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California › Breach of Duty

Patton Sullivan Brodehl LLP

LLCs Can Assert Offensive Claims Against Members

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In “business divorce” litigation involving LLCs, it is common to see a disgruntled LLC member asserting claims against the LLC’s manager. Depending on the type of harm alleged, those claims might be asserted directly (by the...more

Wiley Rein LLP

Ninth Circuit Affirms Ruling That Section 533 Bars Coverage for Defense Costs and Indemnity When Claims Broadly Allege Willful...

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The United States Court of Appeals for the Ninth Circuit, applying California law, has affirmed a district court’s determination that California Insurance Code § 533 barred indemnity and defense costs coverage for a lawsuit...more

McDermott Will & Schulte

Sour Grapes: Attorney’s Oral Agreement Might Be Okay if Fair, Just, and Fully Advised

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The US Court of Appeals for the Ninth Circuit found that a district court erred in declaring on summary judgment that an attorney had no ownership interest in a winery because the alleged agreement was made orally. The Ninth...more

McGlinchey Stafford

Court Clarifies HOA Responsibilities in Tenant vs. Tenant Conflicts

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Often, in litigation between an owner and their homeowners association (HOA), there is a question regarding the nature and the extent of the duty owed by the HOA to an owner (or even to a tenant of an owner). The answer to...more

Allen Matkins

Just What Are The Duties Of A Controlling Shareholder And How Should Claims Of Breach Be Brought?

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In a recent post, Professor Stephen Bainbridge discusses the question of when a controlling shareholder owes fiduciary duties to minority shareholders.  Knowing when controlling shareholder owes fiduciary duties is one thing,...more

Allen Matkins

Does Personal Animosity Vitiate The Business Judgment Rule?

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Under the business judgment rule, "a director is not liable for a mistaken business judgment which is made in good faith and in what he or she believes to be in the best interest of the corporation, where no conflict of...more

Allen Matkins

Court Holds Internal Affairs Doctrine Typically Covers Breach Of Fiduciary Claims Despite No Averment Of Fiduciary Duty

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California's Revised Uniform Limited Liability Company Act provides "The law of the state . . . under which a foreign limited liability company is formed governs all of the following: The organization of the limited liability...more

Patton Sullivan Brodehl LLP

LLC Member Acting for LLC Without Authority Is Not “Protected Activity” Under California’s Anti-SLAPP Statute

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California’s anti-SLAPP statute (Code of Civil Procedure section 425.16) aims to protect defendants from meritless lawsuits designed to chill “protected activity” — i.e., the exercise of rights of petition (litigation) or...more

Proskauer - Employee Benefits & Executive...

California District Court Denies Motion to Dismiss 401(k) Excessive Fee and Underperformance Claims

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A California district court recently denied a motion to dismiss claims that the fiduciaries of a 401(k) plan breached their ERISA fiduciary duties of prudence and loyalty by selecting underperforming, high-cost investments...more

Allen Matkins

California's Narrow Codification Of The Internal Affairs Doctrine

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It is sometimes said that California Corporations Code section 2116 "codifies" the internal affairs doctrine.  See, e.g.,  Drulias v. 1st Century Bancshares, Inc., 30 Cal. App. 5th 696, 705, 241 Cal. Rptr. 3d 843, 851...more

Downey Brand LLP

Litigation is Taking California’s Public Trust Doctrine From the Waterfront to the Forefront

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California courts have long recognized the state’s duty to protect its tidelands, navigable waterways, and submerged lands (i.e., the land below the high tideline) under the common law public trust doctrine. However,...more

Allen Matkins

Court of Appeal Applies Caremark/Marchand To Directors of a California Corporation But The Result May Surprise You

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Over the years, I have commented on the fact that the California Court of Appeal has yet to apply In re Caremark International Inc., 698 A.2d 959 (Del. Ch. 1996) to the directors of a California corporation. Last Friday,...more

Stradling Yocca Carlson & Rauth

California Business Divorce: Corporate Opportunity Usurpation and Best Practices to Avoid it in Your California LLC

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Going into business with someone requires a high level of trust. For a business to thrive, business partners must be loyal to the business and each other. As in a marriage, when a partner in a business is disloyal, things...more

Patton Sullivan Brodehl LLP

Quasi-Judicial Immunity for Court-Appointed Partition Brokers

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In California, several classes of persons are entitled to some form of immunity protecting them from liability for activities performed in connection with judicial proceedings. For example, “judicial immunity” bars civil...more

Patton Sullivan Brodehl LLP

LLC and Partnership Authority “Safe Harbors”

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California’s statutes governing LLCs and general partnerships include “safe harbor” provisions making it easier for third parties to rely on the apparent authority of an LLC’s manager or a partnership’s partner. The statutes...more

Patton Sullivan Brodehl LLP

Diversion of LLC Funds Is Not “Protected Activity” Under California’s Anti-SLAPP Statute

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California’s anti-SLAPP statute (Code of Civil Procedure section 425.16) aims to protect defendants from meritless lawsuits designed to chill “protected activity” — i.e., the exercise of rights of petition or free speech on...more

Sheppard Mullin Richter & Hampton LLP

California Court of Appeal Holds that a Corporation’s Direct Cause of Action for Breach of Fiduciary Duty is Legal Rather than...

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In ZF Micro Solutions, Inc. v. TAT Capital Partners, Ltd., 2022 WL 4090879 (Cal. App. Aug. 8, 2022), the Fourth Appellate District of the California Court of Appeal decided, as a matter of first impression, that a...more

Allen Matkins

A First Sighting Of Zuckerberg Decision In California

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Last year, the Delaware Supreme Court adopted a tripartite test for assessing demand futility allegations in derivative actions. United Food & Commercial Workers Union v. Zuckerberg 262 A.3d 1034 (Del. 2021). Under this...more

Sheppard Mullin Richter & Hampton LLP

Less is More: Brevity is the Soul of Wit

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Last month, a three-judge panel in the Ninth Circuit reversed the Northern District of California’s ruling in Wit v. United Behavioral Health. In Wit, the district court ruled that United Behavioral Health (“UBH”) breached...more

ArentFox Schiff

Class Actions Quarterly Update: Labor and Employment

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Garner v. Inter-State Oil Co., 52 Cal.App.5th 619, Cal. App. 3 Dist., June 26, 2020, as modified (Jul 23, 2020) - Plaintiff filed a class action alleging that his employer, Inter-State Oil Co., violated a variety of wage...more

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