Economic Theory Shows that People Will Make Choices that Worsen the Pandemic

NEIL H. BUCHANAN

UF Levin College of Law professor and economist Neil H. Buchanan points out some of the ways in which congressional Republicans misunderstand economics to justify withholding unemployment payments from Americans during the COVID-19 pandemic. Buchanan argues that economic theory soundly demonstrates that given the opportunity, people will make choices that worsen the toll of the pandemic.

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Holley v. Silverado Senior Living Management

Docket: G058576(Fourth Appellate District)

Opinion Date: August 7, 2020

Judge: Moore

Areas of Law: Arbitration & Mediation, Civil Procedure, Health Law, Personal Injury

Defendants Silverado Senior Living Management, Inc., and Subtenant 350 W. Bay Street, LLC dba Silverado Senior Living – Newport Mesa appealed a trial court's denial of its petition to compel arbitration of the complaint filed by plaintiffs Diane Holley, both individually and as successor in interest to Elizabeth S. Holley, and James Holley. Plaintiffs filed suit against defendants, who operated a senior living facility, for elder abuse and neglect, negligence, and wrongful death, based on defendants’ alleged substandard treatment of Elizabeth. More than eight months after the complaint was filed, defendants moved to arbitrate based on an arbitration agreement Diane had signed upon Elizabeth’s admission. At the time, Diane and James were temporary conservators of Elizabeth’s person. The court denied the motion, finding that at the time Diane signed the document, there was insufficient evidence to demonstrate she had the authority to bind Elizabeth to the arbitration agreement. Defendants argued the court erred in this ruling as a matter of law, and that pursuant to the Probate Code, the agreement to arbitrate was a “health care decision” to which a conservator had the authority to bind a conservatee. Defendants relied on a case from the Third District Court of Appeal, Hutcheson v. Eskaton FountainWood Lodge, 17 Cal.App.5th 937 (2017). After review, the Court of Appeal concluded that Hutcheson and other cases on which defendants relied are distinguishable on the facts and relevant legal principles. "When the Holleys signed the arbitration agreement, they were temporary conservators of Elizabeth’s person, and therefore, they lacked the power to bind Elizabeth to an agreement giving up substantial rights without her consent or a prior adjudication of her lack of capacity. Further, as merely temporary conservators, the Holleys were constrained, as a general matter, from making long-term decisions without prior court approval." Accordingly, the trial court was correct that the arbitration agreement was unenforceable as to Elizabeth. Furthermore, because there was no substantial evidence that the Holleys intended to sign the arbitration agreement on their own behalf, it could not be enforced against their individual claims. The Courttherefore affirmed the trial court’s order denial to compel arbitration.

Ghazarian v. Magellan Health

Docket: G057113(Fourth Appellate District)

Opinion Date: August 7, 2020

Judge: Moore

Areas of Law: Civil Procedure, Contracts, Health Law, Insurance Law

Plaintiffs Rafi Ghazarian and Edna Betgovargez had a son, A.G., with autism. A.G. received applied behavior analysis (ABA) therapy for his autism under a health insurance policy (the policy) plaintiffs had with defendant California Physicians’ Service dba Blue Shield of California (Blue Shield). Mental health benefits under this policy are administered by defendants Magellan Health, Inc. and Human Affairs International of California (collectively Magellan). By law, the policy had to provide A.G. with all medically necessary ABA therapy. Before A.G. turned seven years old, defendants Blue Shield and Magellan approved him for 157 hours of medically necessary ABA therapy per month. But shortly after he turned seven, defendants denied plaintiffs’ request for 157 hours of therapy on grounds only 81 hours per month were medically necessary. Plaintiffs requested the Department of Managed Health Care conduct an independent review of the denial. Two of the three independent physician reviewers disagreed with the denial, while the other agreed. As a result, the Department ordered Blue Shield to reverse the denial and authorize the requested care. Plaintiffs then filed this lawsuit against defendants, asserting breach of the implied covenant of good faith and fair dealing against Blue Shield, and claims for intentional interference with contract and violations of Business and Professions Code section 17200 (the UCL) against defendants. Defendants each successfully moved for summary judgment. As to the bad faith claim, the trial court found that since one of the independent physicians agreed with the denial, Blue Shield acted reasonably as a matter of law. As to the intentional interference with contract claim, the court found no contract existed between plaintiffs and A.G.’s treatment provider with which defendants could interfere. Finally, the court found the UCL claim was based on the same allegations as the other claims and thus also failed. After its review, the Court of Appeal concluded summary judgment was improperly granted as to the bad faith and UCL claims. "[I]t is well established that an insurer may be liable for bad faith if it unfairly evaluates a claim. Here, there are factual disputes as to the fairness of defendants’ evaluation. . . .There are questions of fact as to the reasonability of these standards. If defendants used unfair criteria to evaluate plaintiffs’ claim, they did not fairly evaluate it and may be liable for bad faith." Conversely, the Court found summary judgment proper as to the intentional interference with contract claim because plaintiffs failed to show any contract with which defendants interfered.

