Recent Successes
Payne & Fears LLP Wins Appeal in Corporate Governance Case
In September, 2007, the congregation of a historic Angleno Heights church retained Payne & Fears LLP as appellate counsel after suffering a complete defeat in the Los Angeles Superior Court. The church, which is a California nonprofit corporation, had been affiliated for many years with a "cooperative fellowship" of Pentecostal churches. The officers of this larger association used the affiliation as a pretext to seize control of the corporation, occupy its property (valued at over $14 million), and literally lock the congregation out of its own church. After a three day bench trial, the lower court entered judgment against the church in a written decision holding that religious corporations lose all rights when they affiliate with a large association. Payne & Fears LLP substituted in as counsel and appealed, arguing that California law expressly protects the rights of religious corporations notwithstanding spiritual affiliations. The California Court of Appeal, Second Appellate District, agreed with Payne & Fears LLP on all points, reversed the judgment in full, ordered a trial on two claims, and directed the Superior Court to enter judgment for the client on all remaining claims. The published decision is entitled Iglesia Evangelica Latina, Inc. v. Southern Pacific Latin American Dist. of the Assemblies of God, 173 Cal. App. 4th 420, 93 Cal. Rptr. 3d 75 (2009). Eric C. Sohlgren and Daniel F. Lula handled the appeal.
Practice Area: Appellate Law
Eric C. Sohlgren, Daniel F. Lula
Payne & Fears LLP Wins Complete Defense for Boeing ERISA Plan
Payne & Fears LLP represented a Boeing ERISA health plan which had been sued by a provider for the plan’s alleged wrongful denial of coverage due to a determination that the medical care being provided was excluded under the plan as an investigational treatment. Upon Payne & Fears LLP’s motion for summary judgment, the court held that the plan’s decision to deny coverage was only subject to abuse of discretion review under ERISA, and that under that review the plan’s decision to deny coverage was reasonable based on its investigation of the claims and its interpretation of the plan documents. Accordingly, having found there to be no abuse of discretion, all claims against the plan were dismissed with prejudice. Eric C. Sohlgren and Vonn R. Christenson handled the defense of this case.
Practice Area: ERISA Litigation
Eric Sohlgren, Vonn R. Christenson
Payne & Fears LLP Wins Jury Trial in Race Discrimination Lawsuit
Payne & Fears LLP obtained a defense verdict for a manufacturing client on claims for racial discrimination, racial harassment and retaliation in a jury trial in San Bernardino County Superior Court. The plaintiff was a 19-year employee whose employment was terminated for two safety violations in a short period of time. He alleged that his safety violations were fabricated by his Supervisor in order to arrange his termination, motivated by the Supervisor's bias against him on the basis of his race (African-American) and age (over 65). He also accused his Supervisor of repeatedly harassing him on the basis of his race and age, using racial epithets and accused his employer of terminating him in retaliation for complaints about the Supervisor's alleged harassment. After a two-week trial, the jury returned defense verdicts on all of the plaintiff's race-based claims, for discrimination, harassment and retaliation. While the jury was deliberating on the plaintiff's age claims, plaintiff accepted a cost waiver in exchange for abandoning his remaining claims for discrimination and harassment on the basis of his age. James L. Payne and James R. Moss tried the case, with assistance from Laura Fleming.
Practice Area: Labor and Employment Litigation
James L. Payne, James R. Moss
Payne & Fears LLP Wins Appeal for Online Dating Service (Surrey v. True Beginnings LLC, 168 Cal.App.4th 414 (2008))
Payne & Fears LLP’s client, a Texas-based online dating service, prevailed at the trial court and in a subsequent appeal in a dispute involving accusations of violations of California’s Unruh Civil Rights Act and Unfair Competition Law. The complaint alleged that the dating service had violated these laws by offering more favorable subscription terms to women than to men. Daniel L. Rasmussen and Julie J. Bisceglia handled the defense of the case and the appeal.
