OCTOBER: California Case Law Updates

Melendrez v. Ameron International Corp., 2015 WL 5453873

Mary Melendrez and her children (collectively, “Plaintiffs”) filed a wrongful death action against Ameron International Corp. (“Ameron”), the former employer of their deceased husband/father, Lario Melendrez. During the course of Mr. Melendrez’s employment with Ameron, he was regularly exposed to asbestos in Ameron pipe products. He was also exposed to asbestos during non-work hours whenever he used scraps of Ameron pipe that he was permitted to take for home projects. Mr. Melendrez died from asbestos-related mesothelioma following a near 24-year career with Ameron.

Ameron filed a motion for summary judgment on the ground Plaintiffs’ wrongful death claim was barred by the workers’ compensation exclusive remedy rule under California Labor Code § 3602. This rule stands for the proposition that workers’ compensation is an employee’s (and their dependents’) only source of recovery against the employer for injuries they sustain while performing the job.

There was no triable issue of fact as to whether Mr. Melendrez’s workplace asbestos exposure substantially contributed to him contracting mesothelioma. Consequently, the trial court granted Ameron’s motion for summary judgment finding Mr. Melendrez’s non-workplace asbestos exposure did not create an isolated injury that would enable Plaintiffs to pursue a wrongful death claim. Plaintiffs appealed.

The trial court’s order was affirmed. On appeal, Plaintiffs argued Ameron was not entitled to summary judgment because it did not demonstrate Mr. Melendrez’s off-duty asbestos exposure qualified for workers’ compensation coverage. Specifically, Plaintiffs contended Ameron had to show the off-duty asbestos exposure arose out of (and in the course of) Mr. Melendrez’s employment. The Second District Court of Appeal disagreed, reasoning (a) Mr. Melendrez’s workplace asbestos exposure was a “substantial contributing cause” of his demise, and (b) any injuries associated with Mr. Melendrez’s off-duty asbestos exposure were covered by workers’ compensation as “collateral to or derivative of” the asbestos-related injuries he sustained on the job. In view of this reasoning, the

Court of Appeal held Plaintiffs’ action was barred by the workers’ compensation exclusive remedy rule and affirmed the trial court’s order.

Kahn v. The Dewey Group, 2015 WL 5227645

Brian Kahn sued 20 defendants for personal injuries he sustained from being exposed to hazardous gases over a 15-year period. The toxic gases allegedly came from industrial waste that the defendants dumped on the land where Mr. Kahn’s mobile home was located. The complaint advanced theories of joint and several liability.

Prior to trial, the defendants presented Mr. Kahn with a joint Civil Code of Procedure § 998 statutory offer to compromise for $75,000. The purpose of a statutory offer to compromise is to facilitate settlement. If a defendant’s offer is not accepted and the plaintiff obtains a less favorable monetary judgment at trial, the defendant is entitled to collect all post-offer costs and may be awarded post-offer expert fees.

In this case, Mr. Kahn rejected the defendants’ offer to compromise. A nonsuit was later granted with regard to 14 of the 20 defendants. Mr. Kahn and the remaining six defendants proceeded to a jury trial, the jury ultimately deadlocked, and a mistrial was declared. Thereafter, the fourteen dismissed defendants filed a memorandum of costs seeking to collect their pro rata share of Section 998 costs and expert fees.

Mr. Kahn opposed the defendants’ memorandum with a motion to strike or tax costs. Therein he argued that, among other things, there could be no expert fee recovery because the lawsuit was still pending against six of the defendants with whom the dismissed defendants issued their joint offer to compromise. The motion to strike or tax costs was denied and the 14 dismissed defendants were awarded their share of post-offer costs and expert fees. Mr. Kahn appealed.

Reversed in part. The Second District Court of Appeal held the 14 dismissed defendants could not recover any expert fees until judgments were entered with regard to all 20 defendants. As prevailing parties, the Court of Appeal observed the dismissed defendants were entitled to their costs as a matter of right notwithstanding any provision for costs under Section 998.

As for expert fees, the Court of Appeal found the trial court had no basis to make an award until it could compare the joint offer to compromise with judgments as to all 20 defendants. Had the dismissed defendants issued individual offers to compromise, they would not need to wait for the entry of additional judgments to seek expert fees.

James L. Harris Painting & Decorating, Inc. v. West Bay Builders, Inc., (2015) 191 Cal.App.3d 825

James L. Harris Painting & Decorating, Inc. (“Harris”) filed a breach of contract/violation of California’s prompt payment statutes against West Bay Builders, Inc. (“West Bay”) and Safeco Insurance Company of America (“Safeco”). West Bay responded to Harris’ complaint by filing a cross-complaint of its own for breach of contract.

Harris, a painting subcontractor, contracted with West Bay, a general contractor, to provide painting services for a school construction project. Safeco, a bond company, issued a payment bond to West Bay for the project.

The case went to trial, and the jury found that Harris and West Bay both breached the contract at issue. Accordingly, the trial court entered judgment in favor of Harris on the complaint and judgment in favor of West Bay on the cross-complaint. Because the jury found that Harris and West Bay were both at fault, no damages were awarded to either side.

Following entry of judgment, West Bay and Safeco filed a motion for attorneys’ fees pursuant to California’s prompt payment statutes (Business & Professions Code § 7108.5, Public Contract Code §§ 7107, 10262.5). The prompt payment statutes provide for an award of attorneys’ fees and costs to the party who prevails on a claim for the violation of these statutes. The trial court denied the motion, finding there was no prevailing party. Harris and Safeco appealed.

Affirmed. The Third District Court of Appeal held the trial court did not abuse its discretion in determining there was no prevailing party to the lawsuit. While the Court of Appeal recognized the prompt payment statutes do not define the terms “prevailing party,” it also recognized there are situations, such as that in the case at hand, where “a party may obtain a result that is so minimal or insignificant as to justify a finding that it did not prevail.”

Ms. Straub is a graduate of Duquesne University School of Law in Pittsburgh, PA. The focus of her practice is business litigation, professional liability, and catastrophic personal injury litigation. Contact her at estraub@tysonmendes.com.

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