Case Summaries

Bankruptcy Law

[01/14] Total Realty Management, LLC v. R. A. North Development, Incorporated
In appeal by bankruptcy trustee for debtor, judgment of dismissal of adversary action against defendant for contribution for debtor’s liabilities under the Interstate Land Sales Full Disclosure Act, is affirmed where: 1) defendant is potentially independently liable to debtor’s purchasers under the Act; however 2) debtor is not entitled to contribution as a matter of law because it has yet to make any payment to aggrieved purchasers stemming from Interstate Land Sales Act violations.

[12/28] In re: Beach First Nat’l Bancshares, Inc.
In a trustee’s suit against the former directors and officers of a bankrupt corporation, alleging breach of fiduciary duty and negligence, bankruptcy court’s grant of defendants’ motion to dismiss is affirmed for the most part, but reversed and remanded as to the dismissal of the trustee’s claim regarding the directors’ alleged improper subordination of the corporation’s interest in a real estate holding entity.

[12/04] In the Matter of Bellingham Ins. Agency, Inc.
In bankruptcy proceedings, district court’s affirmance of the bankruptcy court’s summary judgment in a fraudulent conveyance action against a nonclaimant to the bankruptcy estate is affirmed where: 1) the public rights exception to the rule of Article III adjudication does not encompass federal-law fraudulent conveyance claims, even though Congress designated such claims as core bankruptcy proceedings, and 11 U.S.C. section 157(b)(1) provides bankruptcy courts the power to hear fraudulent conveyance cases and to submit reports and recommendations to the district courts; 2) the right to a hearing in an Article III court is waivable, and in this case, the nonclaimant consented to the bankruptcy judge’s adjudication of the fraudulent conveyance claim by failing to object until the case reached the court of appeals; 3) the trustee satisfied all elements of a constructively fraudulent transfer of the debtor’s property under 11 U.S.C section 548 and under state law; and 4) because the nonclaimant was a successor corporation of the debtor, it was liable for its debts.

[11/26] In re: Baldwin
In a suit brought by unsecured creditors against various directors and officers of a bankrupt non-profit nursing care facility, alleging breach of their fiduciary duties of care and loyalty and for deepening insolvency, defendants’ petition for a writ of mandamus challenging the district court’s order setting a 7.5 hour per side limit on the parties’ presentation of evidence at trial is denied where a post-judgment appeal is adequate to assure meaningful review of the propriety of the time-limit order.

Commercial Law

[01/18] Boston Gas Company v. Century Indemnity Company
In action against defendant-insurer for declaratory relief as to defendant’s obligations under insurance policies issued to plaintiff and damages for breach thereof, related to costs of remediating environmental contamination, judgment is affirmed, where the district court did not abuse its discretion in determining that: 1) given the limitations of the original jury verdict, it could not serve as a predicate for employing a fact-based allocation; 2) the time on the risk method is the most appropriate and justiciable means of allocation was reasonable; 3) plaintiff should be judicially estopped from contradicting its prior statements at trial that contamination was continuous from the time when plant operations began until the time of trial; 4) plaintiff’s motions seeking judgment as a matter of law on the owned property exclusion should be denied; and 5) the verdict should be vacated as being against the clear weight of the evidence.

[01/18] Global Naps, Inc. v. Verizon New England, Inc.
In appeal of injunction issued pursuant to the district court’s oversight of a receivership sale, that arose originally out of a dispute over access fees the parties owed each other for interconnecting their telephone networks, the order is affirmed where the injunction that prevented interference with, or damage to the Purchased Assets, plainly was justified under longstanding equity principles.

[01/15] Rojas v. Platinum Auto Group
In action by plaintiff-car purchaser regarding defendants’ mischaracterization of his down payment, judgment sustaining defendants’ demurrers without leave to amend is: 1) reversed and remanded as to defendants Platinum Auto Group, Inc., and Topaz Financial, Inc. because plaintiff’s complaint stated a cause of action under the Rees-Levering Act as plaintiff need not have suffered actual damage from defendants’ violation of the statute’s disclosure requirements, and the substantial compliance rule has been statutorily removed; and 2) affirmed as to defendant State Farm Fire and Casualty Company.

