Notable verdicts and settlements

Reversing in part, the panel held that the discovery sanctions under Cal. Civ. Proc. Code § 2023.030 were dischargeable because, under the plain test of 11 U.S.C. § 523(a)(7) , they were not payable to and for the benefit of a governmental unit and were [**2] compensation for actual pecuniary losses. The panel found inapplicable the holding of Kelly v. Robinson. 479 U.S. 36, 107 S. Ct. 353, 93 L. Ed. 2d 216 (1986) , that the dischargeability of a debt turns on the purpose of a restitution award rather than the ultimate recipient of the funds.

Mackovski did not have to show prejudice when he was denied a jury trial. Furthermore:

"The trial court’s order imposing sanctions under section 128.5 was based “primarily” on the court’s finding, “after conducting the court trial,” that the action was frivolous and that the plaintiffs and their attorney prosecuted it in bad faith. Because the court should not have conducted the trial it did, its findings must be vacated and cannot be the basis of a sanctions order under section 128.5. Therefore, the order imposing sanctions is vacated."

" The purpose of the modification rules is to avoid a foreclosure despite the borrower being incapable of complying with the terms of the original loan. It would be contradictory to require the borrower to tender the amount due on the original loan in such circumstances. Moreover, the purpose of the tender rule is to dismiss suits at an early stage, where, despite any irregularities in the lender's foreclosure activities, the borrower will ultimately have to pay the amount due on the loan, but cannot do so. Such suits are essentially futile. This is not such a case, as a loan modification is an alternative to foreclosure that does not require the borrower to pay pursuant to the terms of the original loan. Accordingly, the tender rule does not apply, and plaintiff may proceed with his UCL claim."

"Womack's complaint effectively told both the court and Aztec—twice—that the issue of Aztec's licensure was not controverted for purposes of section 7031, subdivision (d). Under the doctrine of judicial admission, that removed the issue from the set of controverted issues. And if the issue of licensure was not controverted, then, under the plain language of section 7031, subdivision (d), there was no need on Aztec's part to present a verified certificate from the License Board as part of its case."

"Bank of America argues that recent legislation (known as the “California Homeowner Bill of Rights”) that prohibits the practice of “dual tracking” was not effective in 2011 and is not to be applied retroactively. Lueras argues the California Homeowner Bill of Rights demonstrates that Bank of America's conduct, though not unlawful at the time, “was unfair and/or fraudulent.” We do not address either argument because Lueras alleged that Bank of America engaged in conduct that amounted to fraudulent practices, independent of the California Homeowner Bill of Rights."

"Galope adequately alleged that she would not have purchased her loan had she known that the Defendants were manipulating the LIBOR rate. Article III standing exists when a plaintiff purchases a product she would not have otherwise purchased but for the alleged misconduct of the defendant. Hinojos v. Kohl's Corp., 718 F.3d 1098, 1104 n.3 (9th Cir. 2013) (citing Mazza v. Am. Honda Motor Co., 666 F.3d 581, 595 (9th Cir. 2012)) Maya v. Centex Corp., 658 F.3d 1060, 1069 (9th Cir. 2011). Contrary to the dissent's assertion, Galope's standing does not turn on whether she actually made interest payments that were adjusted in response to the allegedly manipulated LIBOR rate. Galope's cognizable injury occurred when she purchased the loan, not upon payment of LIBOR-affected interest. Maya, 658 F.3d at 1069."

"We reverse the district court's grant of summary judgment with respect to Mackovski's Fourth Amendment claim stemming from the July 14 arrest. The arrest warrant was supported by probable cause, but a reasonable jury could find that Officer Bex used excessive force under the circumstances."

"Because the mortgagors' proposed negligence claim would not have been futile, we reverse and remand for the district court to evaluate, consistently with this memorandum, the mortgagors' request for leave to add a negligence claim."