Significant Pending Cases
Horvitz & Levy LLP is regularly involved in a variety of appeals involving major judgments and/or important public policy issues.
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Howell v. Hamilton Meats & Provisions, Inc. (2009) 179 Cal.App.4th 686, review granted March 10, 2010, S179115; Yanez v. SOMA Environmental Engineering, Inc. (2010) 185 Cal.App.4th 1313, review granted and briefing deferred September 1, 2010, S184846
In Howell, the California Supreme Court will decide whether the common-law collateral source rule allows a plaintiff to recover as medical expense damages the “usual and customary” charges billed by the plaintiff’s healthcare providers even though the providers agreed to accept as full payment for their services lesser amounts from the plaintiff’s health insurance carrier. The same issue is presented in the Yanez case, in which the Supreme Court has also granted review but deferred briefing pending its decision in Howell. Statewide, the issue is likely worth hundreds of millions of dollars every year.
The Howell plaintiff sought medical treatment for injuries sustained in a car accident. In her lawsuit, she submitted bills from her healthcare providers totaling about $190,000 and the jury awarded that amount for her past medical expense damages. After trial, however, on the defendant’s motion, the trial court reduced the plaintiff’s medical expense damages to about $60,000 because that was the amount that the healthcare providers had accepted as full payment for plaintiff’s treatment. The payment had come from the plaintiff’s health insurance carrier under the terms of contracts the carrier had negotiated with the healthcare providers.
Plaintiff challenged the damage reduction on appeal and the Court of Appeal reversed. The court concluded that the reduction violated the collateral source rule which precludes deducting from a plaintiff’s damages any compensation that the plaintiff has received for her injuries from a source independent of the tortfeasor. Although the plaintiff recovered as damages the $60,000 paid by her health insurer, the court held that the health insurer’s negotiation of a reduction in price from the $190,000 billed by the healthcare providers was also a “benefit” under the collateral source rule.
In the Howell case, Horvitz & Levy LLP has filed an amici curiae brief in the Supreme Court on behalf of the American Insurance Association, the Association of California Insurance Companies, the Personal Insurance Federation of California, the California State Automobile Association Inter-Insurance Bureau, Chartis, Inc., Farmers Insurance Exchange, Infinity Insurance Company, the Interinsurance Exchange of the Automobile Club, Mercury Insurance Group, State Farm General Insurance Company, and State Farm Mutual Automobile Insurance Company. In the Yanez case, Horvitz & Levy LLP represents the defendants. If you would like further information about this case, please contact Horvitz & Levy partners David Ettinger or Tom Watson.
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Jankey v. Lee (2010) 181 Cal.App.4th 1173, review granted May 12, 2010, S180890.
In this case, the California Supreme Court will decide whether an award of attorney fees to a prevailing defendant under the California Disabled Persons Act (Civ. Code, § 54 et seq.) (CDPA) is inconsistent with, and therefore preempted by, the federal Americans with Disabilities Act (42 U.S.C. § 12101 et seq.) (ADA).
A disabled person and a nonprofit organization brought an action against the owner of a small grocery/liquor store alleging that architectural barriers prevented full and equal access to the store in violation of the CDPA and the ADA. After granting summary judgment in favor of defendant, the trial court awarded defendant mandatory attorney fees under Civil Code section 55 (section 55), which provides that a prevailing party in an action to enjoin a violation of disability access requirements “shall be entitled to recover reasonable attorney fees.”
On appeal, plaintiffs challenged the fee award based on the Ninth Circuit’s decision in Hubbard v. SoBreck, LLC (9th Cir. 2009) 554 F.3d 742, which held that a fee award to a prevailing defendant under section 55 without a finding that the plaintiff's lawsuit was frivolous, unreasonable, or groundless, was inconsistent with, and therefore preempted by, the ADA, which authorizes such fees only on frivolous claims. The California Court of Appeal disagreed with the Ninth Circuit’s preemption analysis and affirmed the mandatory fee award.
The defendant has retained Horvitz & Levy LLP to assist with preparation of the briefs on the merits and argument before the California Supreme Court. If you would like further information about this case, please contact Horvitz & Levy partner David Axelrad.
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Zhang v. Superior Court (2009) 178 Cal.App.4th 1081, review granted Feb. 10, 2010, S178542.
