Wasserman's Appellate Summaries
September 11, 2000
By Lawrence Wasserman, Esq.
Netlaw Libraries welcomes back attorney Lawrence Wasserman as a new website contributor. We are pleased to announce that his guest column, which synopsizes the recent decisions from the Ninth Circuit Court of Appeals, the California Supreme Court, the six California appellate districts, as well as some of the recent and interesting decisions from the U.S. Supreme Court, will be appearing as a regular feature for members and guests visiting the Netlaw Libraries website. We hope that you will find it to be a good way to start your legal research day and welcome your comments and criticisms regarding the column.
Black v. Department of Mental Health
Case No. B132774
California Court of Appeal, Second District, Division Five
CIVIL RIGHTS-UNRUH ACT-AMERICANS WITH DISABILITIES ACT-REQUIREMENT FOR DISCRIMINATORY TREATMENT
Craig Black (decedent) was a long-term mental patient at the former Camarillo State Hospital. When it closed he was transferred to a private institution, where he died in 1997. His survivors sued the Department of Mental Health, the private institution and its operator for wrongful death. The demurrer of the Department was sustained without leave to amend, on the ground it was not a business establishment under the Unruh Act.
HELD: The Unruh Act provides, that all persons are entitled to free and equal accommodations, privileges, facilities and services in all business establishments. It secures equal access to public accommodations and prohibits discrimination by business establishments. By statute as implemented by regulations of the Attorney general, a violation of the Americans with Disabilities Act is also a violation of the Unruh Act. To prove a claim for discrimination under the ADA, a plaintiff must show: (1) that he is a qualified individual with a disability; (2) he was either excluded from participation in or denied the benefits of a public entity’s programs, benefits or services; and, (3) the public entity’s conduct occurred by reason of his disability. The Court concluded that the complaint related to a standard of care rather than the discriminatory treatment and lack of integration of the disabled that the ADA was designed to remedy. Affirmed.
*Lawler v. Jacobs
Case No. A079638
California Court of Appeal, First District, Division Four
REAL PROPERTY-ANTI-DEFICIENCY PROTECTION ON DEFAULT-EXCEPTION TO ANTI-DEFICIENCY PROTECTION
Jacobs purchased raw land from Lawler and gave a $3 million purchase money note secured by the real property for the balance of the purchase price. Jacobs agreed to waive antideficiency protection. Lawler subordinated his promissory note to a third party commercial construction lender, CCB. Jacobs defaulted when he could not obtain a subdivision map and CCB sold at a trust deed sale. Lawler sued for his deficiency. The issue of the vendor’s ability to pursue a deficiency judgment was bifurcated for a court trial. The lower court ruled that the transaction was not subject to anti-deficiency protection and entered an interlocutory deficiency judgment. The matter proceeded to a jury trial, with a verdict finding Jacobs liable for fraud, in not intending to waive the anti-deficiency provision of the Code and be personally bound to pay the balance of the sale price.
HELD: The Civil Code provides that no deficiency judgment shall lie in any event after a sale of real property under a deed of trust or mortgage given to the vendor to secure payment of the balance of the purchase price of that real property. Under the statute a vendor taking back a purchase money trust deed may look only to the security for recovery of the debt; no deficiency judgment will lie following a sale under the trust deed. The vendor thus assumes the risk that the value of the security may become inadequate. This rule applies even when the vendor takes a second purchase money trust deed. The statute precludes a vendor in second position from bringing an action on the note after the security has been rendered valueless due to sale by the senior lienor. An exception to a deficiency judgment exists when real property is sold for commercial development and the seller of the land subordinates his purchase money security interest in the land sold to a disproportionate construction loan. There was no construction financing that dwarfed the property’s value at the time of sale in this case. The construction financing never came to pass. Jacobs did obtain a line of credit from CCB for up to $8.2 million for land acquisition and development. But what CCB actually funded was $4.5 million for land acquisition. Anti-deficiency protection in this case would not unfairly thrust the risk of failure of the commercial development onto Lawler, imposing on him an unreasonable burden. The waiver of anti deficiency is void. Reversed.
In Re Julian B./Sacramento County Department of Health and Human Services v. Josette B./Rancheria, Intervener
Case No. C034955
California Court of Appeal, Third District
ORDER
Modification of the opinion filed herein on August 14, 2000, not effecting the judgment.
