On June 9, 2016, the California Supreme Court decided Nickerson v. Stonebridge Ins. Co., which I argued in April. The Court unanimously held that so-called “Brandt fees” in insurance bad-faith cases could be included in the calculation of punitive damages. Thanks to my co-counsel, Bill Shernoff, his team, and my son Clint Ehrlich, who helped me on the briefing. It’s an honor to be making new bad-faith law with Bill Shernoff.
On February 22, 2012, the California Supreme Court denied review in Gonzales v. Southern California Gas Co., but it also ordered that the decision not be published in the Official Appellate Reports of the state. Hence, the decision in Gonzales will not be citeable as authority in California courts. The appellate opinion in Gonzales held that the property owners were categorically exempt from liability for the placement of fixed objects on their property, even if the object was a natural-gas distribution facility that would cause a conflagration if struck by a car. Jeffrey I. Ehrlich filed a letter requesting depublication of the Gonzales decision on behalf of the Consumer Attorneys of California. It was the only depublication letter filed.
On May 11, 2011, the California Supreme Court granted review in Hodge v. Aon Insurance Services, No. S191415. The plaintiffs in Hodge are insurance adjusters employed by Cambridge Integrated Services, a third-party claims adjusting firm. Plaintiffs claim that they were entitled to overtime compensation; Cambridge claims they were performing “administrative” work and were therefore exempt. The trial court ruled against plaintiffs, and the Second Appellate District, Div. 8, affirmed in a published opinion, Hodge v. Aon Ins. Services (2011) 192 Cal.App.4th 1361. That opinion has been de-published as a result of the Supreme Court’s order. The Court has deferred briefing on the case until it resolves another pending matter that deals with overtime compensation for insurance adjusters, Harris v. Superior Court.
May 2011 – Counsel for Ralphs’ does not acknowledge that their position was that truck drivers and their employers should be immune from civil liability for the driver’s decision to illegally park a 40-ton obstacle on the freeway shoulder so he could eat a banana and have a cup of tea. Under Ralphs’ theory, truck drivers could park their trucks alongside California freeways anywhere they pleased, for any reason, and as long as they were not blocking a traffic lane there would be no recourse if a passing motorist momentarily swerved onto the shoulder and struck the illegally-parked truck.
In a unanimous decision the California Supreme Court reversed a JNOV ordered by the Court of Appeal in Cabral v. Ralph’s Grocery Co. The decision reinstates a wrongful death judgment on behalf of the family of Adelmo Cabral, who was killed when his car veered off the freeway and collided with the back of a Ralph’s tractor-trailer rig that had been parked 16 feet from the freeway while its driver had a snack.
The jury held that Ralphs’ was 10% at fault for the crash, but the appellate court reversed, finding that the crash was “unforseeable” and that truck drivers therefore owed no duty to passing freeway motorists in the manner in which they parked their trucks as long as they were out of the travel lanes. The Supreme Court rejected all of the appellate court’s reasoning. The decision is important because it expressly curtails the practice used by trial and appellate courts with increasing frequency to decide negligence cases as a matter of law by finding that the defendant owed the plaintiff no duty of care on the particular facts of the case.
The Court held that the decision that no duty of care is owed — which is more accurately framed as a finding that an exception should be made to the general duty of care imposed on all persons by California law — “is to be made on a more general basis suitable to the formulation of a legal rule.” As a result, the Cabral decision will mean that more negligence cases in California will be decided by juries, based on the specific facts of the case, and not by courts based on a finding that no duty exists.
Read The Decision (.pdf)
On February 8, 2011, Jeffrey Ehrlich argued Cabral v. Ralph’s Grocery Co. in the California Supreme Court. The case presents the issue of whether truck drivers owe a duty of care to passing motorists when they park alongside California freeways.
For more information, read, High Court Signals It May Rule Against Ralphs In Truck Crash. Daily Journal. Wednesday, February 9, 2011. (.pdf)
Case Update: February 28, 2011. Ehrlich Law Firm wins landmark negligence ruling in California Supreme Court: Unanimous Decision in Cabral v. Ralphs
On August 11, 2010, Jeffrey I. Ehrlich, principal of The Ehrlich Law Firm filed a depublication request (L.A. Checker Cab Cooperative, Inc. v. First Specialty Ins. Co.) on behalf of the Consumer Attorneys Association of California. On October 27, 2010, the California Supreme Court granted the request for depublication in the L.A. Checker Cab decision.
Depublication of Court of Appeal decisions by the Supreme Court of California used to be a common practice, but in recent years has become quite uncommon. Fewer than 12 cases a year have been ordered depublished in the last few years.
The significance of the depublication of LA Checker Cab is this: the decision effectively eliminated all insurance coverage in California for any claims of negligent supervision or negligent hiring, because the court held that such claims did not qualify as an “occurrence” that is necessary to trigger coverage. Depublication of the decision means that the decision cannot be cited as precedent in California courts, and therefore California trial courts are not required to follow it.