California v. Cardenas

Docket: E070624(Fourth Appellate District)

Opinion Date: August 7, 2020

Judge: Menetrez

Areas of Law: Constitutional Law, Criminal Law

A brief encounter between two groups of strangers in a restaurant parking lot at closing time ended in one man shot and killed. Three others were injured. Pedro Cardenas was one of the shooters, and convicted by jury trial on one count of murder, two counts of attempted murder, and one count of assault with a firearm, and he pled guilty to one count of being a felon in possession of a firearm. The trial court instructed the jury on the "kill zone" theory as to the attempted murder counts. On the felon in possession count, Cardenas argued that his rights under California v. Arbuckle, 22 Cal.3d 749 (1978) were violated because he was sentenced by a different judge from the one who took his guilty plea. Cardenas did not object on that basis at sentencing, but he cited California v. Bueno, 32 Cal.App.5th 342 (2019) for the proposition that he did not thereby forfeit the issue. A split Court of Appeal concluded that the evidence was insufficient to justify instructing on the kill zone theory under California v. Canizales, 7 Cal.5th 591 (2019), and the error was prejudicial. The Court therefore vacated the attempted murder convictions. The Court disagreed with Bueno and held that Cardenas forfeited the Arbuckle issue by failing to raise it at sentencing. The Court affirmed in all other respects.

California v. Tacardon

Docket: C087681(Third Appellate District)

Opinion Date: August 7, 2020

Judge: Andrea Lynn Hoch

Areas of Law: Constitutional Law, Criminal Law

Defendant Leon Tacardon was charged with possession of a controlled substance for sale, and misdemeanor possession of marijuana for sale. Evidence of these crimes was seized following an interaction with San Joaquin County Sheriff’s Deputy Joel Grubb. After an unsuccessful motion to suppress evidence made during the preliminary hearing under Penal Code section 1538.5, defendant renewed his motion under Penal Code section 995, and prevailed. The State appealed. Based on the magistrate’s factual findings expressed on the record and supported by substantial evidence, the Court of Appeal concluded defendant was detained by Deputy Grubb not when the deputy detained defendant's passenger, M.K., but when the deputy, after smelling marijuana coming from the BMW and seeing three large bags of the substance on the rear floorboard, told defendant to remain in the car while he conducted a records check. "At that point, there can be no doubt the deputy possessed reasonable suspicion defendant was engaged in criminal activity." The Court concluded the superior court erred by setting aside the magistrate’s ruling denying defendant’s motion to suppress evidence.

C.W. Johnson & Sons, Inc. v. Carpenter

Docket: B300187(Second Appellate District)

Opinion Date: August 7, 2020

Judge: Arthur Gilbert

Areas of Law: Construction Law

After the trial court sustained without leave to amend a demurrer to a building contractor's second amended cross-complaint for breach of contract and quantum meruit based on the ground that the contractor was not licensed during part of the contract, the contractor appealed. The Court of Appeal reversed and overruled the demurrer, holding that the contractor is entitled to an evidentiary hearing on whether it substantially complied with contractor licensing law. In this case, although the contractor cannot divide a single contract into segments and claim compensation for work performed during the segment for which it was licensed, the court held that the contractor acted reasonably and in good faith prior to the license's suspension and thus the contractor is entitled to a hearing under Business and Professions Code section 7031, subd. (a).

In re I.B.

Docket: G058814(Fourth Appellate District)

Opinion Date: August 7, 2020

Judge: Kathleen E. O'Leary

Areas of Law: Family Law

The trial court granted A.B.’s (Mother) Welfare and Institutions Code section 388 petition to return her three-year-old son (I.B.) to her care. The court ordered that I.B.’s older brother A.B. (five-years-old) would remain with foster parents who had been interested in adopting both boys. I.B.’s counsel filed this appeal, arguing the siblings should not have been separated. In addition, I.B.’s counsel and the Orange County Social Services Agency (SSA), agreed the juvenile court erred because Mother did not demonstrate a change in circumstances, or that changing I.B.’s custody was in his best interests. Mother and A.M. (Father) filed briefs asserting the trial court’s ruling should not be disturbed. Mother also filed a request asking the Court of Appeal to take judicial notice of a recent order showing the attorney representing both I.B. and A.B. declared a conflict of interest and now only represented A.B. After carefully reviewing the record, "while it is a close case," the Court of Appeal could not say the trial court abused its discretion. The Court therefore affirmed the order granting Mother’s section 388 petition. The Court granted her request for judicial notice of the juvenile court’s order dated April 3, 2020.

Oh v. Teachers Insurance & Annuity Ass'n of America

Docket: B297567(Second Appellate District)

Opinion Date: August 7, 2020

Judge: Elizabeth A. Grimes

Areas of Law: Personal Injury

Plaintiffs filed suit against TIAA, and the companies that managed TIAA's property, after their son died when a hair care product he was handling at work exploded and he was engulfed in the resulting fire. In this case, the employer did not know the product was dangerous and thus did not comply with legal requirements for storing and labeling hazardous materials, or with provisions in the lease of the premises where the fire occurred. The trial court granted defendants' motions for summary judgment. The Court of Appeal affirmed, agreeing with the trial court that there was no evidence defendants had actual or constructive knowledge the employer was storing and handling a hazardous material, and thus defendants owed no duty to the decedent. Therefore, the evidence shows no triable issue of material fact and defendants were entitled to summary judgment on the negligence per se, wrongful death, and survival causes of action.