appeal clarified that it could be considered substantial performance, creating a triable issue of material fact which made summary adjudication improper.

In Carriere v. Greene, et al., the California Court of Appeal recently reversed a trial court’s award of attorney’s fees to a plaintiff for “prevailing” on an appeal and on a post-trial motion because the plaintiff had lost at trial and was therefore not a prevailing party.  This holding clarified that even where a contractual attorney’s fees clause exists, only a prevailing party is allowed attorney’s fees — and only one side may be the prevailing party in the whole of a lawsuit.

On July 12, 2019, the California Unemployment Insurance Appeals Board (“CUIAB”) recently added the latest stick to a growing pile of authority that linguists working for interpretation or translation companies are independent contractors.  This holding clarified that under the Borello standard (which still controls in the context of the Unemployment Insurance Code) interpreters and translators can be, in certain circumstances, properly considered independent contractors.