Gerold C. Dunn

The case involved Major Clients Agency suing attorney John Diemer for equitable indemnity, alleging that Diemer's failure to adequately review contract language in negotiations between the agency and Franklin (with Lorimar) caused damages from subsequent settlements. The trial court sustained Diemer's demurrer without leave to amend, dismissing the case, and the appellate court affirmed. The court reasoned that Diemer owed no duty of care to Major Clients, who were not his clients and not intended beneficiaries of his legal services, and thus no cause of action for indemnity could be stated.

proceduretorts & liabilitybusiness & regulatory

The case involved a minor plaintiff who obtained a personal injury judgment against insured defendants and then sued their liability insurers for breach of contract and bad faith after an 81-day delay in paying the remaining balance due on the judgment, including interest. The plaintiff sought emotional distress damages based on the insurers' delay, which he attributed to a dispute between the insurers over costs and a pretrial settlement. The trial court granted summary judgment to the insurers, and the appellate court affirmed, holding as a matter of law that the mere loss of use of money during the brief delay did not satisfy the required threshold of financial loss needed to recover emotional distress damages in first- or third-party insurance bad faith actions. The court reasoned that emotional distress damages are recoverable only when plaintiffs suffer some financial loss, and precedent establishes that loss of use alone during a short payment delay fails to meet this element, leaving no triable issue of fact on damages.

torts & liabilityprocedure

The case concerned whether the California Horse Racing Board's regulation 1859.5, which mandates automatic disqualification of horses and forfeiture of purses upon a finding of prohibited substances like scopolamine in post-race samples, conflicts with Business and Professions Code section 19582.5, which authorizes discretionary action by the board. The board had applied the rule to disqualify three horses after trace amounts of the drug were found from contaminated straw bedding, exonerating the trainers but ordering purse returns. The trial court granted a writ of mandate, ruling the regulation impermissibly eliminated required discretion. The Court of Appeal reversed, concluding the regulation is consistent with the statute's grant of authority to adopt rules preserving racing integrity, including mandatory disqualification provisions.

business & regulatory

In Johnson v. State Bar of California, former attorney Charles Johnson challenged a State Bar Client Security Fund Commission decision reimbursing client Hardistene Howard $901 after Johnson accepted $1,000 to pursue a legal malpractice claim but spent only $99 on a filing fee, failed to prosecute the case (leading to its dismissal), and retained the balance without proper authorization. Johnson petitioned the superior court for a writ of mandate, which was denied; the court applied the substantial evidence standard of review and found the commission's ruling proper under either that or independent judgment review. The Court of Appeal affirmed, holding that Johnson's retention of unearned funds constituted dishonest conduct under Client Security Fund rules as a wrongful taking or conversion, that no specific intent was required, and that his claimed work on an unapproved workers' compensation matter did not justify the fee under Labor Code provisions. The court concluded ample evidence supported the reimbursement order.

business & regulatoryprocedure

In Dubois v. Corroon & Black Corp., the plaintiff filed suit in 1987 alleging negligent misrepresentation and breach of an insurance sales contract, but the case remained inactive for over four years with no at-issue memorandum filed due to an oversight by successive associates at his law firm. The trial court, on its own motion, dismissed the action under Code of Civil Procedure section 583.420 for unreasonable delay in prosecution and later denied reconsideration or relief under section 473. The Court of Appeal affirmed, ruling that the trial court had not abused its discretion because the plaintiff had not shown excusable delay or that dismissal would cause injustice, even absent demonstrated prejudice to the defendants.

procedure

In Harris v. State Personnel Board, a state university clerical employee was automatically deemed to have resigned under Education Code section 89541 after five days of absence without leave following a work-related back injury, despite conflicting medical advice on his return-to-work date. The State Personnel Board initially denied reinstatement but later ordered it effective October 1979 without back pay; after further mandamus proceedings, the employee sought back wages for the period until his actual return in 1981. The trial court sustained a demurrer and dismissed the petition because the employee had not first presented a claim to the State Board of Control under Government Code section 905.2. The Court of Appeal reversed, holding that the claim for unpaid wages arose from the employment contract rather than tort liability, so the Tort Claims Act's claim-presentation requirement did not apply and mandamus was an appropriate vehicle to seek the relief.

labor & employmentprocedure