Practice Area: Business Litigation
Daniel Rasmussen, Julie Bisceglia
Payne & Fears LLP Wins Bench Trial Involving Fraudulent Transfer of Real Property
After Payne & Fears LLP litigation attorneys obtained a substantial judgment for a client and during a subsequent appeal, the opposing parties attempted to fraudulently convey the real property which was the subject of the litigation in order to avoid paying the judgment. Payne & Fears filed a creditor's claim to secure the judgment and to set aside the fraudulent conveyance. Following a bench trial, the judge found for Payne & Fears’ clients on all counts, and ordered the attempted transfer set aside and the property sold to satisfy the judgment in favor of its clients, which will soon total over $1.2 million dollars. Daniel M. Livingston represented the victorious clients in the jury trial, the appeal and the later bench trial.
Practice Area: Real Estate & Business
Daniel Livingston
Payne & Fears LLP Recovers Substantial Insurance Benefits for Hospital in Business Dispute
Payne & Fears LLP recently wrapped up the final piece of a multi-million dollar insurance recovery for its client, one of Los Angeles’s largest nonprofit hospitals. The hospital had received no assistance from its liability insurers in defending claims by a disaffected doctors’ group for allegedly breaching the parties’ contract and engaging in a series of business torts. The firm's attorneys formulated and executed an insurance strategy that, following three lawsuits, enabled the hospital to recover several multiples of its out-of-pocket defense costs and settlement payment. The prosecution involved recoveries under a wide assortment of policies, including hospital comprehensive liability, commercial general liability, directors and officers liability, and managed care errors and omissions policies.
Practice Area: Health Care
C. Darryl Cordero
Victory in Age Discrimination Arbitration
Payne & Fears LLP obtained a complete defense victory for its client, a major local manufacturer, in an employment discrimination case. Plaintiff alleged that Payne & Fears' client discriminated against the plaintiff based upon his age, retaliated against him for making internal complaints, breached an employment contract, wrongfully terminated the plaintiff, and wrongfully withheld several hundred thousand dollars of salary and stock options. After a five-day arbitration, Payne & Fears LLP obtained an award in the employer's favor on all claims. Jeffrey K. Brown and Katherine L. Pearson handled the defense of the case.
Practice Area: Labor & Employment Litigation
Jeffrey Brown, Katherine Pearson
Payne & Fears LLP Wins Appeal in Unruh Civil Rights Act Suit (Cohn v. Corinthian Colleges, 169 Cal.App.4th 523 (2008))
Payne & Fears was retained by Corinthian Colleges to defend claims that the company’s sponsorship of a promotional giveaway of tote bags on Mother’s Day at Angel Stadium of Anaheim violated California’s Unruh Civil Rights Act. Plaintiff’s claims were dismissed pursuant to a motion for summary judgment, which was later affirmed on appeal. Daniel L. Rasmussen and Julie J. Bisceglia handled the defense of the case and the appeal.
Practice Area: Business Litigation
Daniel Rasmussen, Julie Bisceglia
Published Ninth Circuit Victory in Antitrust and Lanham Act Case (Fisher Tool Co., Inc. v. Gillet Outillage, 530 F.3d 1063 (9th Cir. 2008))
Payne & Fears LLP won summary judgment for its client, a New Jersey intellectual property law firm, in an action brought by a California tool distributor and its Taiwanese supplier. The complaint alleged that the client violated federal antitrust law, the Lanham Act, and state law when it brought a prior suit against the distributor and suppliant for patent infringement, and sought millions in damages. In 2005, Payne & Fears brought a successful motion for partial summary judgment on litigation privilege grounds, which eliminated six of nine claims. After discovery, Payne & Fears LLP persuaded the federal court that the underlying patent case was supported by probable cause and protected the Noerr-Pennington doctrine, resulting in the dismissal of the three remaining claims against the client. The result was affirmed by the Ninth Circuit Court of Appeals. Daniel L. Rasmussen and Daniel F. Lula handled the defense of the case and the appeal.
Practice Area: Business Litigation
Daniel Rasmussen, Daniel Lula
Payne & Fears LLP Homebuilder Client Wins Appeal (Greystone Homes, Inc. v. Midtec, Inc., 168 Cal.App.4th 1194 (2008))
Payne & Fears LLP attorneys represented Greystone Homes in an appeal of a judgment against a product manufacturer. In a case of first impression, the court ruled in Greystone Homes, Inc. v. Midtec, Inc., et al. that a homebuilder may pursue claims for equitable indemnity against individual product manufacturers for purely economic losses where the losses would be recoverable by a homeowner under the Right to Repair Act. Greystone was represented on the appeal by Thomas L. Vincent and Erik M. Andersen.
