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An Exception to the Exception - The Special Errand Rule

In Morales-Simental v. Genentech, Inc., 2017 Cal. App. LEXIS 915, Plaintiffs and appellants Morales-Simental, et al. appealed from a summary judgment granted in favor of defendant and respondent Genentech, Inc.  Plaintiffs alleged they suffered injuries and sustained damages as a result of the negligence of Vincent Inte Ong, an employee of Genentech Inc., during a vehicle collision.  The issue was whether or not Ong was acting within the scope of his employment at the time of the collision.  The court looked to the doctrine of respondeat superior. 

Ninth Circuit Upholds California Tax Appeals Process as Providing a Plain, Speedy, and Efficient Remedy

In Hyatt v. Yee, the plaintiff disputed the California Franchise Tax Board's ("FTB's") determination that he owed $7.4 million in unpaid taxes for the 1991 and 1992 tax years on the ground that he moved to Nevada in 1991. Under California law, a plaintiff contesting an assessment may not litigate in state court until exhausting administrative remedies set out in Cal. Rev. & Tax Code § 19381. Generally, a plaintiff must first pay the disputed tax before seeking a refund. Cal. Rev. & Tax Code § 19382. Under this "pay-then-protest" scheme, if the FTB does not mail a notice of action on the claim within six months, the plaintiff may sue in state court. Cal. Rev. & Tax Code § 19385. However, if a plaintiff is contesting an assessment solely based on residency, he may instead opt to "protest-then-pay" a tax by seeking reconsideration in front of the FTB, appealing to the State Board of Equalization ("SBE"), and then suing in state court. See Cal. Rev. & Tax Code §§ 19044 & 19381.

Employees May Recover Penalties for Inadvertent Wage Statement Errors Without Any Showing of "Injury"

California Labor Code § 226(a) requires employers to provide accurate, itemized wage statements that show, among other things, gross and net wages earned, total hours worked, all applicable hourly rates, total deductions, the dates of the pay period, and the employee's name and the last four digits of his Social Security number or an employee identification number. § 226(e) entitles an employee bringing suit in his or her individual capacity to recover penalties of up to $4,000, plus attorney's fees and costs if he or she establishes that an employer "knowingly and intentionally" failed to comply with § 226(a) and that he or she suffered "injury" as a result.

Valuation for Cramdown is "Replacement-Value" Not "Foreclosure-Value"

In Sunnyslope Housing Ltd. Partnership, the Ninth Circuit held that for chapter 11 cramdown purposes, the valuation of property need not account for the potential extinguishment of subordinated affordable housing covenants which, if extinguished through foreclosure, would significantly increase the value of the property. As such, the Ninth Circuit allowed the much lower valuation of the property which assumed the covenants were in place and allowed the debtor to value the senior lender's secured claim at a very low number. This allowed the debtor to value the lender's secured claim at a low amount and treat the rest of its claim as unsecured under Bankruptcy Code section 506(a). 

California Corporations - Virtual Shareholder Meetings

A "Virtual Shareholder Meeting" is one in which the shareholders not physically present in person or by proxy participate in a meeting through electronic transmission or electronic video screen. California permits all or partial Virtual Shareholder Meetings, subject to numerous limitations and requirements.

California Fair Pay Act Seeks to Expand and Strengthen California Equal Pay Act of 1949

The California Equal Pay Act of 1949 was enacted to eliminate gender discrimination in the workplace by providing "equal pay for equal work." As of January 1, 2016 the California Fair Play Act amended the EPA taking an even more aggressive approach. The amendment now provides for equal pay for "substantially similar work" regardless of work title or work location. Though "substantially similar work" was not defined in the Act, the California Department of Industrial Relations indicated on their website that it means "work that is similar in skill, effort, responsibility, and performed under the same working conditions."

Americans with Disabilities Act Compliance Update

Starting July 1, 2013 California Civil Code § 1938 requires commercial property owners to disclose in every lease whether or not the property has been inspected by a "Certified Access Specialist" ("CASp"). CASps are individuals certified by California as qualified and knowledgeable regarding construction related access to public accommodations.

Ninth Circuit Applies California Supreme Court's Holding in Carmack v. Reynolds, Holding That Spendthrift Trust Distributions Are Property of the Estate and Confirming the Types of Distributions Which Need to Be Turned Over

On August 16, 2017, the Ninth Circuit Court of Appeals, more than two years after it issued an order certifying a probate question to the California Supreme Court, held that a bankruptcy estate is entitled to the full amount of spendthrift trust distributions due to be paid as of the petition date. However, based on the California Supreme Court's opinion in Carmack v. Reynolds, 391 P.3d 625, 628 (Cal. 2017), the Ninth Circuit confirmed that the estate may not access any portion that the beneficiary needs for his/her support or education (so long as the trust specifies that is the purpose of the funds). See also Cal. Prob. Code § 15302. The Ninth Circuit further held that the bankruptcy estate may also reach 25 percent of expected future payments from the spendthrift trust, reduced by amounts needed by the beneficiary to support himself/herself and his/her dependents. Carmack v. Reynolds, 391 P.3d at 632; Cal. Prob. Code § 15306.5.

Contingent Interest in Commissions Earned Post-Petition Can Be Bankruptcy Estate Property

In re Anderson, BAP No. ID-16-13156-JuFB, filed on August 11, 2017, the Ninth Circuit Bankruptcy Appellate Panel upheld the Bankruptcy Court's finding that the debtors' contingent real estate commissions were estate property. The debtors were real estate agents. When they filed their bankruptcy petition, they had 13 transactions which were under contract and in escrow but had not yet closed. Under Idaho state law, the debtors were not entitled to payment of their commissions until the transaction closed. The closings did not occur until after the filing of the bankruptcy. The Bankruptcy Court found, and the BAP agreed, that because the interest in the commissions was sufficiently rooted in the pre-bankruptcy past and especially because the debtors were unable to show that any of the acts necessary to earn the commissions were performed post-petition, the commissions were property of the bankruptcy estate.

On the Seventh Day Thou Shalt Rest - California Supreme Court Clarifies Labor Code's "One Day's Rest in Seven" Requirement

The California Supreme Court recently issued Mendoza v. Nordstrom, Inc., 2 Cal.5th 1074 (2017), clarifying California Labor Code §§ 551 and 552's requirements that an employee is entitled to one day of rest in seven and that an employer shall not cause an employee to work more than six days in seven.

Mendoza was an ex-Nordstrom employee. On several occasions a supervisor or coworker asked him to fill in for another employee. As a result, he worked more than six consecutive days. Some but not all of his shifts lasted six hours or less.

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