[01/14] CMR DN Corp. v. City of Philadelphia
In constitutional challenge to defendant-city’s ordinances that imposed height and width requirements on construction along the Central Delaware River waterfront, judgment is affirmed where the district court did not err in concluding that: 1) the rescission of the height restriction mooted plaintiff’s federal constitutional claims against the 2006 ordinance; 2) plaintiff’s motion to further amend its complaint to attack the width restriction should be denied; and 3) summary judgment for the defendant-city on all other claims, including those based on the 2009 ordinance, should be granted.

Environmental Law

[01/18] Boston Gas Company v. Century Indemnity Company
In action against defendant-insurer for declaratory relief as to defendant’s obligations under insurance policies issued to plaintiff and damages for breach thereof, related to costs of remediating environmental contamination, judgment is affirmed, where the district court did not abuse its discretion in determining that: 1) given the limitations of the original jury verdict, it could not serve as a predicate for employing a fact-based allocation; 2) the time on the risk method is the most appropriate and justiciable means of allocation was reasonable; 3) plaintiff should be judicially estopped from contradicting its prior statements at trial that contamination was continuous from the time when plant operations began until the time of trial; 4) plaintiff’s motions seeking judgment as a matter of law on the owned property exclusion should be denied; and 5) the verdict should be vacated as being against the clear weight of the evidence.

[01/16] Rickley v. Goodfriend
In enforcement action against defendants for failing to comply with judgment that required cleanup of contaminated debris that they had dumped on plaintiff-neighbors’ property, motion granting plaintiffs’ request to add defendants’ attorneys as additional defendants is affirmed, where: 1) the trial court did not abuse its discretion in allowing the amendment because the amended complaint alleges that attorney-defendants violated two independent legal duties owed to plaintiffs, a duty not to engage in affirmative misconduct that would interfere with the remediation of the contaminated debris, and a duty to disburse the funds from their trust account in a fair manner; 2) the claims are not barred by the litigation privilege; and 3) the assertions of the conspiracy claims do not violate the attorney-client privilege.

[01/11] Indian Harbor Insurance Co. v. US
In reimbursement action under the National Defense Authorization Act for environmental cleanup costs associated with the development of property formerly used as a military base, judgment dismissing the Second Amended Complaint is reversed and remanded, where: 1) the Court of Federal Claims erred in finding that plaintiff was not entitled to indemnification under Section 330 of the Act; 2) the plain language of Section 330 requires a “suit, claim, demand or action, liability, judgment, cost or other fee arising out of any claim for personal injury or property damage,” but there does not require that the claim be adversarial or a third party; and 3) nothing in Section 330 requires that the claimant itself suffer personal injury or own the damaged property.

[01/11] US v. El Dorado County
In action to modify a consent decree concerning the clean-up of an abandoned landfill located near Lake Tahoe in California between the federal government and El Dorado County, the government’s appeal of order suspending the decree “pending further order”, is dismissed for lack of jurisdiction, where: 1) there was no final appealable order; and 2) the government failed to meet its burden that the factors under Carson v. Am. Brands, Inc., 450 U.S. 79 (1981) are met.

Health Law

[01/22] Sebelius v. Auburn Regional Medical Center
In challenge by hospitals to Medicare’s SSI fraction calculation, which affects the reimbursement amount health care providers receive for inpatient services rendered to Medicare beneficiaries and any upward adjustment for serving a disproportionate number of low-income patients, judgment allowing administrative appeal made 10 years after the determination, is reversed and remanded, where: 1) the 180-day limitation in section 42 USC 1395oo(a)(3) is not jurisdictional; 2) the Secretary reasonably construed the statute to permit a regulation extending the time for a provider’s appeal to the Provider Reimbursement Review Board to three years; and 3) the presumption in favor of equitable tolling does not apply to administrative appeals of the kind here at issue.

[01/17] Colby v. Union Security Insurance Co.
In claim against defendant-insurer and plan administrator for long term disability (LTD) benefits under an employee group benefit plan governed by ERISA, judgment awarding LTD benefits to plaintiff for maximum time period available under the plan is affirmed, where: 1) in an addiction context, a risk of relapse can be so significant as to constitute a current disability; 2) under the language of the plan, categorically excluding risk of relapse as a source of disability is simply unreasonable; and 3) the district court did not abuse its discretion in awarding retroactive benefits and plaintiff attorneys’ fees.