Practice Area: Construction
Thomas L. Vincent, Erik M. Andersen
Payne & Fears LLP Obtains 2.6 Million Dollar Judgment for Client (KS&A v. Zebec)
Payne & Fears LLP litigators won a 2.6 million dollar jury verdict after a month-long trial on behalf of a corporation alleging breach of a $135,000 marketing agreement. Payne & Fears LLP filed the breach of independent contractor agreement and fraud complaint on behalf of independent contractors, KS&A, after the defendant refused to pay them for over a year’s worth of work. The firm's attorneys persuaded the jury to award punitive damages which significantly increased the award.
Practice Area: Business Litigation
Charles M. Louderback
Payne & Fears LLP Hospital Clients Obtain Major Victory Over Health Plan
Payne & Fears has LLP obtained a major reimbursement victory for its clients, a group of nonprofit hospitals, against Blue Shield of California, a major health plan. For years Blue Shield had denied reimbursement to the hospitals under the parties’ contracts by “disallowing” certain hospital charges. The Los Angeles Superior Court recently ruled that, because Blue Shield violated Health & Safety Code section 1371 in disallowing the charges, it did not have the right to contest payment and is legally obligated to pay the charges with statutory interest, notwithstanding any contractual defenses.
Practice Area: Health Care
C. Darryl Cordero
Payne & Fears LLP Wins Appeal for Orange County Property Owners
Payne & Fears LLP attorneys successfully defended against a challenge to a jury verdict in favor of its clients, two Laguna Beach property owners. Following a three-week trial, an Orange County jury found that the property owners did not withhold material information from the plaintiffs in connection with the sale of a multimillion dollar property. The jury also found that the plaintiffs were fully aware of the condition of the property and gave the sellers a full and complete release of all claims. On appeal, the plaintiffs argued that the trial court improperly submitted the question of the release to the jury and that insufficient evidence existed to support the jury's verdict. The Court of Appeal, Fourth Appellate District, rejected these arguments in full and affirmed the jury verdict and trial court's judgment. Adding to the victory, Payne & Fears LLP succeeded in obtaining a substantial attorneys' fees award for its clients encompassing defense costs incurred in the trial court and on appeal. Daniel M. Livingston handled the jury trial and appeal; Daniel F. Lula assisted on the appeal.
Practice Area: Real Estate , Business Litigation
Daniel M. Livingston, Daniel F. Lula
Published Ninth Circuit Victory for Employer in Discrimination Suit
In January 2006, Payne & Fears LLP obtained a complete dismissal of a discrimination suit brought against its client, a local hospital, in U.S. District Court for the Central District of California. The plaintiff, a surgeon formerly under contract with the hospital, claimed race, disability and sexual orientation discrimination by the hospital and other entity and individual defendants. After the dismissal of his case in District Court, the plaintiff filed an appeal with the Ninth Circuit. On appeal, Payne & Fears LLP argued that (1) the plaintiff failed to allege sufficient facts to establish a "severe and pervasive" hostile work environment for purposes of Section 1981; (2) the plaintiff's claims for workplace discrimination were insufficient to state a claim under sections 51 and 51.5; and (3) the plaintiff's claims under the FEHA were barred by the statute of limitations. The Ninth Circuit agreed with Payne & Fears LLP on all three issues and upheld the dismissal of plaintiff's lawsuit. James L. Payne and Laura Fleming handled the defense of this case.
Practice Area: Labor and Employment Litigation
James L. Payne, Laura Fleming
Victory for Payne & Fears LLP Client in Hostile Work Environment Suit
Payne & Fears LLP represented an employer headquartered in Seattle in an action pending in the United States District Court, Northern District of California, San Jose Division. The plaintiff, a male, alleged that he was constructively discharged and sexually harassed by a female who was the head of Human Resources. Payne & Fears LLP prepared a motion for summary judgment which showed a substantial amount of evidence regarding plaintiff’s poor work performance to establish a lack of pretext for terminating plaintiff. The court granted summary judgment in its entirety except for the sexual harassment claims. The case then settled for a fraction of plaintiff’s original demand.
