|A pink neon "Appeals" sign resides in GMSR's library. The sign was donated to GMSR by its associates on GMSR's fifth anniversary. It is a tradition at GMSR to turn on the sign to commemorate a successful appellate outcome.
The light goes on frequently. Below are some recent occasions for Gary J. Wax:
Recent Wins: Gary J. Wax
Court of Appeal affirms summary judgment for GMSR’s client, rejecting insurance coverage of slow, continuous water leak
April 2, 2013
Brown et al. v. Mid-Century Insurance Company (2013) 2013 Cal.App. Unpub. LEXIS 2389 (California Court of Appeal, Second Appellate District, Division Seven) [unpublished]. A water pipe corroded over several decades until water began to leak from two small holes and collect underneath the insureds’ house. The leak continued unnoticed, eventually collecting enough water to cause noticeable mold and condensation to appear within the house’s interior. A month later, the homeowners discovered the source of the mold and condensation—the water discharged from the pipe. The homeowners’ policy did not cover mold damage and only covered water damage if caused by a “sudden and accidental” discharge; it specifically excluded continuous or intermittent discharges. Affirming summary judgment for GMSR’s carrier client, the Court of Appeal held that the leak had indisputably “occurred over a period of time” and that, as a matter of law, the water discharge was not “sudden.” The Court rejected the homeowners’ expert’s “metaphysical moment theory”—i.e., in a “nanosecond” the pipe went from a water-tight condition to a non-water-tight condition—as a basis for a “sudden” discharge because accepting it would impermissibly “read the temporal component of the term ‘sudden’ out of the Policy.”
Brown et al. v. Mid-Century Insurance Company (2013) 2013 Cal.App. Unpub. LEXIS 2389
Court of Appeal affirms summary judgment in favor of GMSR’s public entity client in government tort claim dispute
January 15, 2013
San Jose v. Los Angeles County Metropolitan Transportation Authority et al. (2013) 2013 Cal.App. Unpub. LEXIS 297 (California Court of Appeal, Second Appellate District, Division Two) [unpublished]. GMSR’s client, Los Angeles County Metropolitan Transportation Authority (the MTA) rejected plaintiff’s government tort claim through its duly authorized agent, a private claim-administration company, which triggered a six-month statute of limitations. When plaintiff filed her complaint for damages more than six months later, the trial court granted summary judgment in the MTA’s favor. Plaintiff argued at trial and on appeal that the MTA’s delegation of its claim administration duties to a private third-party was unauthorized by law and that the agent’s rejection was ineffective, thereby triggering a longer statute. The Court of Appeal affirmed the trial court’s finding that the Public Utilities Code authorized the MTA’s delegation of claim-administration duties and that no authority in the Government Code precluded it.
San Jose v. Los Angeles County Metropolitan Transportation Authority et al. (2013) 2013 Cal.App. Unpub. LEXIS 297
Court of Appeal affirms summary judgment in favor of GMSR’s carrier client in first-party coverage dispute
December 18, 2012
Cardio Diagnostic Imaging, Inc. v. Farmers Group, Inc. et al. (2012) 212 Cal.App.4th 69 (California Court of Appeal, Second Appellate District, Division Two) [published]. When a sewer backed up in the building where plaintiff had its office, water overflowed a toilet in an upper-floor office and then seeped down and caused damage in plaintiff’s lower-level suite. The carrier, GMSR’s client, denied coverage under the standard provision in plaintiff’s policy that excluded water damage caused directly or indirectly by water that “backs up or overflows from a sewer, drain or sump.” Plaintiff sued for breach of contract and bad faith. The trial court granted the carrier’s summary judgment motion, finding that the provision unambiguously excluded the damages from coverage. The Court of Appeal affirmed. It agreed that the exclusion is unambiguous, and held the word “overflows”—preceded by the word “or”—means something different than “backs up.” In doing so, it flatly rejected plaintiff’s interpretation of the phrase “backs up or overflows” as redundant, and found that the language was not reasonably susceptible to the interpretation plaintiff asserted “because that interpretation can be reached only by ignoring part of the language.”
Cardio Diagnostic Imaging, Inc. v. Farmers Group, Inc. et al. (2012) 212 Cal.App.4th 69
Court affirms denial of attorney fee award to opponent of GMSR’s public entity client
May 23, 2011
Martinez v. Los Angeles County Metropolitan Transportation Authority (2011) 195 Cal. App. 4th 1038 (California Court of Appeal, Second Appellate District, Division One) [published]. Plaintiff accepted a settlement offer under Code of Civil Procedure section 998 from GMSR’s client, Los Angeles County Metropolitan Transportation Authority. The offer provided that each party bear its own costs, but said nothing about attorney fees. The trial court denied plaintiff’s subsequent motion for statutory attorney fees on the ground that they were costs plaintiff had agreed to bear. The Court of Appeal affirmed. Creating a new “bright-line rule,” the court held: “Unless the offer expressly states otherwise, an offer of a monetary compromise under section 998 that excludes ‘costs’ also excludes attorney fees.”
Martinez v. Los Angeles County Metropolitan Transportation Authority (2011) 195 Cal. App. 4th 1038
Court reverses trial court's refusal to add alter ego judgment debtors
December 30, 2010
Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486 (California Court of Appeal, Second Appellate District, Division One) [published]. While attempting to collect an $8 million arbitration award that GMSR had successfully defended against vacatur, GMSR’s client learned that the defendant companies had transferred nearly all of their assets to related companies and to a family trust that owned the companies. GMSR’s client filed a motion under Code of Civil Procedure section 187 to add these entities as judgment debtors, along with the companies’ manager, who had created the trust. The trial court denied the motion both on legal grounds and because the trial court excluded nearly all of the relevant evidence. The Court of Appeal reversed. First, the court held that a judgment could be amended to add an alter ego even when that alter ego had prevailed on unrelated causes of action in the underlying arbitration. Second, the court held that alter ego liability applies equally to trustees. Third, the court clarified the standard necessary to establish the virtual-representation requirement for adding judgment debtors and found that it was met here. Finally, the court overturned almost all of the trial court’s evidentiary rulings.
Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486
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