[01/15] W.C. v. Secretary of Health and Human Services
Special master’s decision denying petitioner compensation under the National Childhood Vaccine Injury Act of 1986, is affirmed, where: 1) the special master’s factual determinations were not arbitrary or capricious; and 2) the decision was in accordance with law.

[01/15] Castaneda v. Dept. of Corrections and Rehabilitation
In wrongful death action brought by heir of former prisoner who died during pendency of his action against the State for failure to summon immediate medical care, judgment is reversed, where: 1) the decedent’s tort claim was sufficient; but 2) the trial court abused its discretion in denying the State’s motion for judgment on the pleadings with respect to the heir’s wrongful death cause of action because she never complied with the Government Tort Claims Act and nothing in the State’s conduct estopped it from raising the heir’s failure to file a government tort claim; and 3) the facts of this case do not amount to a failure to summon medical care or a violation of Government Code section 845.6; and 4) as a matter of law, the State is immune to liability for the decisions that resulted in the deceased prisoner failing to undergo a biopsy while he was in State custody.

Injury & Tort Law

[01/18] Linde v. Arab Bank, PLC
In claims brought by victims and families of victims of terrorist attacks committed in Israel between 1995 and 2004 alleging defendant-bank provided financial services and support to terrorists during this period, facilitating the attacks that caused them grave harm, defendant’s writ of mandamus challenging district court’s order imposing discovery sanctions on defendant is denied, and appeal is dismissed, where: 1) the sanctions order is not a reviewable collateral order and thus, there is no jurisdiction over the appeal; and 2) this is not an appropriate case for issuance of the extraordinary writ of mandamus because defendant has not established, among other factors, that it has a “clear and indisputable right” to such drastic relief or that review after final judgment will not provide adequate relief.

[01/17] Faulkner v. ADT Security Services, Inc.
In suit alleging invasion of privacy alleging defendant recorded his telephone conversation with an defendant’s representative without his consent where trial court granted defendant’s motion to dismiss, the case is remanded where, although plaintiff’s pleadings failed to state a plausible claim upon which relief could be granted, the case is remanded in order to give plaintiff an opportunity to seek to amend his complaint to successfully plead a cause of action under the federal standards set forth in Iqbal and Twombly.

[01/17] Tom Jones Enterprises v. County of L.A.
In negligence action alleging defendant’s employee caused the release of funds subject to a writ of execution contrary to the instructions of plaintiffs, trial court’s granting of defendant’s demurrer to the first amended complaint (FAC) without leave to amend and dismissal of the action is affirmed, where although the FAC was not deficient for failing to identify the employee whose conduct is attributed to defendant, the claim is nevertheless barred by the litigation privilege provided in Civil Code section 47(b).

[01/17] Kassey S. v. City of Turlock
In suit alleging sexual assault of a minor by police officer, judgment for defendant is affirmed, where: 1) when a police officer sexually assaults a minor participating in a police explorer program, the police officer’s employer is not vicariously liable for the misconduct because it is outside the course and scope of employment; and 2) under Penal Code section 11166 officer did not have report his own abuse because imposing a duty on a mandated reporter who abuses a child to report that abuse would require the mandated reporter to forfeit his or her Fifth Amendment privilege against self-incrimination.

Insurance Law

[01/22] Sebelius v. Auburn Regional Medical Center
In challenge by hospitals to Medicare’s SSI fraction calculation, which affects the reimbursement amount health care providers receive for inpatient services rendered to Medicare beneficiaries and any upward adjustment for serving a disproportionate number of low-income patients, judgment allowing administrative appeal made 10 years after the determination, is reversed and remanded, where: 1) the 180-day limitation in section 42 USC 1395oo(a)(3) is not jurisdictional; 2) the Secretary reasonably construed the statute to permit a regulation extending the time for a provider’s appeal to the Provider Reimbursement Review Board to three years; and 3) the presumption in favor of equitable tolling does not apply to administrative appeals of the kind here at issue.

[01/18] Boston Gas Company v. Century Indemnity Company
In action against defendant-insurer for declaratory relief as to defendant’s obligations under insurance policies issued to plaintiff and damages for breach thereof, related to costs of remediating environmental contamination, judgment is affirmed, where the district court did not abuse its discretion in determining that: 1) given the limitations of the original jury verdict, it could not serve as a predicate for employing a fact-based allocation; 2) the time on the risk method is the most appropriate and justiciable means of allocation was reasonable; 3) plaintiff should be judicially estopped from contradicting its prior statements at trial that contamination was continuous from the time when plant operations began until the time of trial; 4) plaintiff’s motions seeking judgment as a matter of law on the owned property exclusion should be denied; and 5) the verdict should be vacated as being against the clear weight of the evidence.