In this case, the California Supreme Court will decide whether an insured may maintain a cause of action against its insurer under the Unfair Competition Law (Bus. & Prof. Code, § 17200) (UCL) based on allegations that the insurer misrepresents and falsely advertises that it will promptly and properly pay covered claims. The court will also consider whether Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287 bars such a cause of action.
The insured brought an action against her insurer for breach of contract, breach of implied covenant of good faith, and violation of the UCL based on the insurer’s handling of a claim arising from a fire at the insured’s commercial premises. The superior court sustained the insurer’s demurrer to the UCL claim without leave to amend. The insured filed a petition for writ of mandate challenging the ruling on demurrer. The Court of Appeal granted the petition and directed the superior court to reinstate the UCL claim. The Court of Appeal reasoned that because the insured’s complaint alleged fraudulent misrepresentations and misleading advertising concerning the insurer’s intention to pay covered claims, conduct that is proscribed by both the Unfair Insurance Practices Act (Ins. Code, § 790.03) and the UCL, Moradi-Shalal did not bar the insured from maintaining the claim.
Real Party in Interest California Capital Insurance Co. retained Horvitz & Levy LLP to consult on its petition for review and then to prepare the briefs on the merits in the Supreme Court. If you would like further information about this case, please contact Horvitz & Levy partners Peter Abrahams or Mitchell C. Tilner.
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O’Neil v. Crane Co. (2009) 177 Cal.App.4th 1019, review granted Dec. 23, 2009, S177401.
In this case, the California Supreme Court will decide the scope of a defendant manufacturer’s liability for the products of others for which the defendant is outside of the chain of distribution. Horvitz & Levy LLP represents defendant Crane Co.
Crane Co. manufactured and supplied valves to the Navy in the 1940’s. The Navy incorporated some of those valves into the mechanical systems aboard one of its World War II-era aircraft carriers, the USS Oriskany. Lt. O’Neil served aboard the Oriskany in the 1960’s, at which time he allegedly worked in the vicinity of Crane Co. valves. During Lt. O’Neil’s service, the Navy used asbestos-containing products with or near the Crane Co. valves on the Oriskany. Crane Co. did not manufacture or supply any of the asbestos-containing materials present on the Oriskany during Lt. O’Neil’s service.
Decades later, O’Neil and his family sued Crane Co., alleging that O’Neil was injured by his exposure to asbestos-containing products on the Orsikany. The trial court granted a nonsuit in favor of Crane Co. but the Court of Appeal reversed. The Court of Appeal expressly disagreed with another published opinion on the same question, and determined that Crane Co. could be held strictly liable for injuries caused by third parties’ products that were used with or near the defendant-manufacturer’s products.
Crane Co. retained Horvitz & Levy for the petition for review to the California Supreme Court and for the briefing on the merits in the Supreme Court. If you would like further information about this case, please contact Horvitz & Levy partners Curt Cutting or Jason Litt.
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Bruns v. E-Commerce Exchange, Inc. (2009) 172 Cal.App.4th 488, review granted July 22, 2009, S172684
This pending California Supreme Court case will decide several key issues concerning the application of California’s statutory requirement that cases be dismissed if not brought to trial within five years. Horvitz & Levy LLP represents defendant E-Commerce Exchange, Inc.
By a 2-1 vote, the Court of Appeal held that a stay tolls the five-year period even when only part of the action is stayed, and notwithstanding the fact that the partial stay is the result of the trial court’s efforts, as required by the California Rules of Court, to effectively manage complex, consolidated matters. The Court of Appeal’s opinion is the first to hold that a partial stay automatically tolls the five-year period.
As is common in complex and consolidated matters, the trial court in Bruns formally stayed party-initiated discovery for the purpose of actively managing discovery to be performed under court supervision and by court order. Nonetheless, as a matter of law, the Court of Appeal held that this limited discovery stay tolled the five-year period. The Court of Appeal also held that the trial court’s judicial management supported tolling under an exception to the five-year statute that applies only when it is “impossible, impracticable, or futile” to prosecute the action.
The Court of Appeal’s reasoning, if not rejected by the Supreme Court, is likely to undermine an important tool for ensuring that lawsuits are brought to an efficient and speedy conclusion rather than languishing in the trial courts. The issue is most important in complex and consolidated matters where trial courts have an enhanced obligation to actively manage litigation. The Court of Appeal’s opinion would establish that judicial management such as the staging of discovery automatically tolls the five-year period for bringing actions to trial.
If you would like further information about this case, please contact Horvitz & Levy LLP partners Brad Pauley or Robert Wright.