Northern District of California Judges rule in Property cases

HT: Podiobooker

Northern District of California judges have recently released rulings in three real property actions.

In Barrous v. BP PLC, Mrs. Barrous and her son are suing the petroleum company for operating a gas station which contaminated their neighboring restaurant in San Jose.  The Barrouses bring a number of claims including waste, breach of contract, and diminution of value.  Judge Lucy Koh explained that, waste is "conduct (including in this word both acts of commission and of omission) on the part of the person in possession of land which is actionable at the behest of, and for protection of the reasonable expectations of, another owner of an interest in the same land." Here, BP had a license to use Mrs. Barrous' land, but that was an insufficient interest to plead waste.  Judge Koh dismissed the waste claims with leave to amend.

Schulken v. Washington Mutual Bank involves a putative class action where the borrower claims Chase Bank terminated his home equity line of credit (HELOC) in violation of the Truth in Lending Act (TILA).  Under TILA, a HELOC can be reduced if there is a material change in circumstances, Judge Lucy Koh explained:

First, there must be a ‘material change’ in the consumer’s financial circumstances, such as a significant decrease in the consumer’s income. Second, as a result of this change, the creditor must have a reasonable belief that the consumer will be unable to fulfill the payment obligations of the plan.

Here, Chase claims that it requested income verification information from the plaintiff which it never received causing it to suspend the HELOC.  Judge Koh noted that failure to provide income verification does not doom the claim because that is not an enumerated exception to the HELOC suspension requirements in TILA or its enabling regulations.  She denied the motion to dismiss.

Wuerfel v. Lathrum is a dispute where the plaintiff argues that a number of people from Arizona damaged his land.  Mr. Wuerfel, an attorney proceeding pro se, sued the defendants in Mendocino County Superior Court for damages, but never served them because he was still investigating his claims and plans to amend his complaint.  The defendants found out about the suit anyway, removed it to federal court and moved to dismiss.  Now, Mr. Wuerfel has stated that he plans to amend his complaint to add California based defendants, defeating diversity of citizenship, and requiring remand back to the Superior Court.  Judge Nandor J. Vardas stated that after he receives  the new complaint he will consider remanding it.  He denied the motion without prejudice.

In Taylor v. Ron's Liquors, the plaintiff claims that she went into the defendant's bar where was invited into an upper room where she was attacked by one of the establishment's employees, Thomas Pollacci, who is a known sex offender.  She is suing Ron's Liquors and its corporate officers for negligent hiring and simple negligence.  Judge Susan Illston dismissed the negligent hiring claim against the corporate officers and directors stating that only the hiring establishment was liable.  Ms. Taylor cited Morris v. Thogmartin (Cal. App. 1973) for the proposition that "the owner of a place of business open to the public has a duty to exercise reasonable care to protect business invitees against danger from the conduct of third persons on the premises"  Judge Illston agreed and allowed the simple negligence claim against the corporate officers to go into discovery under the theory that they failed to adequately screen and supervise Mr. Pollacci. Judge Illston granted in part and denied in part the motion to dismiss.