People v. Kothari
Case No. D035249
California Court of Appeal, Fourth District, Division One
CIVIL-INJUNCTION BINDING ON ALL SUCCESSORS IN INTEREST TO A PROPERTY
In 1998 the City of San Diego filed a complaint against Kothari under the Red Light Abatement Act, the Drug Abatement Act, and the Unfair Business Practices Act claiming the motel he owned was a public nuisance and seeking, among other things, injunctive relief to stop prostitution, drug sales, and unfair and unlawful business activities on the premises. The parties agreed to a permanent injunction, but could not agree that it would be binding on all future owners of the motel. The trial court approved the stipulated injunction and provided that it would bind all assigns and successors in interest to the property having notice.
HELD: The court's ruling, effectively making the stipulated injunction run with the land, treats the injunction as though it were an in rem remedy. This is contrary to law. An in rem action or proceeding is one which seeks to affect the interests of all persons in a particular property or thing. However, an injunction - a writ or order requiring a person to refrain from a particular act or to do a particular act - is an in personam remedy. Injunctions are not effective against the world at large. Reversed and remanded.
*Chabner v. United of Omaha Life Insurance
Case No. 98-17060
U.S. Court of Appeals for the Ninth Circuit
INSURANCE-INDIVIDUAL RIGHT OF ACTION PREDICATED ON VIOLATION OF THE INSURANCE CODE-DISCRIMINATORY APPLICATION OF PREMIUM-LACK OF ACTUARIAL DATA OR EXPERIENCE ON WHICH TO BASE PREMIUM-AMERICANS WITH DISABILITY ACT
Chabner suffers from a rare and progressive form of muscular dystrophy. He has been confined to a wheelchair since 1991 and has suffered "marked wasting" of his extremities. At age 35 Chabner applied for and United of Omaha Life Insurance issued a non-standard life policy for a premium close to that of a person without his condition, except that the amount of the premium applicable to cash value was considerably less. United acknowledged that his condition did not affect mortality more than a few years, but did not respond to Chabner's letters requesting an explanation of why the cash value was less than for a standard policy. Chabner sued under the Americans with Disabilities Act and California law. Summary judgment was for Chabner and United was ordered to modify the policy.
HELD: The ADA provides that no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, etc. As a safe harbor it also provides that the ADA shall not be construed to prohibit or restrict an insurer from underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law. The district court decision cannot be upheld based on the ADA. The California Insurance Code provides that an insurer may provide a premium rate differential for a physical or mental impairment which is based on sound actuarial principles or is related to actual and reasonably anticipated experience. Although Chabner's state law causes of action arose under the Business and Profession Code and the Unruh Civil Rights Act, the standards of liability for each of these claims are set by the Insurance Code. A non-standard premium is lawful only if it is based on sound actuarial principles, or is related to actual and reasonably anticipated experience. Chabner had standing to bring the action, which is predicated under the Insurance Code §10144 although he would not have a private right of action under Insurance Code §790.03, although the same conduct was involved. Affirmed.
Lundell v. Anchor Construction
Case Nos. 98-17090/98-17260
U.S. Court of Appeals for the Ninth Circuit
BANKRUPTCY-BURDEN OF PROOF OF CLAIM
Debtor, Lundell, loaned several hundred thousand dollars to West Coast and acted as surety for bonds to obtain federal construction contracts. He later entered into a partnership agreement with the principals of West Coast. When a construction project failed Lundell became a bankrupt under Chapter 7 of the Bankruptcy Code. He objected to the proof of claims filed in his proceeding. His objections to the claims were denied by the Bankruptcy Court. The district court found that the Bankruptcy Court had placed the burden of proof of the non existence of the partnership and remanded for more specific findings.
HELD: The court found that it had jurisdiction, although on remand for further proceedings there technically was no final judgment. A proof of claim is deemed allowed unless a party in interest objects. Upon objection, the proof of claim provides some evidence as to its validity and amount" and is strong enough to carry over a mere formal objection without more. To defeat the claim, the objector must come forward with sufficient evidence and show facts tending to defeat the claim. The burden of proof then shifts back to the claimant to prove the validity of the claim by a preponderance of the evidence. Lundell failed to bear his burden of coming forward with facts sufficient to rebut the allegations in the claims and claimants were not required to go forward with proof of the validity of their claims. Reversed the decision of the district court and reinstate the Bankruptcy Court order.