Practice Area: Labor and Employment Litigation
Charles M. Louderback
Victory for Payne & Fears LLP Client in Purported Whistleblower Suit
Payne & Fears LLP obtained summary judgment on behalf of its client, a major aerospace manufacturer, with regard to a purported whistleblower suit brought in Orange County Superior Court and removed to the U.S. District Court for the Central District of California. The plaintiff, a former employee and registered nurse, claimed that she had been terminated in retaliation for her complaints about other employees who allegedly failed to appear for their scheduled health exams according to company policy. Payne & Fears LLP obtained summary judgment based upon the plaintiff's admissions at deposition, along with declarations from key witnesses, which established that the plaintiff had not engaged in any legally protected activity prior to her termination, and that the plaintiff had no evidence to support her claim that the company's stated reason for her termination was pretext for retaliation. Daniel F. Fears, Laura Fleming and Laura B. Chaimowitz handled the defense of this case.
Practice Area: Labor and Employment Litigation
Daniel F. Fears, Laura Fleming, Laura B. Chaimowitz
Victory for Payne & Fears LLP Client in Disability Discrimination Suit
Payne & Fears LLP obtained summary judgment on behalf of its client, a major Southern California theme park, with regard to a disability discrimination/retaliation suit brought in Orange County Superior Court and removed to U.S. District Court for the Central District of California. The plaintiff, a former employee, alleged that she had been wrongfully demoted when she was not offered an identical secretarial position upon her return from an extended leave of absence. Payne & Fears LLP obtained summary judgment based upon the plaintiff's admissions at deposition, which established that the plaintiff was not disabled at the time of the alleged wrongful demotion; that she never notified her employer of any need for accommodation; and that she had not engaged in any legally-protected activity at the time she was cleared to return to work. Daniel F. Fears and Laura Fleming handled the defense of the case.
Practice Area: Labor and Employment Litigation
Daniel Fears, Laura Fleming
Victory in Wage & Hour Class Action
Payne & Fears LLP obtained summary judgment on behalf of its client, a major national manufacturer, in a wage-and-hour class action in which the plaintiffs alleged that the defendant had failed to provide its union-represented employees with meal periods required under state law. Payne & Fears LLP removed the action (which had been filed in California Superior Court) to the United States District Court for the Northern District of California based on the argument that plaintiffs' claims were preempted by the Labor Management Relations Act. Payne & Fears LLP then successfully resisted the plaintiffs' motion to remand by demonstrating that the putative class members had agreed, through the applicable collective bargaining agreement, to take "on-duty" meal periods, and that the relevant contract terms required interpretation that could only be performed under the Labor Management Relations Act. The court then granted Payne & Fears' motion for summary judgment and dismissed the case. James L. Payne, Jeffrey K. Brown and James R. Moss handled the defense of the case.
Practice Area: Labor and Employment Litigation, Wage & Hour Litigation & Class Action Defense
James L. Payne, Jeffrey K. Brown, James R. Moss
Jury Verdict in Significant Sex Discrimination Case
Following an eight-week jury trial of a high-stakes glass ceiling sex discrimination case, the jury returned a complete defense verdict in favor of Payne & Fears LLP’s client, Toshiba America Information Systems, Inc. ("TAIS"). The plaintiff, a former national sales vice president, alleged that TAIS, a maker of sophisticated laptop computers, failed to promote her to the highest executive levels of the company due to her sex. In addition, the plaintiff pointed to an alleged under-representation of women at the top executive level as evidence of a general atmosphere of discrimination. At trial, Payne & Fears LLP litigators demonstrated that various promotional decisions and reorganizations surrounding the plaintiff were necessary adaptations to a volatile technology industry. Payne & Fears LLP also established that TAIS, in the face of a declining workforce, had made good faith efforts to increase representation of women in upper management. James L. Payne and Laura Fleming handled the jury trial.
Practice Area: Labor and Employment Litigation
James L. Payne, Laura Fleming