Read Depublication Request: L.A. Checker Cab Cooperative, Inc. v. First Specialty Ins. Co.; 186 Cal. App. 4th 767, No. B213948 (Second District iv. One); Order published: July 13, 2010
A unanimous California Supreme Court held that a “severability of insurance” clause made a homeowner’s liability policy ambiguous where the insurer sought to rely on an exclusion that withdrew coverage for all insureds under the policy based on the intentional acts of one insured. Plaintiff Scott Minkler holds a $5 million judgment against David Schwartz, who molested him, and against David’s mother, Betty, for negligently failing to stop the wrongful conduct. Betty’s insurer rejected coverage, arguing that the intentional-acts exclusion in the policy, which withdrew coverage for any claim arising from the intentional acts of “an” insured, applied to the claims against Betty because David’s conduct was intentional. The Supreme Court adopted the approach advanced by the Ehrlich Law Firm, finding that the policy’s severability provision, which states that “this insurance applies separately to each insured” would lead a reasonable insured to conclude that he or she would be treated as the only insured under the policy. Because most liability policies have severability clauses, the Minkler case may substantially broaden coverage in California for failure-to-supervise claims. Minkler v. Safeco (2010) __ Cal.4th __.)
Ehrlich Law Firm prevails in California Supreme Court on case involving important issues of California civil-writ practice and procedure. In a closely-watched case involving civil-writ procedure in California, the California Supreme Court adopted the position advocated by the Ehrlich Law Firm, and held that appellate courts can properly issue so-called “speaking” or “suggestive” Palma notices when they are inclined to issue a peremptory writ of mandate in the first instance. A Palma notice informs the parties that an appellate court is inclined to grant a peremptory writ in the first instance.
California Supreme Court grants petition for review filed by Ehrlich Law Firm. Adelamo Cabral was killed when he lost control of his pickup truck on I-10 and slammed into a big-rig truck illegally parked on the shoulder. At trial, the jury held that the truck’s driver and owner were 10% at fault for the collision. The Court of Appeal reversed, finding that the trial court should have granted a JNOV against the Cabral family’s wrongful-death action because there was no duty by the truck driver to create a “safe landing” for Cabral. The Ehrlich Law Firm filed a petition for review in the California Supreme Court, arguing that the Court of Appeal’s approach would make California freeways more dangerous by allowing truck drivers to park their rigs alongside the freeway with impunity. The Court granted the petition, and the matter is being briefed. (Cabral v. Ralph’s Grocery Co. No. S. 178799.)
Waters, Kraus & Paul, with one of the premier asbestos-litigation practices in the U.S., hired the Ehrlich Law Firm to argue an important products-liability case, O’Neil v. Crane Co. in the Court of Appeal, Second District, Div. 5.
The issue in O’Neil was whether sailors injured by asbestos released during the maintenance of valves and pumps that were manufactured to contain asbestos within them, and that were insulated with asbestos, could be held liable on theories of strict products liability and negligence, even if the asbestos material in the equipment had been replaced with other asbestos material during the product’s life.
In Taylor v. Elliott Turbomachinery Co., Inc. (2009) 171 Cal.App.4th 564, the Court of Appeal , First District, held that the manufacturers could not be held liable because the asbestos was not “their” product.
Ehrlich convinced the court not to follow Taylor, and in a written decision the court held that Taylor had been wrongly decided. (O’Neil v. Crane Co. (2010) 177 Cal.App.4th 1019.) The Supreme Court later granted review to resolve the conflict between the positions advocated in O’Neil and Taylor. Ehrlich is expected to argue the matter in the California Supreme Court.
Scott Minkler appealed the district court’s order granting summary judgment on his claim against Safeco Insurance Company under a homeowner’s liability policy. Minkler’s claims arose out of Safeco’s refusal to defend Betty Schwartz, whose son David molested Minkler. Safeco denied coverage because of an exclusion in its policy for claims arising from the acts of “an” insured, because David was a resident of Betty’s home, and hence an insured under her policy. The issue in the case is the proper construction of a provision in the Safeco policy stating that “This insurance applies separately to each insured.” The Ninth Circuit, at the Ehrlich Firm’s request, has asked the California Supreme Court to decide the meaning of that provision. Minkler v. Safeco Ins. Co., 561 F.3d 1033 (9th Cir. 2009).
Insurance companies in California can no longer prevail in bad-faith lawsuits brought by their policyholders simply by showing that there was a “dispute” about whether the insurer should pay the claim. In Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, the Supreme Court reined in the so-called “genuine dispute rule” that had become the insurance industries’ most potent defense in bad-faith cases, holding that the rule only applied at the summary-judgment stage, and then only in cases where a jury would be unable to make a finding that the insurer had acted unreasonably.
The Wilson ruling makes it much harder for insurers to obtain summary judgment in bad-faith lawsuit.