Manistee Town Cente v. City of Glendale
Case No. 99-16328
U.S. Court of Appeals for the Ninth Circuit
GOVERNMENT-IMMUNITY OF GOVERNMENT OFFICIALS FROM CIVIL RIGHTS VIOLATIONS-GOVERNMENT OFFICIALS LOBBYING AGAINST ENTERING INTO CONTRACT BY ANOTHER GOVERNMENT ENTITY
The City of Glendale, Arizona persuaded the County not to leas space from Manistee Town Center. Manistee sued the City for violation of his civil rights and interference with business relationships. His complaint was dismissed.
HELD: Under the Noerr-Pennington doctrine, persons who petition the government for redress are generally immune from civil rights violation liability. If defendants were private citizens, the applicability of the Noerr-Pennington doctrine would be clear. The Court concluded that the policy behind the doctrine should apply to government officials. The object of the officials action did not come within the sham exception to the doctrine. Affirmed.
*United States v. Littlejohn
Case No. 99-50417
U.S. Court of Appeals for the Ninth Circuit
CRIMINAL-NECESSITY FOR ADVISE AS TO LOSS OF FEDERAL BENEFITS ON PLEA OF GUILTY-HARMLESS ERROR
Littlejohn pled guilty distribution of cocaine base pursuant to a plea agreement. Specifically waived his right to appeal any sentence imposed, and the manner in which the sentence is determined, provided that his term of imprisonment is 240 months or less. He was not advised at the time of his plea agreement that having sustained a third conviction for distribution of a controlled substance, he is permanently ineligible for all federal benefits. He was sentenced to 240 months with no explanation of the derivation of the term. He argues that both his acceptance of the plea agreement and his actual plea were involuntary. He also contends that the district court failed sufficiently to state on the record the reasons for choosing the sentence it imposed.
HELD: The district court committed only harmless error in because the error did not have any effect on his substantial rights. The Court refused to consider Littlejohn's challenge to the district court's alleged noncompliance with a full statement of the basis for sentencing because he waived his right to appeal that issue. The district court is required by court Rule to inform defendants pleading guilty of the direct consequences of their plea and resulting conviction, in addition to the warnings required by the explicit language of the court Rule, but need not advise defendants of the collateral consequences of their guilty plea. The federal benefit ineligibility under statute in this case is automatic and direct. The failure to advise Littlejohn of this consequence was harmless error. The record conclusively demonstrates that a warning would not have made any difference to Littlejohn's decision to plead guilty. Affirmed.
Agua Caliente Band of Cahuilla Indians v. Klehs, State Board of Equalization
Case No. 99-55251
U.S. Court of Appeals for the Ninth Circuit
OTHER-JURISDICTION OF FEDERAL COURT OVER INDIAN TRIBE CLAIM AGAINST STATE OFFICIALS-ASSESSMENT OF SALES TAX
The Agua Caliente Band of Cahuilla Indians leased reservation property to a non-tribal party, which then constructed a hotel on the property. Many years later the Tribe purchased a leasehold interest in the hotel. It formed a tribal corporation under the Indian Reorganization Act and transferred that interest to a tribal-owned holding company, which then transferred it to an operating corporation. The California State Board of Equalization assessed unpaid use tax attributable to the Tribe's sale of food and beverages to non-tribal members. The Tribe sought declaratory relief. The district court concluded that it lacked jurisdiction because of the Eleventh Amendment.
HELD: Under the Young doctrine the courts have recognized an exception to the Eleventh Amendment bar for suits for prospective declaratory and injunctive relief against state officers, sued in their official capacities, to enjoin an alleged ongoing violation of federal law. Based upon traditional Young jurisprudence, the Tribe's claims appear to fall squarely within the exception. The Coeur d'Alene exception to the Young doctrine is limited to situations in which the requested relief would infringe upon a state's sovereignty to such a degree as to render the suit against the state itself. The Tribe's suit is properly characterized as a suit for declaratory relief against state officers and not against the state itself, and that Coeur d'Alene, while instructive, is inapposite. The fact that there was an alternate remedy at law - to pay the tax and sue for a refund - neither divested the district court of jurisdiction nor removed the case from the Young exception for Eleventh Amendment purposes. Reversed and remanded.
Wasserman's Archived Appellate Summaries
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