Category - Publications

1
Total Transportation Gets Hauled Away
2
Private Mediations Do Not Toll The Five-Year Prosecution Statute
3
CPAs’ Audit Report and Qualified Opinion Did Not Cause Company’s Or Investors’ Losses Where There Was No Evidence Of Reasonable Reliance
4
The Growing Threat of Automobile Cyber-Attacks
5
New Rules for Objections
6
Arbitration Update: An Overview of Recent California Appellate Decisions
7
SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims

Total Transportation Gets Hauled Away

How Worker Demands are Changing the Transportation Industry

By: David A. Napper and Neil A. Eddington
April 24, 2016

Total Transportation Services, Inc. (“TTSI”), a prominent drayage hauler out of the Los Angeles and Long Beach ports, recently filed for Chapter 11 bankruptcy. The bankruptcy filing is the direct result of workers’ demands for employee designation.1

For many years, drayage hauling – the short-distance transport of goods from local ports –functioned primarily through an “owner-operator” business model where drivers contracted to perform services using trucks they either own or lease. As a result, the drivers had always been characterized as independent contractors not employees. However, in 2010, after the IRS ruled a single TTSI driver was an employee, other TTSI drivers began to resist the model, filing their own suits to garner employee designation.2  For companies like TTSI, litigation expenses have piled up and led to bankruptcy; for the drayage hauling industry, the viability of its business model is in doubt.

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Private Mediations Do Not Toll The Five-Year Prosecution Statute

By: Zachary P. Marks
April 24, 2016

If you thought private mediation could toll the five-year period for case prosecution – think again. In a recent decision handed down by the Second District Court of Appeal, the court unequivocally held that voluntary, private mediations do not toll the five-year period before dismissal for failure to bring an action to trial.

California Code of Civil Procedure section 583.310 sets forth the applicable rule: “[a]n action shall be brought to trial within five years after the action is commenced against the defendant.” Section 1775.7(b) clarifies this rule, stating that the five-year period can be tolled if it is “submitted to mediation” within the final six months of the five-year period. However, the Code is silent with respect to the effect of tolling on public versus private mediations.

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CPAs’ Audit Report and Qualified Opinion Did Not Cause Company’s Or Investors’ Losses Where There Was No Evidence Of Reasonable Reliance

By: Kacey R. Riccomini
April 24, 2016

Accountants can breathe easier after Mosier v. Stonefield Josephson, Inc., CPAs (9th Cir., Feb. 23, 2016, No. 13-56453) 2016 WL 703104. Recently, the Ninth Circuit Court of Appeals, found that Stonefield, an accounting firm that was hired by PEMGroup and its related entities to audit financial statements, did not cause PEMGroup or its investors’ losses where there was no evidence the company or its investors actually or reasonably relied on the CPAs’ audit report, particularly when PEMGroup’s management defrauded investors and Stonefield issued qualified opinions of PEMGroup’s financial statements. Going forward, the Ninth Circuit’s decision will greatly impact professional liability suits against accountants, among others.

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The Growing Threat of Automobile Cyber-Attacks

By: Grace A. Nguyen and Alexandra R. Rambis
April 24, 2016

A number of breaches at high profile companies such as Target, Neiman Marcus, Home Depot and JP Morgan has pushed data security into the spotlight. Large companies, however, are not the only businesses susceptible to data breaches. Data security has now become a priority for the auto industry. While the technology in cars has become increasingly more sophisticated, it has also left automobiles vulnerable to the threat of cyber-attacks. In 2015, as an experiment, two researchers were able to hack into a Jeep Cherokee wirelessly.1 After hacking into the car, they were able to disable the car’s brakes, honk the horn, commandeer the steering wheel, turn off the car’s ignition, and could even track the car’s GPS coordinates and trace its route.

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New Rules for Objections

By: Craig A. Roeb and Chelsea Zwart
Published in the Los Angeles Daily Journal – Download Article
February 22, 2016

Only two months in, 2016 has already experienced significant changes to the California’s statutory and common law. Not to be left out, objections have received their fair share of attention from the Legislature and courts as well. As objections are often required to preserve future rights, being well-versed in the current laws governing them is an imperative for all litigators. This presents a brief overview of recent developments on the topic.

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Arbitration Update: An Overview of Recent California Appellate Decisions

A Primer on the Evolving Case Law Governing the Enforceability of Arbitration Clauses

By: Richard H. Glucksman, Craig A. Roeb and Grace A. Nguyen
Published in California Lawyer – Download Article
December 4, 2015

Arbitration is a common procedure for dispute resolution—specific clauses requiring arbitration frequently appear in both commercial and consumer contracts. Even so, lawyers continue to battle over when and how arbitration can be invoked. Those skirmishes have produced a flood of recent appellate decisions that has greatly transformed the availability and enforceability of arbitration.

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SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

Beginning July 1, 2014, SB 652 amends the Transfer Disclosure Statement required under Civil Code §1102.6 for residential property, to ask sellers about the following type of specified claims “threatening or affecting” the property:

  1. Claims for damages by the seller pursuant to Civil Code § 910 or 914.
  2. Claims for breach of warranty pursuant to Civil Code §900.
  3. Claims for breach of an enhanced protection agreement pursuant to Civil Code §903.
  4. Claims alleging defect or deficiency in the property or common area improvements pursuant to Civil Code §910 or 914.

Newly enacted SB 652 requires the seller of residential property to disclose to potential purchasers all specified claims of damages related to construction defects, including all pre-litigation claims presented to the builder and the status of those claims.

Existing law, pursuant to SB 800, requires a homeowner to follow a mandatory procedure prior to filing a construction defect lawsuit. The process requires the homeowner to submit the claim to the builder, and then gives the builder a right to repair the defects. If the builder fails to make repairs, or the repairs are not adequate, the homeowner may proceed with the filing of a lawsuit. While existing law also requires that a seller of residential property disclose at the time of transfer anything that materially affects the value of the property, there is no requirement that a homeowner notify a potential buyer of a construction defect within the home.

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