[01/17] Colby v. Union Security Insurance Co.
In claim against defendant-insurer and plan administrator for long term disability (LTD) benefits under an employee group benefit plan governed by ERISA, judgment awarding LTD benefits to plaintiff for maximum time period available under the plan is affirmed, where: 1) in an addiction context, a risk of relapse can be so significant as to constitute a current disability; 2) under the language of the plan, categorically excluding risk of relapse as a source of disability is simply unreasonable; and 3) the district court did not abuse its discretion in awarding retroactive benefits and plaintiff attorneys’ fees.

[01/16] Carolina Casualty v. L.M. Ross Law Group
In coverage action for declaratory relief and reimbursement arising out of payment by plaintiff-insurer to settle a legal malpractice claim against defendant, trial court’s grant of motion to amend judgment to include defendant Ross as an individual debtor, along with defendant Ross Law Group, is affirmed, where: 1) the trial court’s finding that Ross Law Group dissolved and ceased to operate as a limited liability partnership in September 2006 is supported by substantial evidence; 2) the trial court did not abuse its discretion in amending the judgment to add defendant Ross as a debtor because substantial evidence supports the finding that Ross as an individual, actively participated in and controlled the litigation on behalf of Ross Law Group; and 3) the order does not interfere with statutory protections for partners in limited liability partnerships.

Workers’ Comp

[12/21] Defoe v. Phillip
In plaintiff’s suit for negligence against his co-worker, the decision of the Supreme Court of the Virgin Islands, reversing the Superior Court’s rejection of the claim, which was based on the holding in Tavarez v. Klingensmith that the Workers’ Compensation Act prevents injured employees from suing their coworkers, and declaring that it was no longer bound by the Third Circuit Court of Appeals’ pre-2007 decisions on Virgin Islands law, is affirmed where: 1) the Virgin Islands Supreme Court’s order reversing the Superior Court and remanding for further proceedings satisfied the “final decisions” requirement in section 1613; 2) the Supreme Court may reject the Third Circuit Court of Appeals’ local decisions that predate its establishment; and 3) the Supreme Court did not manifestly err in rejecting Tavarez.

[12/07] Reynolds v. Am. Red Cross Nat’l
In plaintiff’s suit for disability discrimination against his former employer, local chapter of the Red Cross, judgment of the district court is: 1) affirmed as to the judgment with regard to the primary ADA claim; 2) affirmed as to the judgment regarding plaintiff’s retaliation claim; 3) affirmed as to the judgment regarding plaintiff’s confidentiality claim; and 4) vacated as to the court’s ruling that the Chapter and the National Red Cross can be aggregated in order to meet the fifteen employee threshold required for an “employer” under the ADA, because the employer’s cross appeal is unnecessary where an appellee seeks nothing more than to preserve a judgment in its favor.

[11/26] Adventist Health v. Workers’ Comp. Appeals Bd.
An order of the Workers’ Compensation Appeals Board (WCAB), granting plaintiff reimbursement for self-procured medical treatment and withholding her two medical reports from inclusion in her medical records is annulled and remanded where: 1) plaintiff did not properly designate a new primary treating physician but returned to physicians who had been administratively removed because they did not provide the employer with a plan of treatment or any medical reports; and 2) the WCAB acted without authority when it order the employer to reimburse plaintiff for self-procured medical care and ordered two of her medical records to be withheld from the next primary treating physician without good cause.

[11/06] Readylink Healthcare, Inc. v. Jones
Trial court’s denial of a private healthcare staffing agency’s petition for a peremptory writ of administrative mandamus, challenging the State Compensation Insurance Fund’s (SCIF) determination that petitioner’s per diem payments to traveling nurses counted as payroll in assessing additional premium, is affirmed where: 1) the trial court did not err in applying the substantial evidence standard of review; 2) the Commissioner’s decision is not preempted by federal law; 3) the Commissioner did not create a new regulation; and 4) equity does not prevent retroactive application of the Commissioner’s decision.

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