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, July 16, 2014. 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.
Review Granted
Horiike v. Coldwell Banker Residential Brokerage Company, S218734—Review Granted—July 16, 2014
This case presents the following issue: When the buyer and the seller in a residential real estate transaction are each independently represented by a different salesperson from the same brokerage firm, does Civil Code section 2079.13, subdivision (b), make each salesperson the fiduciary to both the buyer and the seller with the duty to provide undivided loyalty, confidentiality and counseling to both?
In this case, the salesperson misinformed the buyer of the amount of living area insisting there were 15,000 square feet of living space when he knew there were less than 9,500. After completing the property transaction, the buyer discovered the misinformation and filed a complaint against both the brokerage company and the salesperson for, among other things, breach of fiduciary duty.
The trial court found in favor of the salesperson, holding that although the salesperson made a false representation of material fact, he was not liable since he “honestly believed, and had reasonable grounds for believing, the representation was true when he made it.”
In a published opinion, Horiike v. Coldwell Banker Residential Brokerage Company, B246606, the Court of Appeal, Second District, Division Five, reversed and remanded. The Court cited Civil Code section 2079.13, subdivision (b) which states, “[t]he agent in the real property transaction bears responsibility for his or her associate licensees who perform as agents of the agent. When an associate licensee owes a duty to any principal, or to any buyer or seller who is not a principal, in a real property transaction, that duty is equivalent to the duty owed to that party by the broker for whom the associate licensee functions.”
Accordingly, since the salesperson was an associate licensee acting on behalf of the brokerage company, he owed the same fiduciary duty owed by the broker.
Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc., S218497—Review Granted—July 16, 2014
This case presents the following issues: (1) Does the delegation — by a health care service plan (HMO) to an independent physicians association (IPA), under Health and Safety Code section 1371.4, subdivision (e) — of the HMO’s responsibility to reimburse emergency medical service providers for emergency care provided to the HMO’s enrollees relieve the HMO of the ultimate obligation to pay for emergency medical care provided to its enrollees by non-contracting emergency medical service providers, if the IPA becomes insolvent and is unable to pay? (2) Does an HMO have a duty to emergency medical service providers to protect them from financial harm resulting from the insolvency of an IPA which is otherwise financially responsible for the emergency medical care provided to its enrollees?
Under Health and Safety Code section 1371.4, subdivision (e), an HMO must reimburse physicians for emergency health care services provided to its enrollees even when the physicians are not under contracts to the HMO’s. In this case, the defendant HMO delegated its health care obligations to an IPA, making the IPA liable for any payments to the physicians. When the IPA failed to make payments because of financial hardship, the physicians sought payment from the HMO. When the HMO failed to reimburse the physicians, they sued the HMO for negligent delegation of its responsibility to the IPA.
In a published decision written by Justice Walter Croskey, the Court of Appeal, Second District, Division Three, held the HMO liable to the physicians on the ground that an HMO has a duty not to delegate its obligation to reimburse emergency physicians to an IPA it knows or has reason to know will be unable to pay.
Review Denied (with dissenting justices)
None.
Depublished
None.
